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Health Cooperatives Are Not the Answer

Their poor record has not stopped the Senate Finance Committee from putting forth $6 billion to help restart them.

by
Kacie Marano and Jeremiah Norris

Bio

October 24, 2009 - 12:00 am
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Conservative critics of the idea are equally dismissive. A major criticism is the unrealistic ambition to simply restart cooperatives, an idea that will prove next to impossible to break into the current market. Others are wary that the health cooperative rhetoric is simply the public option with a different name. If the government provides the capital to front end cooperatives, if the government picks the people to spearhead the venture, and if the government controls the rates, then what really is the difference?

Despite the long history of health cooperatives in the United States, there are only two remaining health cooperatives in the entire country. Yet this poor record has not stopped the Senate Finance Committee from putting forth $6 billion to help restart more cooperatives. This may seem like a lot, but in reality it is far from enough to make health cooperatives a viable competitive solution. Even if they can work in specific locations, they are unlikely to establish enough of a competitive presence within the health care market. This is largely because of the near impossibility of mass replications of cooperatives, regardless of how much money is being put in. The basis of the cooperative concept is community ownership and control. For instance, members elect the board of directors from among the membership. If the government subsidizes them with $6 billion in seed capital, would they still be cooperatives in anything other than their name? Would they not be too big to fail, requiring public takeover and ownership?

It seems what the health cooperative and overall health care reform bills have succeeded in doing is forging together liberals and conservatives united in disagreement. While it is nice to have diverse people agree on issues, an agreement that an idea will fail won’t revamp the health care system. This rare agreement must beg a larger question. If so many people agree that health cooperatives and the current health reform bills in Congress are so wrong, why is the Senate Finance Committee still offering $6 billion in subsidies to breathe new life into cooperatives — unless it is to morph them into the public option at a later date?

Health cooperatives are not a means to a positive end, but simply another finger in the dam of health care. Why, then, are they still a possible solution? Perhaps because the health care debate has moved long past a time for logic and has progressed into the political weeds.

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Kacie Marano is the Executive Assistant at the Center for Science in Public Policy; Jeremiah Norris is the Director of the Center for Science in Public Policy.

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4 Comments, 4 Threads

  1. 1. Eric

    Although I sometimes enjoy reading all the articles discussing this or that aspect of the health care debate we must always keep one thing in mind, the Democrats goal is NOT to increase coverage, lower costs, or in any way improve the health care system in this country. Their goal is to take it over in order to increase their control over We the People. All the alternative options they float in order to gain a little more support from Blue Dog Dems and Liberal Repubs is simply cover. Progressives NEVER take their eye off the ball. They just take what they can get and ask for more later. ANY compromise on health care that gives them one iota of what they want is merely one step closer for them to their ultimate goal of a single payer government run system.
    Obama has said so, Pelosi has said so, Shakowski has said so, and countless others have said so. Why would any rational, liberty loving person give these socialists an inch? Just say no.

    The only answer is the market and the reduction of government intervention and manipulation.

  2. 2. JP

    Apparently, we must always keep one crazy, untenable canard in mind.

  3. 3. goy

    What’s desperatedly needed is government reform, not health care reform.

    Every attempt by government to meddle in health care has produced conditions that cause health care costs to rise at successively accelerating rates well beyond inflation, going all the way back to Medicare, continuing with HMOs and then with tax incentives for group comprehensive health care coverage. The trend is clear.

    The government created the current ‘crisis’ by systematically destroying the free market for health care, forcing costs to skyrocket to the point where even routine care is excessively expensive, and conditioning Americans to conflate health care and fully-paid, comprehensive group insurance. Health care and “coverage” are not the same thing.

    As Einstein’s observations regarding insanity prescribe, the problems created by government meddling in health care will not be resolved by more government meddling in health care. We must work to restore the free market in health care and bring the costs of routine health care back into equilibrium with other routine costs of living. That is the key. Increasing dependency on government is social suicide.

  4. 4. goy

    What’s desperatedly needed is government reform, not health care reform.

    Every attempt by government to meddle in health care has produced conditions that cause health care costs to rise at successively accelerating rates well beyond inflation, going all the way back to Medicare, continuing with HMOs and then with tax incentives for group comprehensive health care coverage. The trend is clear.

    The government created the current ‘crisis’ by systematically destroying the free market for health care, forcing costs to skyrocket to the point where even routine care is excessively expensive, and conditioning Americans to conflate health care and fully-paid, comprehensive group insurance. Health care and “coverage” are not the same thing.

    As Einstein’s observations regarding insanity prescribe, the problems created by government meddling in health care will not be resolved by more government meddling in health care. We must work to restore the free market in health care and bring the costs of routine health care back into equilibrium with other routine costs of living. That is the key. Increasing dependency on government is social suicide.
    BTW I love your blog!

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