August 18, 2009

Health Co-ops a “very worthy idea,” some say

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The L.A. Times is among those reporting that the Obama administration may be shying away from government-run health insurance plans and opting for a new model: insurance co-ops. The Washington Post also took on the story today in an interesting piece that looks at two U.S. organizations as potential blueprints for Congress, including one in the Northwest.

Group Health Cooperative, a Seattle-based member-owned nonprofit, has been providing coverage to more than half a million residents in Washington and Idaho since 1947. It has been touted as a potential model because of its success as a fused insurer and provider, networking with local clinicians as well as employing their own doctors and medical facilities. Here’s how Group Health spokeswoman Katie McCarthy touts the group:

Group Health is able to focus on prevention and care because doctors are paid with a salary and aren’t focused on getting fees for services.

Co-ops have some obstacles to conquer, including lacking some of the cost-saving reinmbursement rates of government-run plans, and facing heavy opposition from private insurers. But their lure remains the same: nonprofit health-care co-ops would provide freedom from shareholder pressures and an avenue for marketplace competition.

Rep. Earl Pomeroy, D-N.D., a former state insurance commissioner is a backer of the concept:

A cooperative could provide an alternative source of insurance and some interesting competition for premium dollars. A co-op could operate at lower costs, in part because it would not need to pay its executives so generously.

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