CO-OPs: A void in the Northeast

Politico looks at the uphill climb to establish consumer operated and oriented plans (CO-OPs), one of the provisions of the Patient Protection and Affordable Care Act (PPACA). As you might expect, the progress differs from one state to another:

The efforts are as different as the states where they’re brewing, from rural Montana, where the state’s former insurance commissioner has joined prominent physicians and leaders in labor and business to found a CO-OP, to The Freelancers Union, based in New York, which hopes to bring in some portion of its 150,000 members, among others.

“The $3.8 billion of social capital to start these up is as much money as I’ve seen or expect to see in my lifetime for a project like this,” said Sara Horowitz, executive director of The Freelancers Union. “Not having to meet the return on investment expectations of private capital can make all the difference.”

The idea of a fresh start is alluring to many in the healthcare system.

CO-OPs have the competitive advantage of “writing from a blank slate,” said John Morrison, who heads the National Alliance of State Health Cooperatives, an association set up in 2010 to pool resources as they try to organize.“We don’t have legacy systems — business practices that we’re locked into,” he said. “We can look at the data and target resources to the providers who have the best outcomes. We can focus on primary care, and I think a lot of us will work with the medical home model.”

While there has been progress in some regions, there is one conspicuous exception:

A handful of others are expected to apply independently, but significant parts of the country are not represented. Bill Thompson, principal and consulting actuary with Milliman, said he has heard of little or no interest from New England states.

“There’s a remarkable gap in what’s going on in the Northeast, and we’re scratching our heads,” he said. “The start-up and initial capitalization is there, but it seems to be a void up here.”

Many CO-OP watchers are waiting to see whether major institutional players, such as academic medical centers, might try to jump in. But the law has strict governance restrictions that require a majority of the board to be made up of CO-OP members, with some exceptions for people with special expertise.

Leave a Reply

Your email address will not be published. Required fields are marked *