* Co-ops seen as part of possible healthcare reform
* Problems seen absorbing all 46 million uninsured
* Need time to grow to size sufficient to achieve clout
By Carey Gillam
MINNEAPOLIS, Minn, Aug 28 Bethany Whitehead is
aware of the contentious national debate about U.S. healthcare
reform, but the young Minnesotan has solved her own problems --
by joining a healthcare cooperative.
Last year, the 33-year-old art museum employee struggled to
pay $200 in monthly premiums for her employer-sponsored
insurance. Then she joined her husband in HealthPartners, a
Minnesota-based co-op with more than 1.2 million members.
The couple now pay only $80 a month for joint coverage and
receive better care, Whitehead said.
"It's a wonderful way to go," she said of the cooperative
that emails her lab results and operates a women's specialty
clinic near her home.
Such cooperatives may play a key role in legislation being
hammered out in Congress. Earlier this month, Health and Human
Services Secretary Kathleen Sebelius said the administration
would consider creating not-for-profit insurance cooperatives
as part of a sweeping reform package that President Barack
Obama has declared his top priority.
Obama has said reform should drive down healthcare costs,
provide insurance for the 46 million Americans who currently
lack coverage and not add to the U.S. budget deficit.
He and most Democrats want reform to include a federal
government-run health insurance plan to compete with big
private insurers. But Republicans say this so-called "public
option" is a road to European-style socialized medicine.
Cooperatives established and governed by members as
nonprofit organizations already provide many Americans with
phone, electricity and other services and credit union loans.
In healthcare, lawmakers have been looking at the Group
Health Cooperative in Washington state and its 550,000 members,
along with HealthPartners as well-established models of
successful competition with private insurers.
But co-ops are unlikely to provide more than a partial
solution to the problem of the uninsured because of their cost
and questions about how fast they could become competitive.
"These are not easy to form. It takes many years to develop
them to a size that would make them worthwhile," said William
Peck, a physician and director of the Center for Health Policy
at Washington University.
Many Democrats fear that even with government backing,
co-ops would still fail to cover enough people and would lack
the clout to drive down costs.
"On an individual basis, cooperatives have a lot of merit.
But as a systemic solution, they aren't likely to produce much
improvement very quickly," said Yale University political
scientist Jacob Hacker, an advocate of the public option. "We
definitely need big game changers in health care."
Many Republicans see government-backed cooperatives as
little better than the public option. Sen. John McCain, last
year's Republican presidential nominee, recently called them a
"back door" to government-run healthcare.
But far from the political wrangling, interest in the
cooperative model continues to grow. In Minneapolis, the
52-year-old HealthPartners added 80,000 new members last year
on top of 35,000 new members in 2007 and is considered the
country's largest member-governed, non-profit health
organization, said Chief Executive Mary Brainerd.
The group, which technically is a non-profit instead of a
co-op due to state statutes, operates on the cooperative model
with members setting governing policies, and profits poured
back into the organization.
HealthPartners offers open access to a network of more than
36,000 providers and 200 hospitals and has pay-for-performance
plans for hospitals and doctors who meet quality goals. It
offers classes to help people stop smoking and lose weight.
Administrative costs are 6 percent of revenues, compared to
10-20 percent, and sometimes higher, for some for-profit
"We've been able to do a pretty good job of managing costs
for our membership," Brainerd said. "But it is not easy to
build that overnight."
Washington lawmakers have said a new co-op would likely
need about 500,000 members to have enough leverage to compete
with other insurers. Start-up funds to support cooperatives
have been estimated at $6 billion to cover about only about 12
million new members, according to congressional research.
Whitehead said she doesn't know the right answer to solving
the healthcare crisis but the cooperative model works for her.
"I know plenty of people who don't have any health
insurance at all and don't have any options and they just can't
afford it," she said. "That's a horrible fear to have."
(Editing by Alan Elsner and Eric Walsh)