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Posted at 10:06 AM ET, 01/14/2011

Cooperating with co-ops

By Ezra Klein

Remember the health-care cooperatives that Sen. Kent Conrad proposed as an alternative to the public option but that never really got taken seriously? Well, they made it into the final version of the law. Odds are that they won't have much impact on the health-care market going forward because starting small means they won't have much leverage to bargain good prices with providers, and if they're not cheaper, then no one will choose them.

But they could end up being a really interesting part of the bill if regulators listen to Sara Collins and either mandate that providers charge co-ops "the lowest price charged to the most favored customer," or if co-ops are given the power to form a national purchasing authority that could negotiate on behalf of all members of all co-ops at once. This isn't exactly the sexiest part of health-care reform, but I guarantee you that a few small provisions in the bill and regulatory decisions about small provisions in the bill are going to end up being vastly more important to the future of the health-care system than we think. Maybe this'll be one of them.

By Ezra Klein  | January 14, 2011; 10:06 AM ET
Categories:  Health Reform  
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so while co-ops would have a positive impact I guess on PPACA if implemented what happens with their "forced pricing structure" when inevitably the criteria that they're required to meet falls off. They use a lot of generalities in that testimony such as "strategic use of electronic health records to support care redesign". So what if they say have to meet a certain threshold and one year they don't meet that threshold. What will happen to their preferred pricing? Will they keep it? Be forced to negotiate prices on everything? Will they be required to keep negotiated pricing in place in just such an event that their requirements are not met?

I'm guessing that no one will be watching the cookie store and as long as they orignially meet the criteria then they'll keep that preferred pricing for life whether its deserved (becuase of efficiencies or not).

Posted by: visionbrkr | January 14, 2011 11:02 AM | Report abuse

in essence it seems like a whole heck of a lot of bureaucracy for something that was supposed to help limit bureaucracy (the idea behind a co-op). But I guess what do you expect from government. Another 6 billion wasted!!

Posted by: visionbrkr | January 14, 2011 11:37 AM | Report abuse

Honestly, I don't see much difference between a public option and a national or even a large enough regional co-op. What I'd love to see (but am skeptical that it will) is that some of the more forward-leaning states like California, New York, Minnesota, Pennsylvania, Maryland, Illinois, & a few others form a "regional" co-op which acts much the same way as a public option. It's not difficult to see the advantages of doing it this way. It's also not difficult to see how this lends itself to a transition toward a single-payer model once states are given free-rein in 2014.

Posted by: willows1 | January 14, 2011 12:15 PM | Report abuse

I personally think the best solution is:

- Start a non-profit democratically-run-by-members health insurance co-op.
- Let the members collectively decide on the coverage rules, coverage levels, resulting premium-price tradeoffs, etc.
- Get everyone in on it, to leverage risk pooling and collective bargaining to the greatest extent.
- Instead of having the entire membership vote on every rule, have the membership elect a few hundred Representatives to do the day-to-day rulemaking.

Nah, it'd never work.

Posted by: mutterc | January 14, 2011 4:10 PM | Report abuse

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