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Health Cooperatives: A Viable Alternative to a Public Plan?

Hudson's Center for Science in Public Policy
held a conference on

Health Cooperatives:
A Viable Alternative to a Public Plan?

October 6th, 2009

Noon - 2:00pm

As the debate over health care reform has escalated, nonprofit health insurance cooperatives have been proposed as an alternative to a government-run health insurance option. Group health cooperatives have long been a part of the American health care landscape. What do we know about how they work? Can they achieve the important objectives of health care reform by increasing choice and competition and controlling costs of health care services?


Panelists included:

Joseph Antos, Ph.D., Wilson H. Taylor Scholar in Health Care and Retirement Policy, American Enterprise Institute and former Assistant Director for Health and Human Resources at the Congressional Budget Office.

Edmund Haislmaier, Senior Research Fellow in Health Policy Studies at the Heritage Foundation, pioneer in health insurance reforms in Massachusetts and frequent television commentator and writer on healthcare.

Robert Rosenberg, M.D., Professor at the Department of Global Health at George Washington University, former CEO and Medical Director of the Group Health Association in Washington, DC, one of the first health cooperatives in the United States.

Barbara Blaylock, M.D., a board-certified internist with experience in a variety of clinical settings including university and VA hospitals; private practice; the Indian Health Service in Arizona, Montana, and New Mexico; a staff model consumer-run co-op HMO; free clinics for the poor; and Kaiser Permanente in San Diego and Washington, DC.

The panel was moderated by Tevi Troy, Visiting Senior Fellow at Hudson Institute and writer and consultant on health care and domestic policy. Previously, Dr. Troy served as Deputy Secretary of the U.S. Department of Health and Human Services, where he oversaw all operations.

The conference was sponsored by The Center for Science in Public Policy at Hudson Institute, whose director Jeremiah Norris introduced Dr. Troy and welcomed the panelists and participants. Mr. Norris is a Senior Fellow at Hudson Institute and previously served as a senior adviser with Harvard Medical School's international programs where he worked with Brazil's largest health cooperatives, of over 1.8 million members.

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Comment by william w fliegel on October 10, 2009 at 8:54pm
Both the "public option" and heath care co-ops are poor alternatives to applying the Congressional power of the subpoena to drag the health insurers' CFOs to the Hill and beat them over the head with some dusty old anti-trust legislation should it be determined that an oligopoly exists. The earnest belief that some sort of a public plan is necessary to provide or initiate competition between private insurers without any data to support this assumption is not only silly but is so unprofessional that in the real world a scheme such as this would support immediate termination of employment on the grounds of incompetence.
Medicaid and Medicare are nothing more than check writing machines with absolutely no management control and who is to say a public plan , in whatever form , won't be a clone of CMS? This will prove to be a nightmare sequel to all the CMS waste, fraud, and abuse perpetrated on the taxpayer. Shall we call it the "Son of CMS"?
However if I were a legislator with any clout, I would introduce legislation mandating the Executive Branch to begin to effectively and efficiently manage all of its responsibilities in a manner typical of the private sector with the anticipation of an annual cost savings of $200 BB from CMS, alone, and without resorting to giving seniors a hair cut.
The Heritage Foundation had performed a comparison of administrative costs of private vs. public using CMS as the model. The study determined that the private sector was more competitive on a unit cost bases ($ admin cost/claim) than CMS. Government , however, maintained greater admin cost competitiveness by rearranging the data to reflect admin $ per $ of claims distributed. Naturally, the expense of each claim submitted by seniors and those in the end stage of renal failure are, on the average, greater than those which are normally managed by the private insurers.
The number that I am really interested in is the difference in overhead of the private vs. public option (using the CMS as the model). I understand this was reported by the Son of Sarbanes several weeks ago at a (closed) town hall and the numbers reflected Government favorability
The variance was so outrageously significant that it should have been questioned in a knee jerk manner, but it was not. Here again this is another example .of skewing the numbers by misrepresenting the facts.
The Washington whiz kids, without any doubt, compared the CMS expense budget ( not the actual data) with a private carrier's P&L. I am nearly certain that several CMS expense items are not being distributed to CMS but are being absorbed directly by HHS. Furthermore If I were doing the numbers, the approximate $200BB loss due to waste fraud and abuse would be included as part of CMS expense for the purpose of any legitimate overhead comparison and/or cost determination.
This entire matter including the American Reinvestment and Recovery Act, which has no greater economic multiplier than flipping hamburgers at McDonald's is a grand nightmare or more. It is almost as though that I am Rip Van Fliegel who fell asleep 50 years ago , suddenly awakened, looked around, and soon realized that I had fallen asleep, died in my sleep and woke up in Hell!



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