Co-ops suddenly are the talk of health care

They run hospitals, have doctors on salary, and manage health care for hundreds of thousands of consumers.

And in the last few days, they have leaped to the forefront of how to reform health care in this country. As the Obama administration appears to be backing away from a government-run medical program, some government officials are touting health-care cooperatives as a politically palatable alternative.

Co-ops exist in almost every industry. Mount Airy's Weavers Way offers haven to organic-food lovers, while Florida's Choctawhatchee Electric Coooperative lights up homes.

Cooperatives generally are run by their customers and they are nonprofits.

In health care, the best-known organizations generally referred to as cooperatives are HealthPartners of Minneapolis and Group Health Cooperative of Seattle. But Washington policymakers have offered few details on how co-ops might operate in a new health-care system.

"There are a bunch of outstanding questions as to how this would work," said Robert Field, an expert on public health at Drexel University's law school. Those questions include whether co-ops will find enough customers to have bargaining power with medical providers, and how, or whether, the government will regulate the exchanges where co-op and other types of insurance are expected to be sold.

But the co-op solution may win over conservatives and others opposed to a government-run plan, Field said. That health-care co-ops already exist may help build support, he added.

Steve Findlay, senior health-policy analyst at Consumers Union, said co-ops usually appeal to a certain type of consumer. "It's generally for people who like the idea of farm co-ops and electric co-ops. These kinds of things are out there and usually are small scale," he said. If they remain small, they will be unlikely to rein in health-care costs, a key reform goal, he said.

Members of health-care co-ops can vote for the board members who run the organizations, giving them a direct say in policies. Although many members do not vote, some evidence suggests that their consumer orientation has led to better care at Group Health and HealthPartners.

"HealthPartners has been very assertive and progressive in improving the quality of care and giving enrollees preventive care when it deemed it was worth it," Findlay said.

One example: HealthPartners members who have diabetes get close monitoring, including checking cholesterol levels to head off problems, said Donna Zimmerman, the group's vice president of government and community relations.

Seattle's Group Health also says its focus on preventive care keeps costs down and leads to better patient outcomes. Group Health insures 600,000 people and treats them mostly through salaried doctors who work for it at medical centers it owns.

Group Health spokesman Mike Foley says the system works better than others, for example, by paying doctors for talking to patients on the phone - something traditional insurance does not do. With traditional insurance, doctors are paid for office visits and tests, creating incentives for unnecessary care.

"Talking to people on the phone and getting coaching on keeping blood-sugar levels right, for example, is much less expensive" than waiting until diabetic symptoms get so bad that a person ends up in the emergency room, he said.

Some experts, however, believe that the advantages of co-ops come not from their governing structure but from their ownership of medical centers. HealthPartners, for example, which has 1.25 million members, operates Regions Hospital in St. Paul.

Owning medical facilities and having doctors on staff allows health-care co-ops to dictate what gets paid for, an advantage that a co-op that simply insured its members would not have.