What Health Care Co-Ops Might Look Like
REBECCA ROBERTS, host:
In the midst of angry town halls and intense media attention, the White House appears to be showing flexibility in the contents of health care reform legislation.
Yesterday on CNN, Health and Human Services Secretary Kathleen Sebelius said the public option was not the essential element, and mentioned the possibility of member-owned health care cooperatives.
We don't know for sure if this marks a change in strategy for the administration, but what would a nonprofit co-op look like and why would you want them?
If you've ever been a member of the health cooperative or if you have questions about how this would work, give us a call. Our number is 800-989-8255. Our email address is firstname.lastname@example.org. You can also join the conversation on our Web site. Go to npr.org and click on TALK OF THE NATION.
Joining me here in Studio 3A is Noam Levey. He reports on national health care policy for the Los Angeles Times.
Welcome to TALK OF THE NATION.
Mr. NOAM LEVEY (Health Reporter, Los Angeles Times): Thanks.
ROBERTS: There are health co-ops already in the U.S. What do we know about how they work?
Mr. LEVEY: Well, there are a number of different kinds of health care co-ops that exist right now. And I should say that there used to be a lot more. Co-ops have a long history in this country of providing health insurance, as well as health services to customers. And, in fact, many of the insurance companies that we know today, the Blue Cross Blue Shield, started out as a form of cooperative in the sense they were called mutual insurance companies, where members pulled together to buy health services.
Today, there are not many left. There are a couple of really big - the bigger ones are in the Pacific Northwest and in Minnesota, where Group Health in the Puget Sound area and HealthPartners have about a half-million members, a bit more. They go back decades. And their members own the cooperative. They vote on the members and they own the insurance.
Now the interesting thing in both of those cases is that the co-ops actually also are the health care providers. So the co-ops employ the doctors, own the hospitals, own the clinics. So you have a sort of fully integrated system in which people get their health care.
There's a more simple kind of co-op that exists, for instance, in California, where you have something called the United Agricultural Benefit Trust, which is a group of farmers that banded together about 25 years ago to buy insurance in a more traditional kind of way. They hired some people who had expertise in insurance. And then this - after taking their premiums, they contract with providers, doctors, hospitals, et cetera, where their members can go get medical care.
ROBERTS: You said there used to be more. Why the decline?
Mr. LEVEY: Many different reasons. Some of them sort of transitioned into the bigger big blues that we know - now know. Others of them couldn't cover the cost of providing insurance. They didn't have enough back - they didn't have enough reserves to cover the costs of their medical care - a lot of problems with that in California over the past couple of decades. There were some cases where there was problems with the management. People ran off with the money or didn't keep enough, mismanaged it, et cetera.
ROBERTS: How do they compare with private insurance in terms of cost and wait time for doctors and seeing specialists, all those things that people shop around for health care on?
Mr. LEVEY: Well, the two models that I talked about in Minnesota and the Pacific Northwest actually have very good record viewed positively in health care circles in terms of the quality of care that they provide, as well as the costs. Although there's some debate about whether or not that's a function of the fact that they're cooperatives or the fact - or a function of the fact that they're integrated health systems.
Remember, I told you that they own the doctors and the hospitals and so forth. There's a lot of belief that that model of health care is more efficient and that may account as much for their success as does the cooperative arrangement.
ROBERTS: Let's hear from Eric in Madison, Wisconsin.
Eric, welcome to TALK OF THE NATION.
ERIC (Caller): Hi. Yeah, I'm currently insured by a health cooperative here in Madison. It's nonprofit. And it works great because my wife is employed by the university. We like a lot of the extended benefits that we get that aren't available in other things. However, we've recently, because of different circumstances, been looking at having to go with an individual insurance plan. And when we were looking at those prices, it's extremely unaffordable, just like everything else. And on top of that, if we moved from our group plan to an individual plan, there'd be a rider for all kinds of things that are covered currently…
ROBERTS: And Eric…
ERIC: …even though it's the same thing.
ROBERTS: Eric, would you recommend a co-op to someone else?
ERIC: Well, I think - I mean, if somebody at the university were to ask me: Who do you think I should get insured by of the options that they have? I would say go with this co-op, because they seem to do a great job for people who are employees. But, I mean, it's more expensive for the individual markets, so I don't really see how the co-op answers the cost issue.
ROBERTS: Eric, thanks for your call.
Let's hear from Mary in Minneapolis. Mary, welcome to TALK OF THE NATION.
MARY (Caller): Hello?
ROBERTS: Hi. You're on the air.
MARY: Yes. I have health care coverage by the touted good health member cooperative, HealthPartners, in Minnesota. And I, you know, I'm shocked. I've been shocked to hear that this is an example of a member-owned cooperative health care.
ROBERTS: Why are you shocked?
MARY: Well, yes, we can vote for some board members. We have nothing to say about whether or not our coverage - I have been denied coverage. The appeal process is perfunctory. It's essentially getting no's without any address to the issues stated in appeals that it has always seemed - and I've had this insurance for years - that it's all based more on money than on health care.
You know, when I heard that a couple of weeks ago that it was an example of a cooperative, laughed. And then when I heard that it was award-winning because people could ask for a board council if there is appeal, well, we're never told that. I have appealed and have asked what is the appeal process several times. That was never given me as an option.
ROBERTS: Mary, thanks for your call. So, Noam Levey, from our very scientific data pool here of two callers, it's not exactly a rousing endorsement from the people actually in them.
Mr. LEVEY: No. And in fact, as this debate progresses here, I suspect we'll be hearing - if we go down the route and we see a full-blown proposal to create this kind of co-ops, I think we'll see a debate about what the benefits and some of the drawbacks can be. There certainly are complaints from people about how responsive co-ops are, especially Group Health, which has, as I said I think about half a million members, maybe more.
The degree to which a co-op really responds to its members and to their complaints is a big test. And I'm sure it can be difficult if you have a very large - a large co-op. Critics of a co-op who are generally proponents of creating a government plan, would argue that a government plan could be more responsive because it is essentially owned very explicitly by the people.
On the other hand, I think one could argue, as well - you probably could find a lot of people who are critical of decisions that the government makes on health care, as well. So…
ROBERTS: You think? Let's hear from Mike in Muskegon. Mike, welcome to the program.
MIKE (Caller): Hi. My question concerns, in a general way, the role of the nonprofit sector in the financial - nonprofits in the financial sector. For example, in the banking side, credit unions came out looking pretty good in the wake of the banking scandals. They didn't get involved in the sorts of abuses that some of the for-profit side got involved in.
I'm just wondering if we could hope to see some of that on the health care side, if expanding the nonprofit involvement would cut down on some of the political and economic abuses, like lobbying excesses and just a concentration of power that we see in the financial sector.
ROBERTS: Mike, thanks for your call. Noam?
Mr. LEVEY: Well, certainly there are those who believe that some of the for-profit excesses in the health care sector could be controlled by further and tighter regulation by the federal government. Co-ops may be one piece of that. Although, you know, it should be noted that some of the largest health insurers in the country are nonprofit still, and can be - as are, still - there are still nonprofit providers as well out there.
So it's not necessarily, I think, a simple panacea for all the ails of the health care system. But clearly, there is, I think, a recognition by those pushing both co-ops and pushing more government plan that letting unfettered private interests control the health care sector hasn't necessarily been the best thing.
ROBERTS: One of the big proponents of co-ops in the Senate is Senator Kent Conrad. Is there something about representing a rural area that makes this a more appealing option?
Mr. LEVEY: Well, I think so. I mean, Senator Conrad's been very explicit, in fact, in saying that this is a model of economic organization that is familiar to us, being people from the Midwest. Where there are agricultural co-ops, people have banded together to sell their products. They've banded together to buy electricity.
They're a little less familiar to folks on the East Coast and the Northeast. In fact, I had a conversation not too long ago with a senator from Rhode Island, Sheldon Whitehouse, who said, you know, we have to look at this. Where I come from, we don't have co-ops. I don't exactly know how that would work. So there's probably going to be an education process that's going to have to go on for those aren't from places like North Dakota.
ROBERTS: Oh, that's why we have shows like this one. Let's hear from Doug in Fort Wayne, Indiana. Doug, welcome to the program.
DOUG (Caller): Good afternoon. Thank you for covering the topic. As a libertarian and a proponent of the free market, I'm glad we're covering the idea of reform. But one of the things that concerns me is whether it's an insurance company, the government or a co-op, whether you pull $200 out of my left pocket and call it a premium or $200 out of my right pocket and call it a tax, nothing is addressing the actual cost of health care, which is skyrocketing, which is the real problem. No one can afford to get a test or any sort of procedure of significant size without some sort of coverage that keeps going up.
Mr. LEVEY: Well, I mean, you've put your finger on possibly the biggest and most vexing problem confronting policymakers here. We talk a lot about coverage and how are we going to cover everybody, but I don't think anybody's figured out exactly how we're going to pay for all of the things that we want to have done.
Now, I would suggest that that discussion about controlling how much we pay for health care would demand more of a discussion about what we can and can't afford. And once you get into that discussion, you get into, I think, some pretty touchy territory in terms of when you actually say no. And actually, I would think from a libertarian's perspective that would be particularly interesting to sort of start making decisions about who can and can't have health care.
ROBERTS: You're listening to TALK OF THE NATION from NPR News.
Let's hear from Mary Kay in Augusta, Georgia. Mary Kay, welcome to TALK OF THE NATION.
MARY KAY (Caller): Hi. I wanted to say, at one point I was working six part-time jobs with no benefits in two states. I am very much in favor of a public option that you can carry with you anywhere in the nation. You know, I'm willing to pay my, you know, my premium for it, but I believe that that's very important. I have two brothers that work fulltime, neither one of them have insurance at all. And I have a friend who recently lost her job, purchased insurance in Pennsylvania, then her daughter got breast cancer in Florida and she can't use her insurance in Florida unless it's 60/40.
And there are many other people in this category who are working, who pay taxes, who are willing to pay premiums, but they need something that they can carry with them throughout the nation.
Mr. LEVEY: That's a problem we hear a lot, and it's something that, actually, insurance companies themselves have argued for more - what's called portability of health insurance. At the moment, health insurance is regulated at the state level, for the most part, around the country. And that's pleased a lot of consumer advocates because many states have put tougher restrictions and requirements on insurance companies, in places like California, for instance, or elsewhere.
But creating a system where you would have the same standard across state lines is a tricky business, and one that I think is still very much in discussion here.
ROBERTS: Politically, what do you think is actually going on with the strategy here? Do you think this is a real proposal that is likely to make it into a version of the legislation, at least on the Senate side?
Mr. LEVEY: The co-op proposal?
Mr. LEVEY: Oh, I think it is a very real proposal. I think - well, a couple of things. I mean, the government option, the government plan has sort of become a - almost a holy grail, I think, for some on the left who believe that without it, you cannot have meaningful health care reform.
Those advocates are most represented in the House of Representatives. So I think it's unlikely that the House, when it passes a health care bill, could pass something that doesn't have a government - a new government insurance program in it.
On the Senate side, there's never been as much enthusiasm for that, in part because Republicans wield much more influence, but also there are a lot of moderate Democrats who are pretty uncomfortable with creating a new government insurance program.
So they're searching for some alternative that would satisfy people who think that you can't just let insurance companies run the insurance market. There's a feeling that that's been what we've had, and it hasn't worked too well.
So how do you find an alternative? That co-op proposal's a real proposal. It's being discussed in the Senate Finance Committee, and there are discussions going on in town now with the administration, as well as senior Democrats on the Hill about how you lay the groundwork for emerging with a bill in two or three or four or five months that doesn't have a full-blown government plan.
ROBERTS: And if the alternative is co-ops in some form, how likely do you think it is to win bipartisan support?
Mr. LEVEY: Well, I wouldn't bet on a lot of bipartisan support at this point, frankly. I think if you listened to some of the rhetoric on both sides, but particularly on the Republican side, even from those who purport to be interested in bipartisanship - I point particularly to Senator Chuck Grassley, who's been working on this and has been extremely vocal in his criticism of major proponents - major components of the bill. I think at the end of the day, I'd be pretty surprised if there are many Republicans that vote for whatever emerges.
ROBERTS: So do you think there's another alternative to the public option that might be floated next week? I mean, is it…
(Soundbite of laughter)
Mr. LEVEY: Our proposal of the week, alternative of the week? Other than a co-op?
Mr. LEVEY: I don't know. I haven't heard of a specific proposal other than that, but there are different ways you might structure a combination of a co-op and a public option. You might, for instance, have triggers for creating a public option down the road - many different iterations.
ROBERTS: Noam Levey. He's joined us here in Studio 3A. He's national health care policy reporter for the Los Angeles Times. Thanks so much.
Mr. LEVEY: My pleasure.
ROBERTS: Tomorrow, we'll preview the new fall TV season. Linda Wertheimer will guest host. This is TALK OF THE NATION from NPR News. I'm Rebecca Roberts.
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