Health Care Cooperatives--Not Good Enough Mr. President

President Obama is from a big town. In a town like Chicago, big and cosmopolitan, the idea of health cooperatives meeting the public need for health care might look sane. President Obama is already on record as having said as much.

The Senate Finance Committee, where this health care plan for cooperatives is rooted, basically shows how completely out of touch with the needs of the average American the Senate has become. The Senate is made of millionaires. Even if one happened to land out of their mother's womb in a small town to begin with it is obvious they have no memory of it now. Perhaps, given this scheme, they may have landed on their heads. Why else would Congress promote a design which essentially leaves the insurance industry still in power over the public's health care needs. The idea of nonprofit health care cooperatives serving the public need is a shell game. It is a cloak over the public's eyes at the behest of the insurance company profiteers and the medical elite.

I say don't play the game and don't believe it. This "option" is not an alternative to the public option or the single payer system. It is a way for the insurance and private health company executives to retain control of the health care market and have it their way.

Here's why.

First and foremost any nonprofit, especially a membership based nonprofit, is like driving a bus. Whereas a private forprofit business is a zippy little red sports car. Well funded private business, like you find in the insurance and health industry, goes even further and resembles the famed Italian Maserati. They are sleek organizations, designed to hug the road, expensive, and represent loads of capital (cash).

President Obama has said he feels that the nonprofit cooperatives should have to compete for that capital. I like President Obama and empathize the heft of his burden but he is more the attorney and politician here and less the nonprofit business man.

In a nonprofit cooperative there is a board of directors. This board, although there are no definitive guidelines put out yet, most likely will be elected by the members of the cooperative. There are specific regulations which provide the directors with the structure for governance in a nonprofit. These have distinct differences compared to a forprofit organization.

The people who run for nonprofit board positions will be similar to the same people who run for local school boards and housing cooperatives. In private corporate business the board of directors are appointed more often than not. Directors receive nice annual stipends, pay, and perks for giving advice in their special areas of expertise or using their influence to get favorable legislation. It is a nice job in the forprofit world and someone wealthy with clout and experience lands the role and holds onto it--until death, or dementia, do us part. Meanwhile, back at the nonprofit, the assets of the nonprofit belong to the public and therefore the public representatives are assigned to watch over those assets on behalf of the membership of the cooperative. How many board directors, what regional representations might be assigned, how long their term of service, all has to be established in the nonprofit charter. Any remuneration will likely be limited and contained to expenses incurred while being a public community servant.

In this spirit, allow me to metaphorically introduce you, the person needing health insurance reform, to your new bus driver--your neighbor Joe the Plumber. Or perhaps Suzy the Secretary, Gary the Mechanic, Jenny the Accountant, and/or Carol the Hairdresser.

Basically the cooperative board of directors will be made up of people from your cooperative's community.

Now if you live in the community of Chicago the pool of potential nonprofit board candidates is bigger. The select educated elite and various professional backgrounds are naturally more diverse and better candidates can be drawn upon to serve. Your Chicago Cooperative might end up with Karen the Physician and Sam the Surgical Nurse for example. These options would, presumably, be better trained leadership for a health care cooperative. Lucky you--the Public Citizen.

At least for a while.

Then Karen and Sam's term of service will be up and new board members will come on. New board members who have never driven this particular bus before. New board members unfamiliar with the history of the bus, the patients riding the bus, and the mechanic's tinkering with the bus. Never having stuck their heads under the engine of the bus and never having kicked the tires of the bus these new board members will be seated. Not to mention these new board members, "drivers of the bus", will even have to become familiar with what road the bus is going down.

And there are a lot of bumps, cracks, and potholes in the road.

This, Public Citizen to whom I write, is who will be in charge of your health care in lieu of the government. A gamble at best. A tragedy in the making at worst. Because (play close attention to where the pea lands underneath the shell) while nonprofit cooperatives may be designed to be in lieu of the government being in charge of your health care they are not in lieu of the insurance company executives remaining in power. They, the insurance executives, are just scurrying under the new shell Congress has designed to maintain the status quo for the elites.

In the meantime, the insurance company executive will be driving on ahead of the bus, happy in the newly lightened and speedy Maserati. A few small tow lines attached to the Public Citizen bus at the initial camera-op, all for show, without any long lasting effects for the Maserati driver.

In fact, is that a smile I see on the Maserati driver's face?

Of course it is, since the Public Citizen bus will be full of riders that the insurance company executives don't want in their zippy little sport car. Public Citizens add weight and cost money in gas and repairs. Plus, the evil public riders tend to complain when they get dumped out on their heads in the middle of the road. It will take a little more conniving to get around President Obama's legislation on patient dumping--but with the Senate Blue Dogs on their side, no problem. So onto the bus with you!

A private forprofit organization can make quick stealth-like decisions. It can plan a long time in advance since it has a relatively stable market. It can control, to a great degree, how much supply it wants to give in order to meet demand. The forprofit insurance company is going to set, because it can and the industry is allowed to collude, how much profit it wants to put in the hands of its executives and investors. And the profiteering will always come first because that is what the company is designed to do, and it is what the executives get paid the big bucks for... doing what is best for the company.

Is there a great new technology on the market people are dying to pay for? Great let's adopt it and charge a 200% markup. Better yet let's buy up that company and roll it into our portfolio! Full speed ahead. The zippy little red Maserati doesn't even slow down for the turns or the bumps in the road--it generates enough money to negotiate successfully all the curves and bends in the road. And when it needs repairs it just charges anyone riding along more money.

Ah, the perfect life. Neck scarf blowing in the breeze and the Senate pumping gas into the tank.

Meanwhile, the Public Citizen bus is back here trying to figure out which way to turn next. The driver has stopped and is waiting to hear from all the passengers (members). The driver has to unfasten his seat belt and walk up and down the aisles of the bus to get every rider's ideas and thoughts on which way to go next. Then there is the time spent to show that process is being done and to take these thoughts into consideration. Next compare the new ideas with the old map, explain to everyone why that might be the wrong way to go, get the board to draw a new line on the map, and then finally he can get back in the driver's seat and go forward to make the turn in the road ahead.

Needless to say, if Public Citizen, wants to get anywhere soon he or she isn't going to get there quickly by riding that nonprofit cooperative health care bus.

Could you buy a better bus or a better trained driver or mechanic? Not likely. The nonprofit will never be able to, without the government's backing, outbid the private forprofit competition for the best doctor's, nurses, administrators, and technology. Even if the, ever-changing, board can get it together to understand the strategic need and are willing to work, being semi-paid, full time to raise capital. The forprofit insurance industry will have every reason to work around any regulations and to take shortcuts to ensure it stays ahead of the bus. Effectively undercutting any strategic advantage the nonprofit cooperatives may develop.

Just ask Fannie and Freddie--they essentially got into competition with the for-profit mortgage sector. It is a slippery slope leading to the eventual abyss.

Yet some buses might be better than others--true. Big polished city buses might have bigger gas tanks and better drivers than rural or small city ones--but they still will never be able to catch up to that tasty little red Maserati ahead. There are individual health care nonprofits that are bound to be rolled out as examples. An individual does not an industry make. Overall if the bus breaks down along the way and needs more gas, private gas stations are going to give their best supply to the Maserati owner because the Maserati owner obviously can always pay more. The Public Citizen will get the dregs of the tank and the mechanics straight from medical skid row. Running on dregs never makes for a good ride--for anyone.

Even more poetically or poignantly, however you want to look at it, the Maserati driver will get to dine at the White House with all the Senators long before the Public Citizen bus limps in. All the prime rib, shrimp, and organic greens will long be gone. Congress and the Maserati driver will be snuggled into the study smoking a few handrolled cigars and sipping cognac by the time the bus pulls in. In fact, the Maserati drivers may even, if they are clever enough, be able to arrange it so that the Public Citizen gets to the White House just in time to done a servant's outfit and wait upon the Blue Dog Senators and Maserati drivers in their cloistered study.

Guess who will get the bill.

Finally, after every one else has left, pockets stuffed full of goodies for the drive home, the Public Citizens can pick at the crumbs spilt on their uniforms before heading home to wait for that call from the Grim Reaper.

Yes, Virginia, this is a class war and Santa Claus doesn't really visit the little people in America any more. Not even for Show and Tell.

Let's just hope President Obama is playing chess with Congress rather than MouseTrap.