Co-Ops: A Very Tall Order

Commentary: August 19, 2009

Cooperatives are a very tall order: a new type of organization, never before tested on a large scale, meant to fix the apparently intractable problems of high and rising costs, barriers to access and poor quality care. Proponents can point to the impressive example of Group Health Cooperative of Puget Sound. But how that unique organization might get replicated thousands of times over, so that all of the U.S. is served by the new, improved approach, is hard to reckon.

For cooperatives to make a dent in the nation's health-care spending, we would need a great number of them come into existence. They would have to enroll a significant portion of the population in their local areas. They would have to obtain favorable rates from doctors and hospitals. They would have to manage the utilization of their enrollees effectively. They would have to demand high levels of accountability and transparency from providers. They would have to be threatening enough to get the established players to behave differently. They would have to stay in business after the start-up funding ran out. And all of this would have to happen consistently with each and every new cooperative.

The idea that new organizations are the solution to our problems is enticing, but not indicative of success. A major feature of the U.S. health-care system is its lack of standardization. Each physician's practice is organized somewhat differently. Each hospital has its own approaches to caring for patients - and in most cases the physicians treating patients in the hospital each take a different approach. That is why we have the variation in care delivery that has been so widely documented (and in many quarters denounced).

There is no evidence to suggest that cooperatives might somehow create a more standardized approach to health-care delivery. If we thought of them as franchises, and knew how they should be organized and operated, and had someone in charge of making sure all the new franchises followed the model of success, perhaps the model could be successfully replicated. But right now the notion of cooperatives appears built more on hope than on a real strategy.

Co-Ops: A Very Tall Order
By Elizabeth A. McGlynn
This commentary appeared in the Washington Post online on August 19, 2009.