24 November 2009

Co-Operative Health Insurance?

In my post Capitalism as a Belief System, I mentioned the idea of using capitalism as a way of running an economy without buying in to capitalism as a belief system.

I think I've already explained what I mean by not buying into capitalism as a belief system: a rejection of the idea that any and every enterprise "should" or "must" be run according to the principle of maximum return per unit of risk. In my previous post, I suggested that the health-care area was one area where I'd personally want to use the Golden Rule as the governing value. I accept that there is much debate about the values surrounding healthcare, but I just want to suggest here a mechanism by which the operating systems of capitalism can be used for more altruistic ends. That mechanism is the co-operative enterprise.

Before anyone feels that they need to enlighten me about the facts, co-operative enterprises are not new nor do I claim to have invented the idea. As businesses, they tend to work very much in the same way as ordinary businesses: investors, a managing board, operations management, employees and customers/clients. The difference between a co-op and a profit-seeking organization is their reason for existing. Almost all for-profits business exist with the ultimate sole goal of maximizing profits. Co-ops exist for the benefit of stakeholders.

Probably one of the most well-known forms of co-operative in the United States are old-fashioned credit unions. You become a member of a credit union, deposit some money in a savings account, and get a return on your money from monies that the credit union lends to other credit union members. In the old days, you couldn't borrow money from a co-op until you had deposited a sum of money for a specified period of time.

What is the point of a credit union? To hopefully provide a service to members whereby: 1) they have access to loans which they would not have otherwise had access to; 2) they have access to a good rate of return on their savings and; 3) they have access to a good borrowing rate on their loans. The primary goal here is not for the credit union to make a profit to reinvest in order to grow and provide shareholders or owners with an ever-increasing earnings stream. The primary goal is to provide a decent, basic savings and loan service to members.

It seems obvious to me that health insurance could be run on similar principles. I know that in California, homeowners who cannot otherwise find home insurance due to a high risk of fire in their area can insure their homes through a type of State insurance which seeks only to cover the costs of claims. On a much more simple level, the Amish operate a system whereby every family puts a sum of money into a "pot" and medical care is paid out of this pot. There are also a couple of medical cost-sharing schemes run by Christians for Christians (which typically require you to sign up to a doctrinal statement!) which aim at members covering the cost of other members.

Will co-operative health insurance solve the current crisis of health-care costs? No, I don't think so. The causes are many and complex but a lot of them can easily be filed under the two basic categories that drive all capital markets: fear and greed. Fear of not having the absolute cutting edge drug or treatment; fear of not having the best possible consumer choice if one has the money to purchase it.

The underlying problem is spiritual, it is a problem of values, as I suggested in my last post. We simply cannot countenance a health-care system that is run for the general good which might limit the ability of the very rich to buy cutting-edge medical care. In money we trust. We are happy to tell the working person that he has no right to a vaccination if he cannot afford it, because what we are absolutely certain of is that the rich person has the right to expensive experimental drugs if she can afford it.


Steve Hayes said...

What you are proposing is, of course, socialism. It has been tried, and has worked fairly well, until people began turning things like building societies into commercial mortgage loan companies, with the disastrous results we have seen in the last couple of years.

Ted M. Gossard said...

Pam, My wife and I agree with you. We've seen firsthand the ridiculous expense (more than 10's of thousands for one couple we know) put on people who are willing to work and do what they can, but sadly don't have good, or the best health, yet still press on. The church helps them, but only so many thousands to throw at them. Other entities too, but still in debt. Something is terribly wrong with this picture.

Doorman-Priest said...

O.K. Is it The American Way? What would it take to change The American Way?

Unknown said...

I am unsure about the co-op health insurance option. I look at what I incurred in bills just since September, not even considering the rest of the year, and my care alone would break a co-op. I think the option works among the young and healthy. Once you get a high cost chronic illness, like cancer, you need coverage that can negotiate costs (not something the present system does well here in the US) and can offer individualized treatment. The latest and greatest? Well, yes, we cancer folk want that. I do accept the argument that only the tested and proven should be covered.

On my cancer listserv, there was a great debate because one drug common in the US now was not offered in the UK or Canada, a very expensive drug which has, according to studies, only a life extension benefit of a few months. Should that be paid for? It's a good question.

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