Looking at our neighbors as the health care debate continues on

On October 6th, 2009 the Center for Science in Public Policy at the Hudson Institute held a panel discussion on the concept of Health Cooperatives. A uniting issue with health cooperatives is the public’s lack of familiarity and understanding of the concept. To give perspective on the U.S health care plan, Jerry Norris opened the conference by giving examples of cooperatives abroad.

In the 1920s, mutual aid societies or cooperatives were formed in Japan to organize healthcare services for agricultural workers. After WWII, the U.S. Occupation authorities used the cooperative model to design what is now known as Japan’s National Health Insurance System. In the late 1970s, USAID helped South Korea to reform its healthcare program. Cooperative principles were again used in the design of demonstration projects. Subsequently, South Korea followed the Japanese model and promoted a national health insurance program which now covers almost 90% of its population.

One of the largest health cooperatives in the world is in Brazil and is called UNIMED. UNIMED has approximately 18 million members across the country and provides a comprehensive set of health services ranging from primary to tertiary care on a prepaid basis. The urban health cooperative in Sao Paulo covered some 6 million of the city’s poorest citizens and with roots in the public sector, it’s private sector metamorphosis provides an interesting contrast and context to the current US healthcare debate.

In 1998, a new Secretary of Health was appointed by the Mayor of Sao Paulo. The Secretary was an engineer with no experience in health. The Secretary concluded that any reform he instituted could not be worse than the existing public system. He made an offer that the public physicians could not refuse—go private with cooperatives: “I will pay you three times what you now earn; you can elect your own presidents for each cooperative; you will have the sole authority to hire and fire all personnel; and you can do your own procurements, but in return for this, I want only one concession from you, you will have to work.”

Over a period four months, staff from Harvard Medical School evaluated this urban cooperative in Sao Paul and confirmed that it did provide a level of services which equaled anything that could be found in the private sector and that these services were being provided at no greater cost than if all the cooperative members were still covered by public finance.

While the conference went on to discuss health cooperative viability in the U.S, it is through these stories that the public can gain a better idea of the history health cooperatives have had throughout the world. The example of cooperatives created in Brazil are particularly interesting because it shows the opposite transition to what many would like to see happen in the United States.

As many Americans are unfamiliar with the concept of health cooperatives it is helpful to look at our neighbors and draw on others experiences. No one country’s healthcare system is perfect, but in the quest for reform, it is important to look at all different models and experiences.

To read more about health cooperative conference and their viability as an alternative to the public plan, go to: http://www.hudson.org/index.cfm?fuseaction=hudson_upcoming_events&id=716

-Kacie Marano
Hudson Insitute
Center for Science in Public Policy