What Is A Health Care Co-Op?

Tuesday, August 18th 2009, 4:36 pm
By: News On 6

By Dan Bewley and Terry Hood, The News On 6

UNDATED -- One plan starting to gain momentum is a health care cooperative.  The Obama administration is beginning to lean towards a co-op as the debate about health care reform continues.  So what is a health care co-op?

As President Obama tours the country touting health care reform, a new proposal is starting to creep into the conversation in form of health care cooperatives.  Supporters say co-ops give the public more control while still providing help to the more 46 million uninsured people in the country.

So how do co-ops work?

It starts with the members, those who buy a part of the business.  They elect the board of directors, who in turn, hires the management.  Advocates for cooperatives say the system is designed to give members a tighter grip on how the business is run.

"It would be consumer owned and controlled so the decisions would be made by the people who are using the services. So you would get a better type of service at a lower cost," said Paul Hazen with the National Cooperative Business Association.

Paul Hazen says there are three types of health care cooperatives:  a mutual insurance company, where the members own part of the business, an HMO, where the members hire the doctors and own the hospitals and a purchasing cooperative, where the members work together to buy insurance in volume at a cheaper price.

"The cooperative model is the perfect business model to let the consumers in this case make the decisions on the type of health care they want to achieve," said Paul Hazen with the National Cooperative Business Association.

There are several health care co-ops already running in the country, with Minnesota, Wisconsin, and Washington considered to have the top three.       

In Minnesota, HealthPartners has 36,000 health providers and 200 hospitals in its coverage area.  Wisconsin's plan is recognized for covering all farm-related accidents.  In Washington the co-op has more than 590,000 members and offers plans to Boeing and Seattle city employees.