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JAS Economics > Updates and Analysis > Self-managed Healthcare for all
Self-managed Healthcare for all
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For those of us involved in promoting economic democracy in the Third Sector, outside private businesses and the government, the current media coverage of a co-operative approach to affordable healthcare has been a nightmare. While cooperatives are a large sector of the US economy, as credit unions, rural electric co-ops, marketing co-ops like Organic Valley, or the ACE Hardware stores, not to mention the local food co-op, commentators are befuddled by the concept.
The following survey of innovative healthcare co-ops was written for those involved in worker- controlled enterprises, generally referred to as “worker co-ops” in the United States. Worldwide there are thousands of such enterprises, though probably not more than 500 exist in the US. Locked-out workers in Argentina adopted this democratic form eight years ago when their country went bankrupt. Again today as that country faces economic decline due to the world financial crisis, new workplaces are recuperated. The movie that Avi Lewis and his wife Naomi Klein produced in 2004, The Take, documents the story.
Cooperative healthcare schemes have been in the news lately as a compromise solution to satisfy Republican demands that there be no federally administrated health plan. According to the New York Times (6/19/09), Obama is supposedly “open to” compromises. A democrat from North Dakota, where co-ops like the rural electrification cooperatives initiated during FDR’s administration have served local interests for years, suggested the consumer co-op option.
The National Cooperative Business Association (NCBA) responded in a recent press release with a hesitant statement, since there is no finalized plan available, but endorsed “the use of co-ops to address the U.S.’s healthcare needs.” 1
Let’s be clear about what’s at stake here. Between the disaster of private insurance and the hope for a government-funded plan a third option seems problematic. Firstly, the notion that state-level customer health co-ops can negotiate better rates from the major insurance companies is dubious. Secondly, how will co-ops provide insurance for those who cannot pay, unless there is federal funding. Several experts have made this very clear. For example:
Howard Dean (that is Doctor Dean) has said:
“ [The insurance companies] will kill the co-ops completely by undercutting them, using their financial clout to do it. In the small states like mine and like Senator Conrad’s, you’re never gonna get to the 500,000 number signed up in the co-op that you need to in order for them to have any marketing [power].” 2
Timothy S. Jost, Professor of Law at Washington and Lee University notes:
We have tried cooperatives before. During the 1930s and 1940s, the heyday of the cooperative movement in the United States, the Farm Security Administration encouraged the development of health cooperatives. At one point, 600,000 mainly low-income rural Americans belonged to health cooperatives. The movement failed. The cooperatives were small and undercapitalized. Physicians opposed the cooperative movement and boycotted cooperatives. When the FSA removed support in 1947, the movement collapsed. Only the Group Health Cooperative of Puget Sound survived. Over time, moreover, even Group Health, though nominally a cooperative has become indistinguishable from commercial insurers–it underwrites based on health status, pays high executive salaries, and accumulates large surpluses rather than lower its rates. 3
The NCBA’s website mentions Group Health and HealthPartners, Inc as consumer co-ops. Of HealthPartners, based in Minneapolis, they say it is “the nation's largest consumer-owned HMO … [providing] coverage to nearly 660,000 members.” I am sure this is the case, but I interestingly couldn’t find reference to their cooperative status on the HealthPartners website.
While Group Health and its SF Bay Area ally, Kaiser Permanente, may be a step up from the usual for-profit alternative; they are hardly a model for universal coverage, if for no other reason than that their overhead prevents reduced insurance rates. And to stay competitive they deny coverage.
A practical non-market, public solution must be found, as a significant majority of Americans believe. A government plan, however, may not be the only solution. 4 If we examine healthcare in a few other countries, we can learn a lot about complementary plans that include cooperative structures.
Within the last decade, the limitations of the Canadian universal healthcare system generated a wide variety of co-op solutions. Last year 117 Canadian cooperatives were operating , 77 of these in Quebec Province, where a large cooperative sector sustains these ventures.
Threatened cutbacks to rural health services motivated the creation of these new co-ops. Some communities have organized local clinics and homecare and paramedic services co-ops and, along with national support for medical payments, they saved local institutions. In other areas doctors have joined together to establish services with the collaboration of the local community.
These new forms of providing cooperative healthcare are still in their infancy, but already their practical and innovative approaches have sparked replication. A universal healthcare plan like Canada’s, can meet local needs without sacrificing access for all. The advocates of these local approaches maintain that they can actually cut costs by adopting self-managed systems, for example, through use of online information and self-help groups to support “heavy doses” of preventive care.
Some of the most creative approaches to self-managed healthcare are happening in Japan. There consumer coops manage a 50 year-old network of hospitals, clinics and rehabilitation centers. Nearly three million members control 120 cooperatives. This community-led approach involves collaboration with caregivers and professionals to strive for effective health prevention practices.
“Within a context of disease prevention,” reports the journal Making Waves, “each clinic’s reputation rests on how healthy its members are, not on how many prescriptions its staff write or procedures they perform.” 5
Preventive care in these Japanese co-ops depends on affinity groups of neighbors, who meet on a monthly basis to assist each other in a healthy regimen of practices involving exercise, diet and simple lab work testing. This group called Han, not the family, is the basic unit of preventive healthcare.
Within the context of the privatized system that we endure in the United States, medical practice is crisis oriented and technological. Yet the evidence from numerous studies demonstrates beyond a doubt that a holistic social approach to preventive healthcare achieves the best results. Societies that foster equality (Japan, for example, has a lower salary disparity than the US), communitarianism, less stress and the usual balance of exercise and diet not only increase longevity, but also have fewer medical expenses.
A cooperative approach to healthcare that builds on social networks is a natural adjunct to traditional medical practices. In the United States, while extensive healthcare co-ops are “not on the table” as a vital, local supportive feature of a future public health plan, we do have examples of successful worker-cooperatives like the Cooperative Home Care Associates in the South Bronx and mutual associations like Manos Home Care in Oakland. Both provide services to clients with trained and respected staffs whose dignity on the job translates into more effective care.
In Philadelphia, a community-controlled healthcare project, PhilaHealthia, modeled on the successful Ithaca Health Alliance (IHA), faces a fight to be legalized by the State of Pennsylvania. IHA was founded 12 years ago to cover (for a $100 per year membership fee) twelve categories of common emergency. They also own a free clinic staffed by volunteer health-care providers two days a week. 6
However, the citizens of Philadelphia, after several years of applying for licensing have failed. Despite the prospects of reaching the 1,000 membership quota to initiate their plan, PhilaHealthia will begin organizing without legalization in the spirit of previous American rebellions. 7
These models of grassroots healthcare are adaptable to other communities. And with 50 million un-insured Americans as a pool of potential supporters, the requisite memberships may not be an unattainable goal. The collectives and worker cooperatives in the San Francisco Bay Area, with over one thousand members already tops that quota.
Of course local efforts can only perform limited functions. In California, for the third year in a row, a statewide single-payer health plan is before the state legislature. Essentially the same plan passed through the legislature twice before, only to be vetoed by the governor. Besides agitating for a universal single-payer plan, it might be a good idea to institute a self-managed system now. When a federal system finally gets adopted, then we can agitate for financial assistance for our homegrown healthcare facilities.
Bernard Marszalek
June 21, 2009
info@jasecon.org
For those of us involved in promoting economic democracy in the Third Sector, outside private businesses and the government, the current media coverage of a co-operative approach to affordable healthcare has been a nightmare. While cooperatives are a large sector of the US economy, as credit unions, rural electric co-ops, marketing co-ops like Organic Valley, or the ACE Hardware stores, not to mention the local food co-op, commentators are befuddled by the concept.
The following survey of innovative healthcare co-ops was written for those involved in worker- controlled enterprises, generally referred to as “worker co-ops” in the United States. Worldwide there are thousands of such enterprises, though probably not more than 500 exist in the US. Locked-out workers in Argentina adopted this democratic form eight years ago when their country went bankrupt. Again today as that country faces economic decline due to the world financial crisis, new workplaces are recuperated. The movie that Avi Lewis and his wife Naomi Klein produced in 2004, The Take, documents the story.
Cooperative healthcare schemes have been in the news lately as a compromise solution to satisfy Republican demands that there be no federally administrated health plan. According to the New York Times (6/19/09), Obama is supposedly “open to” compromises. A democrat from North Dakota, where co-ops like the rural electrification cooperatives initiated during FDR’s administration have served local interests for years, suggested the consumer co-op option.
The National Cooperative Business Association (NCBA) responded in a recent press release with a hesitant statement, since there is no finalized plan available, but endorsed “the use of co-ops to address the U.S.’s healthcare needs.” 1
Let’s be clear about what’s at stake here. Between the disaster of private insurance and the hope for a government-funded plan a third option seems problematic. Firstly, the notion that state-level customer health co-ops can negotiate better rates from the major insurance companies is dubious. Secondly, how will co-ops provide insurance for those who cannot pay, unless there is federal funding. Several experts have made this very clear. For example:
Howard Dean (that is Doctor Dean) has said:
“ [The insurance companies] will kill the co-ops completely by undercutting them, using their financial clout to do it. In the small states like mine and like Senator Conrad’s, you’re never gonna get to the 500,000 number signed up in the co-op that you need to in order for them to have any marketing [power].” 2
Timothy S. Jost, Professor of Law at Washington and Lee University notes:
We have tried cooperatives before. During the 1930s and 1940s, the heyday of the cooperative movement in the United States, the Farm Security Administration encouraged the development of health cooperatives. At one point, 600,000 mainly low-income rural Americans belonged to health cooperatives. The movement failed. The cooperatives were small and undercapitalized. Physicians opposed the cooperative movement and boycotted cooperatives. When the FSA removed support in 1947, the movement collapsed. Only the Group Health Cooperative of Puget Sound survived. Over time, moreover, even Group Health, though nominally a cooperative has become indistinguishable from commercial insurers–it underwrites based on health status, pays high executive salaries, and accumulates large surpluses rather than lower its rates. 3
The NCBA’s website mentions Group Health and HealthPartners, Inc as consumer co-ops. Of HealthPartners, based in Minneapolis, they say it is “the nation's largest consumer-owned HMO … [providing] coverage to nearly 660,000 members.” I am sure this is the case, but I interestingly couldn’t find reference to their cooperative status on the HealthPartners website.
While Group Health and its SF Bay Area ally, Kaiser Permanente, may be a step up from the usual for-profit alternative; they are hardly a model for universal coverage, if for no other reason than that their overhead prevents reduced insurance rates. And to stay competitive they deny coverage.
A practical non-market, public solution must be found, as a significant majority of Americans believe. A government plan, however, may not be the only solution. 4 If we examine healthcare in a few other countries, we can learn a lot about complementary plans that include cooperative structures.
Within the last decade, the limitations of the Canadian universal healthcare system generated a wide variety of co-op solutions. Last year 117 Canadian cooperatives were operating , 77 of these in Quebec Province, where a large cooperative sector sustains these ventures.
Threatened cutbacks to rural health services motivated the creation of these new co-ops. Some communities have organized local clinics and homecare and paramedic services co-ops and, along with national support for medical payments, they saved local institutions. In other areas doctors have joined together to establish services with the collaboration of the local community.
These new forms of providing cooperative healthcare are still in their infancy, but already their practical and innovative approaches have sparked replication. A universal healthcare plan like Canada’s, can meet local needs without sacrificing access for all. The advocates of these local approaches maintain that they can actually cut costs by adopting self-managed systems, for example, through use of online information and self-help groups to support “heavy doses” of preventive care.
Some of the most creative approaches to self-managed healthcare are happening in Japan. There consumer coops manage a 50 year-old network of hospitals, clinics and rehabilitation centers. Nearly three million members control 120 cooperatives. This community-led approach involves collaboration with caregivers and professionals to strive for effective health prevention practices.
“Within a context of disease prevention,” reports the journal Making Waves, “each clinic’s reputation rests on how healthy its members are, not on how many prescriptions its staff write or procedures they perform.” 5
Preventive care in these Japanese co-ops depends on affinity groups of neighbors, who meet on a monthly basis to assist each other in a healthy regimen of practices involving exercise, diet and simple lab work testing. This group called Han, not the family, is the basic unit of preventive healthcare.
Within the context of the privatized system that we endure in the United States, medical practice is crisis oriented and technological. Yet the evidence from numerous studies demonstrates beyond a doubt that a holistic social approach to preventive healthcare achieves the best results. Societies that foster equality (Japan, for example, has a lower salary disparity than the US), communitarianism, less stress and the usual balance of exercise and diet not only increase longevity, but also have fewer medical expenses.
A cooperative approach to healthcare that builds on social networks is a natural adjunct to traditional medical practices. In the United States, while extensive healthcare co-ops are “not on the table” as a vital, local supportive feature of a future public health plan, we do have examples of successful worker-cooperatives like the Cooperative Home Care Associates in the South Bronx and mutual associations like Manos Home Care in Oakland. Both provide services to clients with trained and respected staffs whose dignity on the job translates into more effective care.
In Philadelphia, a community-controlled healthcare project, PhilaHealthia, modeled on the successful Ithaca Health Alliance (IHA), faces a fight to be legalized by the State of Pennsylvania. IHA was founded 12 years ago to cover (for a $100 per year membership fee) twelve categories of common emergency. They also own a free clinic staffed by volunteer health-care providers two days a week. 6
However, the citizens of Philadelphia, after several years of applying for licensing have failed. Despite the prospects of reaching the 1,000 membership quota to initiate their plan, PhilaHealthia will begin organizing without legalization in the spirit of previous American rebellions. 7
These models of grassroots healthcare are adaptable to other communities. And with 50 million un-insured Americans as a pool of potential supporters, the requisite memberships may not be an unattainable goal. The collectives and worker cooperatives in the San Francisco Bay Area, with over one thousand members already tops that quota.
Of course local efforts can only perform limited functions. In California, for the third year in a row, a statewide single-payer health plan is before the state legislature. Essentially the same plan passed through the legislature twice before, only to be vetoed by the governor. Besides agitating for a universal single-payer plan, it might be a good idea to institute a self-managed system now. When a federal system finally gets adopted, then we can agitate for financial assistance for our homegrown healthcare facilities.
Bernard Marszalek
June 21, 2009
info@jasecon.org
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1 http://www.ncba.coop/pubs_newsrel.cfm?nrid=174
4 http://coopgeek.wordpress.com/2009/0...es-pro-or-con/ This blog has further information on Group Health that may be of interest.
5 (Making Waves Vol.19, No. 1 p.6) http://www.cedworks.com/waves.html
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