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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep. Renee Montagne is back from Afghanistan. She's in our studios. Welcome back, Renee.

RENEE MONTAGNE, host:

Thanks, Steve. Glad to be back.

INSKEEP: And you've come back in the middle of a debate over health care.

MONTAGNE: Which was - you might be interested in knowing - loud enough that I could hear it halfway around the world. And you think they're fighting in Afghanistan.

(Soundbite of laughter)

INSKEEP: Well, they certainly are fighting in Washington. President Obama's administration wanted a public insurance plan to compete with private companies. But now, facing harsh criticism, some lawmakers are turning to an alternative, which we will discuss this morning. It's called a health insurance co-op.

MONTAGNE: And conservative broadcasters like Rush Limbaugh are denouncing that, as well. So, this morning, we'll ask what co-ops would actually offer. NPR's Joanne Silberner has that story.

JOANNE SILBERNER: Robert Laszewski once ran an insurance company. Now he's a consultant to health insurers and health care provider organizations. He says health cooperatives won't improve the nation's health care system.

Mr. ROBERT LASZEWSKI (Health Care and Insurance Consultant): I think they're the single dumbest idea I've heard in 20 years of being in Washington and working on health care policy. You know, there's this old story about the committee that gets together to design a horse and they end up having designed a camel. This is a camel if there ever was one.

SILBERNER: But nonprofit health co-ops have their fans, like Karen Davis, head of the nonpartisan Commonwealth Fund.

Ms. KAREN DAVIS (Director, Commonwealth Fund): Health co-ops are a good way to deliver care. It's running health care for the benefit of patients instead of the benefit of shareholders. We have good models in the U.S. of co-op health care. They've taken 50 or 60 years to really thrive, but they deliver top quality care at a reasonable cost.

SILBERNER: Maybe at this point, it would help to know what a health co-op actually is. Group Health Cooperative in Seattle is one of two co-ops that have been around for decades. It's just been rated the number one HMO in the nation by Consumer Reports Magazine. Pam MacEwan is the senior vice president at Group Health.

Ms. PAM MACEWAN (Senior Vice President, Group Health): We're a tax exempt nonprofit. And we are cooperatively governed, which means that the members, the patients actually elect the board of trustees, and each of our trustees receives care here.

SILBERNER: In some ways, Group Health acts like any other health insurance company.

Ms. MACEWAN: We have really different kinds of packages. You can have people buy an individual coverage for their family with a very high deductible that would look very much like any other insurance package.

SILBERNER: Or employers can purchase different types of insurance, just like they do from Aetna or Cigna. And two-thirds of Group Health's members opt for a system where members get their care from doctors who are on salary and who work at Group Health clinics and offices. The American Medical Association supports co-ops - at least in theory - as a way to get more people covered. And Democratic Senator Kent Conrad of North Dakota, who has pushed the co-op idea as part of health care overhaul, says that co-ops could thrive in a new system where insurers are encouraged to focus more on quality of care.

But consultant Robert Laszewski says there's no way a new insurance company is going to be able to do what a government option is supposed to do: provide enough competition to conventional insurers to force them to keep their prices down while delivering full services and quality care.

Mr. LASZEWSKI: The co-op with no information technology, no provider network, no existing market share to go to doctor to negotiate decent prices, that's a laugh. That's not going to scare any insurance executives. Trust me. They're just laughing at it.

SILBERNER: And even Karen Davis of the Commonwealth Fund, who likes co-ops, says the proponents are facing a big challenge.

Ms. DAVIS: These are going to be very difficult to establish. They're going to take time. And most importantly, they're going to need clout in the local marketplace to convince doctors and hospitals to be part of their system.

SILBERNER: She says that clout could come from a legislated guarantee that the co-op could pay the lowest fees to doctors and hospitals. Germany has had success with a national board that negotiates prices. But both those approaches are a level of government involvement that the proponents of co-ops have been trying to avoid. And would co-ops help control health costs? It depends on how they're structured. The price of insurance through Group Health and the other big co-op, Health Partners in Minneapolis, it's about average for their communities or just below.

Joanne Silberner, NPR News, Washington.

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