CO-OPs- Nebraska: Health Care CO-OP Could Benefit

The Obama administration last month announced that it would bankroll formation of a nonprofit health care cooperative, similar to the farm co-ops familiar in rural states, to serve Nebraska and Iowa.

Midwest Members Health would give consumers something unusual in these parts -- welcome competition for the giant companies that dominate the market.

The American Medical Association last year ranked Nebraska the sixth least competitive market among the states.

The new cooperative is Iowa-centric in that its leaders are based in Iowa. Heading the new venture are former Iowa state insurance commissioner David Lyons, Cliff Gold, a former executive at Wellmark Blue Cross Blue Shield in Iowa, and Iowa venture capitalist Steve Ringlee.

The new co-op won a loan for $112,612,100 out of $640 million awarded to six plans for co-ops. Other states to be served by the new co-ops are Montana, New Jersey, New Mexico, New York, Oregon and Wisconsin.

The concept proposed by Midwest Members Health is particularly promising in several aspects.

Most importantly, the new co-op plans to utilize Midlands Choice, an existing network of doctors and hospitals, rather than embarking on the massive task of trying to create its own provider network. Midlands Choice already has contracts with all hospitals in Nebraska and Iowa, and 90 percent of physicians.

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Past efforts to set up health co-operatives do not inspire confidence. Attempts in the 1990s to set up health cooperatives in Florida, Texas and Colorado were unsuccessful. The Government Accountability Office said in 2000 that small cooperatives did not have enough leverage to provide savings for consumers.

The Obama administration, in fact, predicted itself that 40 percent of the loans it just issued to set up new health insurance co-ops would not be repaid.

Lyons said that if the nonprofit insurance co-op couldn't work in Iowa and Nebraska, it probably wouldn't work anywhere. That may not be the most glowing endorsement one could make for the concept, but it has the ring of truth.


http://journalstar.com/news/opinion/editorial/columnists/editorial-health-care-co-op-could-benefit/article_7fc03a20-37f0-52b8-ad21-13536b93d9fa.html
Hat Tip: Lincoln Journal-Star