August 18th, 2009
10:50 AM ET
5 years ago

Senator: Non-profit co-ops would help drive down health costs

Demoractic Sen. Kent Conrad is pushing for non-profit co-ops as an alternative to a public health insurance option in health care reform legislation.
Demoractic Sen. Kent Conrad is pushing for non-profit co-ops as an alternative to a public health insurance option in health care reform legislation.

NEW YORK (CNN) - A top Democratic senator touting the creation non-profit cooperatives for health care reform said the business model has been "very successful" and "would certainly contribute to holding down" soaring health costs.

But Sen. Kent Conrad of North Dakota told CNN's American Morning Tuesday that such a plan, floated as an alternative to public health insurance, wouldn't be the chief driver in decreasing health care costs.

"If you believe competition helps drive down costs, then they would certainly contribute to holding down costs," Conrad said, referring to cooperatives - which are not-for-profit membership-run health plans.

"I think it's very important not to overpromise here. The Congressional Budget Office tells us the big levers in terms of affecting cost lie elsewhere," Conrad said.

"The big levers are reforming the delivery system in this country to move to the kinds of integrated systems like Mayo Clinic and Cleveland Clinic that work so well in holding down costs and delivering high quality care and other reforms - the insurance market reforms and changing the tax subsidy to health care. The experts tell us those are the big drivers in terms of altering costs," Conrad said.

Doctors at the Mayo Clinic and Cleveland Clinic are paid fixed salaries for their services. In most other hospitals, doctors are paid fees for each service they perform, a structure that critics say drives up health care costs.

Other Democrats, such as U.S. Rep. Anthony Weiner - interviewed separately Tuesday on American Morning - said that the public option is crucial for reform and the co-op idea is weak, lacking the track record or the immediate clout for generating reform.

Conrad and Weiner are among those lawmakers in the center of the congressional debate over the proposed creation of a government-run health insurance plan, or public option in a health care overhaul.

Many Democrats, lawmakers and grass-roots citizens, have been strongly touting the public option plan, saying that offering it as a choice to consumers is crucial to health care reform.

Republicans have strongly opposed the public option as an alternative to plans offered by for-profit insurance companies. The public plan idea is vociferously opposed by some Americans, including those who have expressed their dislike for the idea at congressional town hall meetings.

One of the six senators in the Senate Finance Committee who've been trying to forge a health care compromise, Conrad has been saying a public option simply won't make it through Congress.

Over the weekend, administration officials seemed to indicate a willingness to drop the public option to land congressional approval for a health reform bill. The White House later sought to reassure its supporters that President Obama is not abandoning the fight for a public option.

"There have never been the votes in the United States for a public option," Conrad told CNN on Tuesday. "That's just a fact. That's why I was asked to come up with an alternative, something that might bridge the differences here. That's why I came up with the cooperative plan."

Citing health care cooperatives, Conrad mentions Land O'Lakes, Ace Hardware and the Group Health Cooperative in Washington state. He said Group Health has been in existence for more than 50 years, has 600,000 members and is "doing extremely well."

"In fact, it's one of the top-rated plans in all of Washington state. and how they function is they actually own a hospital, they have doctors that work for them, they actually provide health care. But there are different models that cooperatives could choose. It would be dependent on what the membership decided. That's how cooperatives are run," Conrad said.

Conrad, in fact, said he envisions a plan similar to Group Health, "where hundreds of thousands of people have gotten together and they've decided that they want to provide an option to for-profit insurance companies."

"If you look at what they've done, they have all of the things that most people are saying are necessary," such as electronic medical records and emphases on prevention and patient-centered care.

"That's really what the American people want," he said.

Weiner, of New York, said it would take years for a cooperative to be strong enough to negotiate lower prices and asserted that "we've seen no signs they've been able to hold costs down."

He also raised doubts about the assertion that there aren't enough votes for passage of a plan with a public option.

"I'm not sure we don't have 51 senators for a public plan," Weiner said. "We don't know that yet because we've been trying to get the bipartisan deal out of the Senate Finance Committee. If you get rid of the public option, you may buy one or two votes in the Senate." But he said many votes– from 50 to 100 - could be lost in the House.

But Conrad told CNN that the "best actuaries in the country" say that in "a reformed insurance market, which the rest of this bill will provide, that co-ops could attract 12 million members, be the third largest insurer in the country, and be a very effective competitor. These are people who are deeply knowledgeable about the insurance industry."


Filed under: Anthony Weiner • Health care • Kent Conrad
soundoff (51 Responses)
  1. Ravi

    Vouchers, along with ending unfair practices (like "dropping" sick people through cost prohibitive rate hikes and eliminating subsidies to insurance companies) would be the best way to go.

    That way, folks like me (denied for preexisting conditions) can get much needed health care, while keeping the federal government OUT of our lives. My opposition to a public option has nothing to do with spending or fiscal discipline... it's about respecting the Constitution by keeping the federal gov from getting even bigger (and taking yet another step away from Federalism and a step closer to Centralism), and preserving liberty.

    August 18, 2009 12:00 pm at 12:00 pm |
  2. DL

    I'm sure it will work great...after all insurance companies will always do the right thing..weren't they great after Katrina? This is status quo...nothing more. America's spoken, no more negotiation, no more fear tactics, lies, and intimidation...public option or hit the unemployment line. PERIOD.

    We are the laughing stock of the world, they marvel at our stupidity.

    August 18, 2009 12:00 pm at 12:00 pm |
  3. Lotta Muni

    We can't hope to follow the example of Canada or the UK until something is done to bring down the price of prescriptions in the US. If the cost for prescriptions in the UK or Canada were what they are here their Health Services would be bankrupt in no time. Something must be done to make prescription drugs more affordable here. Suppose we put the same restrictions on advertisement for drugs that there is on tobacco or alcohol. That seems to be the primary difference which drives our prices to upwards of 10 times what they are in other developed nations. We are the butt of many jokes from our friends in other countries for the way we have memorized complicated drug names and listings of side effects, which is a reflection of how inordinate amount of advertising there is for prescription medication, and of course the cost of these advertisements is absorbed into our drug prices. Before we talk about government takeover of health services we need to address something like this which is a real conntributor to the astronmical cost of health care in the US.

    August 18, 2009 12:01 pm at 12:01 pm |
  4. Lisa B

    Do some of you who have ghastly unfair and expensive individual or small business health plans really not support improving you or your small company's insurance purchasing power by banding together? That is what the co-op proposal is all about. Before people lost their minds, many in the past used to think this was a great sounding idea. What is the difference between then and now? Many are allowing themselves to be spoon fed disinformation that originates with the insurance companies and their stooges. Do your own research! Make civilized suggestions to your legislators. Don't act like spoiled children who have to have things exactly their own way or you'll hold you breath or scream. Even if you have good insurance now, you may not in the future. Our health care system ranks 30-something in effectiveness in the developed world. When did that become good enough for so many of you? Yet apparently you would prefer to do nothing. I will never understand it.

    August 18, 2009 12:01 pm at 12:01 pm |
  5. Bob from Pittsburgh

    Is completely ludicrous the way the American public reacts.

    Fact # 1… The US is supposedly the riches nation in the world.
    Fact # 2 .. The US has 40 plus million people with no health insurance
    Fact # 3 … the US has more than enough support from its citizens to afford wars overseas.
    Fact $ 4… smaller countries and with less per-capita income have universal health care for all its citizens,
    Who? Costa Rica, Chile, Sweden, Germany etc..

    So is not that American can’t afford universal health care, is that they have different priorities. In other countries such as the ones mentioned, health care is a human right; in the US is a privilege.

    Oh…!! And the top of the stupidity list… Show up to a rally with a gun… that will really fix health care..

    August 18, 2009 12:01 pm at 12:01 pm |
  6. Darth Vadik, CA

    Well of course they would, but that would mean no big profits for the people really controlling your healthcare decisions, the insurance companies, so of course the Republicans won't allow any of that.

    August 18, 2009 12:01 pm at 12:01 pm |
  7. S Callahan

    Common sense idea...since the Mayo and Cleveland Clinics have proven truthworthy in their management of costs and still give quality care....why not draw on their expertise...bring in the leaders on their team ..and help them lead the nation into a 'proper' health ins. plans that is inclusive.

    Becuase CNN is so focused on health care (as you should be)...I have to add this:
    Rest in Peace Former SK Pres. Kim Dae-jung....who made a very prothetic statement when recieving the Noble Prize
    "In my life, I've lived with the conviction that justice wins," he said in accepting the honor. "Justice may fail in ones lifetime, but it will eventually win in the course of history."

    August 18, 2009 12:03 pm at 12:03 pm |
  8. Moderate Democrat

    So basically....let's go for something that doesn't control costs? That sounds like a retarded plan to me.

    There can be only ONE! And it needs to be PUBLIC OPTION.

    MAKE the republicans Filibuster it. Stop dragging your heels and make the "Do Nothing Morons" show their faces!

    August 18, 2009 12:03 pm at 12:03 pm |
  9. Joshua College Station Texas

    Conrad is not on the side of the American people.

    August 18, 2009 12:04 pm at 12:04 pm |
  10. ghostwriter

    OK, it seems to me that co-ops aren't a terrible idea. I've been in something similar. However, just like the tort reform theory, there's nothing that guarantees this will lower costs. In my opinion, it should. A company would have to be stupid to deny saving costs to a large group of people. But one of the problems we had in doing this is that they kept raising costs each year. We began switching providers each year, meaning we had to re-verify if the doctors we had be seeing for years were a part of the new plan. And of course, then the new company would raise it's prices and we'd do the whole dance over again.

    August 18, 2009 12:05 pm at 12:05 pm |
  11. Andrea

    In Co-Ops the Board of Directors decide whether or not something is done. This would really be a disaster. Unless those who are shouting the loudest personally experience a catastrophic illness of either themselves or someone close to them, they will never understand the importance of having health care. This country's backward way of thinking is in need of reform. No public option: people will stay uninsured, costs go up because some can't afford to pay, and it will continue to snowball forever and ever. HEALTH CARE FOR ALL OR NONE!

    August 18, 2009 12:06 pm at 12:06 pm |
  12. gl, From Pittsburgh

    Harry Reid it is time for him to go. He have no controll of the senated.

    August 18, 2009 12:08 pm at 12:08 pm |
  13. Jasaah

    I think Kent Conrad is taking the American people for joke and don't recognizes them as human. If he think that he is paying back what he received from the insurance companies by standing in the way of reform, he might be dreaming or trying his luck to see who will join him from the democrates. I am surprise to know how uneducated and crazy some Americans are from watching these socall town hall meetings. This is the greatest country on earth and seeing people who don't even have a slit idea on what is going to benefit them is amazing. For example, a person telling the government don't touch my medicaid. It is a government run program, Please know this. I can not educate you American. I am from another country and so please know that medicaid is a government run program. THANKS

    August 18, 2009 12:09 pm at 12:09 pm |
  14. Deborah/Kansas City

    What is it about the word OPTION that people don't understand? This is about choice. No one would be forced to join the public plan if they choose to keep ther employer based insurance. There are some of us, who do not like our employers making all the decisions for us about our insurance and benefit options. There are some of us who do not like ever getting a raise becase all the money goes for healthcare insurance. I want choice and to be liberated from my employer dictating and controlling my OPTIONS.
    For those who want to be totally on their own, or say they don't want to be forced to buy health insurance; I think it should work like car insurance. Show proof that you already have health insurance; or have enough money in a healthcare spending account to protect the rest of us from having to pay your healthcare bills in an emergency; and you don't have to join.

    August 18, 2009 12:11 pm at 12:11 pm |
  15. Steve in Alabama

    COSTS people. Significantly reduce the costs and you minimize or eliminate the bulk the problems we're concerned about.

    Reduced costs can be effected without more governmental control on citizens by doing the following:

    1. Tort reform.
    2. Break the employment-health insurance relationship.
    3. Catastrophic insurance.
    4. Force drug companies to treat Americans fairly.

    These options don't force anything down the citizens' throats, but DO REQUIRE the special interests to deal fairly in a free and competitive market.

    The key here is not for government to BE a competitor in the market, but to enforce an open and fair healthcare market. This leads to competition which has always PROVEN to be the best way to control price and quality.

    If you think our current healthcare system is open or fair, you just don't get it.

    No to Obamacare. Yes to government enforcing a fair market.

    August 18, 2009 12:13 pm at 12:13 pm |
  16. Enough

    These people have NO idea how to drive down the cost of anything. Everything they ever do costs way more than anticipated and we end up paying for it. Just say NO.

    August 18, 2009 12:13 pm at 12:13 pm |
  17. Annie, Atlanta

    Blue Dog Dems like Conrad and Republicans are only playing politics here, and the only ones who lose are the American Citizens. They need to stop playing politics, stop standing in support of their corporate contributors, and start working for us. Our lives depend on it. Their lives depend on the failure of President Obama and the resulting failure of this great country.

    August 18, 2009 12:14 pm at 12:14 pm |
  18. smokey

    Oh get over yourself..If you are considering a co-op, then why not a public option..Oh, because with a public option this is goverment control, and we can;t have that...Strange, we have it in Medicare and SSN, and they are working just fine..I think the Pres needs to stop trying to appease you people and move on with the business for the amercian people..I feel, if what Pres Obama wants for the Aemrican people is the same choice that you people have as goverment employees, than there should not be any problems..Oh, i forgot that you people are taking so much kick back from insurance companies that that would not work..

    August 18, 2009 12:14 pm at 12:14 pm |
  19. Obama 2.0

    I agree, I don't want the Insurance industry to continue to drain us, nor do I want a Gov entitiy to do the same. Go with Co-opps.

    August 18, 2009 12:16 pm at 12:16 pm |
  20. ghostwriter

    People, I just got done clowning conservatives for putting out nonsense. The co-opts are a republican idea, and many are pushing for this. But like I said, I have some experience with these and in my opinion, it is an attempt to water down the public option.

    I also am not sure how allowing folks to buy insurance across state lines will help. 1st off, many insurers want you to use their doctors. I doubt any have any network doctors in other states.

    August 18, 2009 12:17 pm at 12:17 pm |
  21. GI Joe

    Insurance Companies are PAYING these shills to vote against the Public Plan.

    Their profits increased from 2 Billion/yr to 12 Billion/year from 2001 to 2007. They like the profits and they are buying our politicians' votes.

    August 18, 2009 12:20 pm at 12:20 pm |
  22. Randolph Carter, the snarky liberal Obamabot

    It's so funny that conservatives are against a public option which would remove the burden of high healthcare costs from the small businesses they are so fond of talking about. Oh well, I'd love to stay and chat with all of you all, but I really must be getting to the weekly meeting of the vast liberal conspiracy. Then It's back in the Prius and off to Whole Foods to get more pinot noir (that's wine). Then it's time to take Amelia to Violin lessons and Tyler to Soccer practice. Then a light dinner and witty conversation with my astonishingly beautiful European wife. Sigh. It ain't easy being a liberal. Ta ta! Have a nice day!

    August 18, 2009 12:21 pm at 12:21 pm |
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