Confusing apples with oranges does extreme disservice to both. In “Health Cooperatives Find the Going Tough,” New York Times reporter Reed Abelson confuses cooperatives with “COOPS” (consumer owned and operated plans). Unpacking Mr. Abelson’s confusion constitutes a national service to combat spreading healthcare deserts disenfranchising the poor and people of color in America’s inner cities.
First, the healthcare “COOPS” described in this article are not cooperatives at all but have been allowed by the U.S. Government to hijack the name and brand. Consumer-owned and operated healthcare plans are not allowed by law to be cooperatives because they are required to be full-up nonprofits, specifically restricted from any true cooperative structure which would allow for democratic governance in which member-owners decide the distribution of any profits. In stark contrast, the vast majority of America’s 29,000 actual cooperatives hold 350 million co-op memberships, account for $3 trillion in assets, $500 billion in revenue, field more than one million jobs and are for-profit entities.
Second, neither Mr. Abelson nor the New York Times are initially responsible for this mix-up – that distinction belongs to Congressional leaders like former U.S. Senator Ken Conrad, Democrat from North Dakota (1992- 2012), who decided to gain public and political support for these plans by calling them “consumer owned and operated plans” which allowed him to trade on the stellar reputation of his home state’s cooperatives. Subsequent testimony during implementation of the law by Group Health Co-op in Washington State and Health Partners in the Twin Cities opened the eyes of U.S. Department of Health & Human Services (HHS) executives as to what these plans would really look like if they were allowed to become true cooperatives. So instead, when HHS implemented the rules governing these plans, they “encouraged” them to behave like cooperatives even though they weren’t allowed to be structured as such.
Third, innovative pioneers in this field have tried to heal the divide between intent and reality, diligently working to transform consumer owned and operated healthcare plans into a governance structure that reflects true, for-profit cooperatives. Notably, reasons for why consumer-owned and operated healthcare plans (COOPS NOT!) are failing abound and Mr. Abelson’s piece does get that part right (i.e. paying back loans in such an incredibly short period of time), but this is about insurance failure and not the failure of the cooperative business model.
Finally, in addition to gratuitously damaging the real co-op brand, such journalism confusion misses the much bigger story which is connected to growing racial and neighborhood healthcare injustice plaguing our most important cities including New York. In this scenario, connected real estate operators through their investment funds are sneaking onto inner city hospital boards and helping to close them down to then gentrify the properties, leaving healthcare deserts to match the food deserts these communities already face. Progressive unions like SEIU are pushing back with plans to turn existing hospitals into democratic institutions featuring true partnerships to build local living economies through local worker cooperatives to anchor these vital hospitals in thought and deed on behalf of the people they are intended to serve.