August 18th, 2009
10:50 AM ET
9 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. Wake Up

    no co-ops. Look up socialism on wikipedia. Co-ops! Vouchers, regulation, portability and buying across state lines is only way to give people health care without ruining this country.

    August 18, 2009 11:33 am at 11:33 am |
  2. Grrr-awful-o

    But we really want to know more about Bristol Palin than all this silly healthcare stuff. There's nothing about Sarah Palin here at all!!! This is George Bush's fault!

    August 18, 2009 11:33 am at 11:33 am |
  3. eolufemi

    All that I've read from the experts suggests that the co-op is an even bigger social experiment than the public option. If the argument against the public plan is they aren't sure what it will do to the insurance companies, why aren't they making that same argument against co-ops? To me I would rather protect the interests of consumers than the interests of the insurance companies. So I want the public plan.

    August 18, 2009 11:37 am at 11:37 am |
  4. Doug, New Jersey

    Kent, you pretend that this is about Health Care for the Obama-bots when it is not. This is about the socialist take over of our nation, taking away the hard working, repsonsible, honest, fair, play by the rules American's rights, freedoms, and their hard earned wealth.

    August 18, 2009 11:37 am at 11:37 am |
  5. RR

    You want to drive down health care costs? Here's how: bring in the free market. Right now you can only buy a health care plan in your state that your state approves. You can't buy health care from another state. Allow people to shop all over the country for the best health care plan.

    Is there a Louisiana Geico, Louisiana Allstate, etc for auto or life insurance for people in Louisiana? No, but there's a Louisiana Blue Cross for health care? Why? Why not allow the same competion for health insurance as we do for auto and life insurance?

    August 18, 2009 11:39 am at 11:39 am |
  6. Lisa P

    The real "big lever" is the administrative and marketing costs - that's where 39% of every private insurance plan premium payment goes, and 16% of group plan payments. Only 3% of Medicare's budget goes toward administrative overhead - the rest goes directly to patient care. And let's not forget the cost to health care providers of having to deal with multiple payers, each with their own system and restrictions.

    The way to save all that wasted money? Single payer. But for some reason the Blue Dogs don't want to talk about that. Therefore I have to conclude that they're more interested in saving the private insurers than in saving money or in real health care reform.

    August 18, 2009 11:42 am at 11:42 am |
  7. J TN

    Conrad is a sellout, crook and paid spokesman for the Health Insurance companies. I wish he would drop the D next to his name and put an R there instead. He is a disgrace.

    August 18, 2009 11:43 am at 11:43 am |
  8. WP

    A public option is THE ONLY OPTION, and these Dems and Repubs need to face reality NOW!

    August 18, 2009 11:44 am at 11:44 am |
  9. Fair is Fair

    Medicare is the reason healthcare costs are out of control. The greater the number of people on Medicare, the greater the cost shifting to private insurance.

    All you need to do is look at a graph which shows the number of Medicare recipients over time. Then look at a second graph showing healthcare costs as a percentage of GDP over time. Look at a third graph showing the rate of inflation in the healthcare sector over time. The trends are mirror images.

    No silver bullet answer to the problem – as long as the consumer of services has no financial interest in being a WISE consumer of services. Medicare has absolutely no cost containment measures at the consumer level built in.

    A public option, basically Medicare-Lite, will only exacerbate the problem.

    August 18, 2009 11:46 am at 11:46 am |
  10. Fort Lauderdale

    Put people in big groups. As some with experience in benefits administration, that will bring down costs. Big groups get much better insurance rates and better choice of plans. Also, some larger groups, the rates are not based on age. That brings down costs for us aging Americans and our families. But small businesses are being killed by the cost of health care because of insuring only a few people. Ditto for individuals. If the public option were to bring down costs, then Medicare and Medicaid (public programs) would have brought down costs. But they increased costs because they are badly managed and there is so much fraud and also because the payments to providers are very low so everybody else has to pay MORE to make up for what the public options are NOT paying. Co-ops, if they are big groups are a good idea. Big groups will bring down costs, and by putting individuals into big groups will certainly bring down costs.

    August 18, 2009 11:46 am at 11:46 am |
  11. RJ- GA.

    From Day One, Sen. Conrad has worked against the public option plan, the Democratic party must start to hold accountable people like Sen. Conrad ! Harry Reid has allowed these so called Democrats to continue to derail health care, when one starts to examine true disagreement, you find huge sums of insurance industry contributions to these individuals !

    August 18, 2009 11:46 am at 11:46 am |
  12. Freedom

    Co op is fine just keep the goverment out from running health care.
    We don't want the country being one big VA HOSPITAL.
    that system doesn't work at all.

    August 18, 2009 11:48 am at 11:48 am |
  13. Jimmy

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

    I may be wrong, but I believe the CBO states otherwise.

    Conrad has been locked on this notion of coops and seems to disregard any and all other options. Not a very productive method.

    August 18, 2009 11:48 am at 11:48 am |
  14. Georgio

    And Public option will increase the health cost?. I thought counting votes is the job Dick Durbin or Reid?

    August 18, 2009 11:49 am at 11:49 am |
  15. charlotte di domenico

    i think if they are going to have a public plan , then ALL AMERICANS including federal, union,state, county, self employed, unemployed, illegal aliens, and obama himself should have this plan. if its going to be sooo wonderful for the american public then they should all be enrolled.after all are we all not equal anymore?

    August 18, 2009 11:50 am at 11:50 am |
  16. Prosecute the Bush 6

    No. Conrad is wrong. The Single-payer plan or Medicare for all would be the best at driving down costs.

    August 18, 2009 11:50 am at 11:50 am |
  17. Lisa B

    I am so proud of my former Senator from North Dakota. He is emerging as the voice of civility and pragmatism on this complicated issue and he is keeping his eye on the ball. Furthermore, I trust him. Keep talking Senator Conrad!

    August 18, 2009 11:51 am at 11:51 am |
  18. Sniffit

    Perhaps they would. But after well over a half century of the "free market" deciding to implement them, I don't trust it to magically decide to do it tomorrow....nor do I trust it to do so without trying to loophole the entire project into oblivion so the upper echelon of the corporate world can still buy themselves $30K crappers.

    August 18, 2009 11:52 am at 11:52 am |
  19. not to overpromise

    how about its important to proceed and get something done

    you are mired in the mud

    August 18, 2009 11:52 am at 11:52 am |
  20. Lisa B

    You people who keep harping on "socialism" need to get mental health counseling. Oops! You probably can't with your current health coverage. Delusions of persecution and paranoia are very unflattering and reduce your credibility to zilch.

    August 18, 2009 11:52 am at 11:52 am |
  21. Sniffit

    sorry, should've read: "But after well over a half century of the "free market" NOT deciding to implement them..."

    August 18, 2009 11:53 am at 11:53 am |
  22. gl, From Pittsburgh

    You lying red neck fool! NO TO CO-OPS.

    August 18, 2009 11:55 am at 11:55 am |
  23. yuri

    The only problem encountered by the healthcare cooperatives will be a spirited opposition from free lancin' privte practitioners, who may see it as a risk for their potentially unlimited income inflow. It may sound too theoritical, but it is what it is.

    August 18, 2009 11:57 am at 11:57 am |
  24. gl, From Pittsburgh

    I am a county working in have avery good Government Health Care Plan that I think everybody should have even if I have to paid more.

    August 18, 2009 11:57 am at 11:57 am |
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