How to start a health care cooperative

Let’s step back from whether we think that health care co-ops would be an acceptable substitute for a public plan, and focus on how to make them as useful and effective as possible if they are the chosen plan. This will help us to understand whether co-ops really are feasible or just a bamboozle. It is one thing to believe (as I do) that co-ops could be up to the task; to claim that the plan being considered is the way to get there is another kettle of fish.

In particular, let’s look at the co-op development process, and try to determine what would be required to get one of these cooperatives launched. This will be no easy matter, and this topic is my main source of uncertainty about whether the co-op plan is likely to be mostly effective or mostly a train wreck.

A lot of what follows is based on my own experience of co-op development consulting with the Northwest Cooperative Development Center and in other settings, as well as a training I received through CooperationWorks! It is also generally supported by other professionals, including USDA Rural Development, (especially interesting because it provides a glimpse into the government’s current involvement with co-op development, which has funded some of my work), the Cooperative Grocers Information Network, and the Food Co-op 500 project. The latter two guides are designed for food co-ops, but their general process is more or less applicable for the purposes of this discussion, since most food co-ops and the proposed health care co-ops are both consumer-owned. I hope these links are helpful leads for anyone wanting to start any sort of co-op.

I’ve identified several issues that I believe must be addressed. I’m assuming that there are state and regional cooperatives, rather than a single national co-op.

First, the foundation: Co-ops really need to come from the grassroots, so we’ll have to launch steering committees to move the process forward. My hunch is that these should include representatives from other types of co-ops (who can bring expertise during design and their membership bases later), faith communities (many of which have teachings that are complimentary to cooperative economics), groups involved in medical reform advocacy (to keep us focused on meeting society’s needs as a whole), and other social and small business groups. Due to the complexity and size of the task, I would guess that a couple dozen people will be needed in each case. Some of these individuals will be on a steering committee, but most will be on more focused committees devoted to tasks like outreach and legalities.

Related to this, we’ll need members. Lots of members. I’ve been hearing a half million as the critical mass, although I’m not sure of the basis for that, beside being the size of both currently successful models (Group Health and HealthPartners). I suspect that a federation of smaller co-ops could also do quite well by pooling its resources. Even so, I’m (wildly) guessing that we’ll need a couple hundred thousand per state, or more; feasibility studies will be needed. Whatever the number, it will be big, and our efforts might be complicated by lingering resentment that the co-op plan got in the way of a public or single payer plan.

Next, the scope: We’ll need to figure out what each co-op will and won’t do. This will include services provided, as well as geographic scope. These are likely to be determined by law, but I would like to offer some thoughts about issues I see and how the law could be as harmless and helpful as possible. One of the biggest objections that I’ve been hearing is that co-ops would not be large enough to effectively negotiate for better prices. I’ve previously shown some examples of co-ops that have done something like this, but those examples took decades to mature. It will be essential to get our health care co-ops launched as broadly and quickly as possible, without sacrificing the need for solid planning and organizational development. I also hope that the legal framework doesn’t hinder co-ops that want to move beyond simple insurance.

I don’t believe the doubts that co-ops can’t/won’t be big enough, but this is an essential concern that must be always on our minds; these co-ops will need to get big, and do it quickly. To address this concern, I think it would make sense to start with a few co-ops that are each available in multiple states, and then they gradually reproduce by something like cell division. That would make more sense than trying to create co-ops in states without much population or experience, and then adding the step of joining them by federation. This will also solve the problem of states that have a weaker position, either through small population (North Dakota) or minimal co-op infrastructure (Nevada) or both (Alaska). For example, it might make sense for California, Nevada, Utah and Arizona to start together, while Washington, Oregon, Idaho and Alaska work with Group Health to launch their efforts. This could all be done knowing that states would split off as soon they were ready, while maintaining ties for maximum bargaining weight.

Next, the money: Another big issue is going to be the financing, and again we have to wait and see what our lawmakers dish out. We’re pretty much going to have to beg and bother them to move this in a direction that is likely to support sustainable co-ops, by providing enough grants and loans that capitalization is not the main obstacle. But there may also be some potential for other co-op sectors – particularly credit unions – to provide  equity. This could be handled through nonvoting preferred shares.

Finally, technical assistance (in which I have a little conflict of interest): It will be very helpful to connect these organizing groups to development expertise, to industry expertise, and to each other. Development expertise and general guidance can generally be provided by members of CooperationWorks! (also a co-op), which has members providing service to most states. Next, we’ll need to learn everything we can from current and historic models (including nonprofits). Finally, we’ll need to network these planning groups, so they can learn together.

This all will be quite an undertaking, but fortunately there is already a network of developers in place. I’m optimistic that we could develop training and planning resources once, so that each planning group can support each other, and move forward together. For example, a manual could be created and distributed at a summit, which would feature a variety of presenters.

There are still a lot of questions to be answered, but I hope this framework is helpful in understanding the road that might lay ahead.

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2 Responses to How to start a health care cooperative

  1. Stacie Finn says:

    Dear Fellow Co-op advocate:

    I am very interested in helping to start a health care co op as I think these non-profit organizations are our best bet in resolving the American health crisis. I have spoken with several of my “doctor/dentist” friends and they believe the same is true and they also believe that, with my experience, I would be very helpful on this front. Here is the short version of story and experience with (as I call it) public “hell care” and why I strongly believe I would be a great addition to your cause. I hope you enjoy the read.

    Unfortunately my injury happened on the job while teaching, therefore my “health care” (if can even be called that) is under the socialized/public run system of Workers Compensation. From a highly functional choreographer and Professor I was rendered bed ridden for three long years waiting for Work Comp to approve the surgery I desperately needed to repair my back. I lay in pain, in the corner of a room from 2003 to 2006 while their “utilization review board” consistently denied my surgery. In 2006, after a long legal battle, I had my surgery only to find out one week later that I contracted an infection during my hospitalization for back surgery. I spent 4 days in an ICU unit and then was transferred via ambulance (about 30 miles) to the hospital where my back surgeon could oversee my care. (It should be noted that my ICU care or the ambulance bill were never paid for by work comp, thus my good credit was ruined)

    After a two week hospital stay, for my infection, my husband had to give me daily antibiotics through IV for six weeks. This infection caused my back surgery to fail. My doctor’s request for another surgery was continuously denied and it wasn’t until I had to be hospitalized for pain that my back surgery was approved. During this surgery 12 bolts and 2 six inch bars were put into my back.

    I then waited 2 more years for work comp to approve physical therapy, which was cut off by work comp after only 4 months, even though my Agreed Medical examiner said I would need it for at least one year. Please note: This is many years of my life and my husband’s life, in the above short paragraphs.

    Additionally though out this entire time frame I was court ordered to take all 14 medications prescribed by my work comp doctors (which I had to pay for) As a result of all these medications, the long wait for surgery and lack of physical rehabilitation at this same time last year, I literally, could not lift my head off of a pillow as I had become so physically and mentally exhausted by my “health care.”

    At this time, I made a decision that if I didn’t take charge of my own recovery I would never get well. I “detoxed” myself (at home) off of all the medications (including morphine) and used my knowledge of physical therapy to slowly, but surely recover. Additionally, it should be noted that even though I pay $700.00 per month for my own private insurance, (Anthem) I was not allowed to use it because this is a work injury.

    Today I am fully functional and getting ready to return to my job, however, I have just learned that my two upper bolts are loose and in need of surgery. This surgery has already been denied and I have been told that I will have to “wait until I am in so much pain that hospitalization is required” to have the surgery to remove all bolts and bars as well as repair my back.

    Luckily I have a wonderful husband who has stood by me every step of the way and I credit him with literally saving my life. As a result of this injury I could not attend my only daughter’s wedding or the birth of my first grandchild. Additionally, I have only told you the main points of my horror story. There are many, many things I have left out, but should ultimately be told, at the right time.

    If you saw me today you would not think I have been through what I have endured nor would you think I am in need of another surgery. As I stated above I am planning to return to my job in January and I am in the beginning stages of starting two businesses.

    I have extensive knowledge of business as I have been on numerous boards. Though I have a Masters of Fine Arts degree I was a pre med student for many years before I changed majors. I have worked with orthopedics helping their physical therapists rehab dancers as well as gymnasts. I have been a medical transcriber and I used to read medical charts to doctors and lawyers. I have been my own patient advocate and was successful in finding doctors and obtaining the needed care for my grandmother who, when she moved in with me, was diagnosed with terminal cancer and had been given four months to live. With determination and sheer will I found a surgeon to treat her cancer and she lived another twenty five years. I also cared for my mother who died from a brain tumor in 2000. Additionally I sincerely feel that I have very much to offer in terms of the development, structure and I have experience in fund raising. If needed, or desired,, I can send you recommendations.

    As I mentioned earlier I am developing two business and do own the web domains, however, the sites are not up and running yet. One of these companies is a new, fun product that will hopefully be used in the medical field as well as by mothers and other care givers. (Trademarks are pending) I only mention this because you asked for a website, not because I need your help in developing my product. If a website is required to work with you, I can tell you that I will have them both up and running in the next month, if all goes as plan. With this said, however, I cannot emphasize enough that the sole purpose of this e mail is to ask how I can get involved in starting a health care co op or learn how to start one myself and not, in any way, to promote any of my products.

    I hope that you can find good use for my talents and enthusiasm or minimally point me in a direction where I can either become involved or begin to start my own co op. I am a good team player and love a good challenge as well as working and helping people.

    I thank you very much for your time and consideration.

    Sincerely,

    Stacie Finn
    Long Beach, CA

  2. Frank says:

    Stacie, did you get your medical coop up and running.? We are also interested in joining a coop. Please let me know
    Thanks

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