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."