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About Cooperatives |
Healthcare CooperativesFOCUS ON HEALTH CARE COOPERATIVES 2009The Senate Finance Committee, a key player in determining what bill will ultimately pass Congress, has yet to make all the details of the proposal public. We do know that cooperatives are featured. While it is impossible to endorse or oppose such a proposal without knowing if it will be effective, this does represent a good opportunity to learn about health care cooperatives and how they work. Below are links to information you can use to learn about cooperatives and how the play into the debate on health care reform:
In its recent work on health insurance cooperatives, NCBA and NCBA's affiliates have been interviewed by the following news organizations:
To speak with an NCBA staffer on health care reform and cooperatives, contact Jim Jenkins, Director of Communications at 202 383-5447. Over the last twenty years, healthcare related cooperatives have emerged as a key strategy for
Just about every type of cooperative—consumer, worker, and purchasing/shared services—can be found in the health care sector. Many Health Maintenance Organizations (HMOs) were originally consumer-owned cooperatives. Though competition and the high cost of healthcare have reduced the number of consumer-owned HMO co-ops, several still exist and offer competitive and quality services to their members. Examples:
Purchasing and shared services co-ops are growing in importance in healthcare. Purchasing co-ops now provide services to hospitals, independent pharmacies, and state governments.
Hospital Group Purchasing Cooperatives Community-owned non-profit hospitals, university hospitals and others rely on national purchasing and shared services cooperatives that provide group purchasing for medical devices, equipment and other supplies. They also provide training and other educational services for their members. The co-ops are owned and governed by the hospital members, and, help them offer quality healthcare services at affordable prices, while remaining competitive with investor-owned hospitals. Without purchasing cooperatives, many small, community-owned non-profit hospitals would be even more subject to buyouts by investor-owned hospital networks.Examples include: Independent Pharmacy Purchasing Cooperatives With the advent of big box stores offering pharmaceuticals at reduced prices, many small, independently owned pharmacies have lost customers to nearby, or not so nearby multinational competitors. To help local pharmacies compete with conglomerates and continue offering affordable, locally available pharmaceutical services, pharmacy purchasing cooperatives allow small, independent pharmacies to band together to leverage the buying power of their large competitors.Examples include: State Pharmaceutical Co-ops and Buying Groups As the cost of prescription drugs has skyrocketed, state governments are forming purchasing cooperatives and multi-state buying groups to leverage their buying and negotiating power with drug manufacturers. Whether organized as co-ops or government programs, several require eligible members to pay a fee to join the co-op and benefit from the lower prices negotiated by the co-op. The programs allow states to help seniors, low-income residents and the uninsured to buy prescription drugs that are not covered under federal Medicare and Medicaid programs. Some programs, like the Texas Interagency Council on Pharmaceuticals Bulk Purchasing, use the state's bulk buying power to negotiate lower pharmaceutical costs for state agencies that buy prescription drugs. The New England Tri-state Coalition is a purchasing group for the states of Vermont, Maine and New Hampshire that negotiates price discounts and rebates with manufacturers. For more, visit the National Governors Association Center for Best Practices. Health Insurance Purchasing Cooperatives Health insurance purchasing cooperatives allow small businesses, typically operating within the boundaries of a particular state, and small municipalities to band together to negotiate for improved health insurance coverage for employees. While some HIPCs have been successful, some studies indicate that they face substantial barriers to offering their members better prices on health insurance. This is attributed to a variety of factors: state regulation that sets standards for premiums limiting the cost savings that can be negotiated; disinterest in, or, in some cases hostility among health plan providers toward the cooperatives; ability to attract only the smallest employers; and inadequate economies of scale—the co-ops are too small to leverage sufficient negotiating power.Successful examples include: Worker-owned cooperatives have emerged largely in the home healthcare field, where employees are poorly paid and turnover is high, producing quality reductions. Worker-owned home health care cooperatives offer better pay and ownership to their employees, resulting in improved living standards for health care worker-owners, higher worker retention rates, and improved quality. Examples include:
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