Health Care Co-Ops
Yesterday, Kent Conrad floated the idea that instead of having a robust public option in health care “exchanges,” we could instead implement rules designed to spur the creation of non-profit “co-ops” that would provide an alternative to private companies without government control. Or, of course, government’s ability to piggyback on Medicare and achieve cost controls. I’ll recommend Igor Volsky’s analysis of the problems facing health co-ops that legislation would have to overcome.
I’ll say that I think this is a pretty good idea, but it stands on its own merits completely apart from the merits of a public plan. In other words, there’s no reason we shouldn’t have co-ops and private plans and a real public plan. Medicine has always been a mix of state, non-profit, and for-profit actors and I think it’s worth broadening the mix of insurance options available to ordinary people.
That said, as an alternative to a public plan this simply doesn’t meet what I see as the main objective of a public plan. But beyond this, I think the larger issue is that you sort of can’t “compromise” around the core political issues here. Insurance companies object to the idea of a public plan because they don’t want to lose business. Anything you dream up that would cause insurance companies to lose business, they’ll object to. After all, what else are they going to do? But anything you dream up that doesn’t cause insurance companies to lose any business isn’t going to accomplish anything meaningful. Insofar as what’s really going on in the halls of congress is that members are trying to balance progressive pressure for a public plan with industry opposition to it, you’re going to keep banging your head against the reality that you can’t split the difference between “incumbents face a new strong competitor” and “incumbents don’t face a new strong competitor.” And incumbents really don’t want to face a new strong competitor—incumbents hate competitors!
17 Responses to “Health Care Co-Ops”
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June 10th, 2009 at 4:12 pm
I would still suggest to everyone in this debate that it’s wrong — when we are seeing this poll in the 50’s and 60’s — to exclude single payer healthcare in this discussion. If you want to have a real debate on healthcare, let’s discuss the most fiscally conservative option that does the most to control costs first, and if we can’t get that due to political pressure from the big insurers, then let’s bargain down from that. Otherwise, we’re all stuck in the frame that private insurers are sacrosanct. Why are they sacrosanct? I’ve seen no policy data to convince me of that, and the rest of the developed world has them basically at the fringes or are very small businesses.
June 10th, 2009 at 4:16 pm
That is a flawed argument. It is true insurance companies don’t want to lose any business, but they would also prefer to lose less business over more business. So, to the extent how much of their business would be diverted depends on the exact nature of the public plan, there is still room for “compromise” in the sense that insurance companies would prefer a public plan that diverted less business.
Or, in other words, the “strong” in “new strong competitor” is a variable, and thus subject to political wrangling.
June 10th, 2009 at 4:24 pm
But anything you dream up that doesn’t cause insurance companies to lose any business isn’t going to accomplish anything meaningful.
False. But it doesn’t surprise me that Matt would say something so blatantly false, something which just ignores clear examples which are in contrast with his assertion, since every single time he talks about the public option he completely ignores the valid criticisms of it and focuses on the ridiculous ones. He’s been playing this straw man game for a while now.
June 10th, 2009 at 4:41 pm
Co-ops would be disadvantaged by start up costs, which includes capital reserves. If they’re hiring a TPA, that’s usually one of the for-profit insurers. What’s the likelihood of them getting good bids from their competition?
This isn’t close to equal footing. Kent Conrad is dirty….
June 10th, 2009 at 4:43 pm
It helps Kent Conrad deliver for his for-profit health care supporters.
http://stateofthedivision.blogspot.com/2009/04/key-senators-to-imprint-health-care.html
The government exists to provide important services the private sector can’t or won’t. For-profit insurers left 50 million people out of the loop.
Baucus and Conrad are tainted. They show their allegiance.
June 10th, 2009 at 5:18 pm
I’m open to anything on one condition: somebody has to insure me. And yes, I already can get insurance through specialty insurers that handle NFL stars, but that’s really expensive. Like “more than I make” expensive. Quite frankly, I really don’t care about this issue if I’m to be left out. And if I will be left out, then don’t do anything. I currently have the option of flying to Thailand for medical care. Just don’t take that away, it’s all I have. This whole health care push really worries me. I’d like to think that it can’t get worse, but it always can. And I’m exactly the kind of person everyone wants to leave out of their plan. If someone is going to get screwed, it will surely be me. I already pay 100% of my health care costs, just don’t make it any higher than that. I don’t want to pay insurance premiums and still have to pay 100%. That is what seems to be happening. I just can’t trust the government on this. Yes, they are much better than private insurers. But the Dems will cave and let the Reps ensure that I don’t get health care. Until the Dems grow a spine, doing nothing is the best for me.
June 10th, 2009 at 5:18 pm
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June 10th, 2009 at 5:52 pm
Oh I don’t know.
I bet that ObaFuhrer will put his feet up on his desk and get tough with those eeeevil insurance guys just like he does to the Israelis!
June 10th, 2009 at 6:06 pm
Seems that a not-for-profit would be vulnerable to individual state laws limiting its access to the market under fresh regulations meant to shelter insurance companies. To effectively block this state-level favoritism, the non-profits would need to rely on federal fairness laws.
So, essentially, the non-profits would very possibly need federal protections to counteract state-level lobbying in many areas. If this were achieved, then the non-profits would essentially be favored by the federal government. And so if the ventures are successful, why not use federal money to guarantee the plan? And if we can assume this outcome with reasonable certainty, why not bypass the expense of transitioning non-profits to government-guaranteed and government-protected non-profit health agencies?
June 10th, 2009 at 9:19 pm
The Mayo Clinic is non-profit.
June 10th, 2009 at 11:21 pm
40% of those covered by private insurance are covered by a non-profit organisation. BCBS, Kaiser Permenete, etc. are all non-profit. In addition to the insurance commpanies, 60% of the hospitals in the US are also non-profit.
June 11th, 2009 at 3:03 am
Regional co-ops are already fully legal. Kaiser-Permanente is exactly that. Group Health is too, but in a smaller “region”. There are dozens of others.
The problem is that they are not really co-ops. They aren’t run by their enrollees, and they don’t distribute profits to their members. Instead, they distribute profits to their executives.
And don’t think they don’t make profits. They do; they just can’t keep them as “retained earnings” or shareholders’ equity. So they build new facilities — which they can keep — and distribute the rest as “bonuses” to their executives.
June 11th, 2009 at 7:44 am
Can you name an insurance company that has stated that they would accept a “public plan” under any circumstances?
Your statement is the ultimate in stupidity. Faced with solid opposition to a public plan under any circumstances, you want to counter with a “public plan that diverted less business,” thinking that “there is still room for compromise.”
WTF?
June 11th, 2009 at 8:07 am
The “room for compromise”, and the deal we see, will involve an individual mandate with tax credits to help the needy and businesses purchase coverage.
Basically a nationwide Massachusetts plan.
And because ObaFuhrer has already fenced health care “reform” off from pay go there is no necessity to raise taxes before the 2010 elections.
After all, he claims most costs will be financed by his metric free and largely unspecified “economies” eventually wrung from the system.
It will pay for itself!
Just another ObaMiracle!
Or a pig in a poke…
June 11th, 2009 at 7:01 pm
Anan – “Instead, they distribute profits to their executives. ”
Really, who do you think gets the most lavish benefits in California – the executives of the University of California System or the executives at Kaiser? I’m willing to be it’s about even.
June 11th, 2009 at 9:07 pm
I can’t see how ‘public plan’ can co-exist with ‘private plan,’ but coops could co-exist with either. I know that Medicare presently coexists with private plans, but that is only that the government pays for services delivered by a vast array of hospitals and doctors and other professional caregivers. It pays for care, it does not provide care. And it pays way too much! (That’s what Obama means when he says, Health care costs are spiraling. Yes, we have a sick population–obese, diabetic, heart sick, attention deficit disordered, AID-ed, autistic, and std-ed– But by not paying for everybody, limiting the care, we can just barely afford Medicare (and Medicaid). This will gradually change as more boomers retire.
The fiscal reality comes home when one visits the hospitals in places where the government provides the care and covers virtually everybody, which is the only way it’s affordable. I lived in Mexico for four years and was covered by their very affordable national ’seguro social.’ This plan is not free, but it is cheap by their own standards. And let me tell you, it’s basic.You bring your own linens to the hospital. If you want stitches that dissolve, you must buy them outside and bring the package with you. There are no meals in hospitals. . Surgeries are lined up on gurnies factory-style. But you get care. I’m not confident that the American public would endure the conditions, however. And Mexico can barely afford it. And the US is not presently in a much better position.
But coops would serve well. They’re non-profit but their stock can grow in value, and are saleable under certain conditions. Thus they are private property, of a kind that pre-dates capitalism. The government could help in providing the start-up capital, to be re-paid. Coops are awesome. Have you heard about the Pittsburgh East End Food Coop? The Bay Area is full of coops. My bank in Pittsburgh is a coop. There’s a whole region of coops in Spain, called Mondragon.
There was a proposal by one group to have a worker buy-out of the big three auto companies, but it didn’t get off the ground. But this has promise. I wish I knew how to help. It ought to be clear from anyone with practical experience that profit-making and universal coverage just don’t compute. It won’t happen unless the government steps in and provides the profits for the poor, and honestly, we can’t afford it. Clinton’s whole show last go-round on this topic ought to have proved it. Unless that part is dealt with, one way or another health care is going to deteriorate, and not with reasonable discussion of economic triage (what will get cut, by whom, what will get care, with conditions spelled out–we couldn’t even do that with the stimulus money!)
I’ll tell you, with a government with elastic respect for life, such as this one, what will happen is — they will euthanize the elderly and the expensive. I wouldn’t trust either party, the government of any US party, with that responsibility, but most certainly never, not ever, one that not only supports but pushes abortion as a solution to personal problems. If we had public care, Octo-Mom would have been forced to abort some of her babies. You can count on it. The public outcry was so great, policy must have surely followed, had it been in the government’s power. And that’s not right. I don’t like her, but nobody should force anybody else to kill their offspring because they are ‘too expensive’ (that’s happening in China, and we’re now funding it, since the end of the Mexico City policy). Better to outlaw invitrio.
June 16th, 2009 at 12:30 am
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