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Paul Hazen is President & CEO of the National Cooperative Business Association


Cooperative Health Care
The co-op business model can help address health care issues

The health care proposal released in August by the Senate Finance Committee includes an option to offer health insurance through cooperatives but leaves many questions about their structure and scope undefined. The National Cooperative Business Association (NCBA), the only national membership association for co-ops across all industries, supports the use of co-ops to address the U.S.’s health care needs. But NCBA seeks to ensure that any proposal strongly complies with long-established cooperative principles and protects consumers.

Paramount to the definition of a cooperative is membership control. A co-op is owned and governed by its members. Its primary mission is to provide quality goods and services rather than to maximize profits for shareholders. Savings at co-ops are generally returned to members.

Cooperative members democratically elect board members and participate in a transparent exchange of information with the board.

Although cooperatives are traditionally funded by member equity, any national health insurance cooperative will need a strong government investment. Inadequate funds for a health care co-op’s development will leave it financially vulnerable. As history has shown, government-assisted co-ops have been able to fully pay back the government.

The cooperative business model has entered the health care debates because co-ops can save money for members by aggregating demand for specific services, whether it’s health insurance, pharmaceuticals or hospital supplies. For example, in a health insurance purchasing cooperative, consumers or businesses can band together to purchase private health insurance policies in bulk, passing savings along to members. Cooperative health care providers also save money for members because, in addition to buying in bulk, the not-for-profit cooperative does not answer to outside investors.

October is Co-op Month

Each October we celebrate Co-op Month. Cooperatives are already involved in health care and so much more. A recent study by the University of Wisconsin found that cooperative businesses account for more than $650 billion in revenue and 2 million American jobs.

Approved and distributed by USDA, the Research on the Economic Impact of Cooperatives, conducted by the University of Wisconsin’s Center for Cooperatives, is the result of several years worth of studies and surveys.

The results confirm what cooperative leaders and members have known all along — their businesses are part of a greater national movement that drives the American economy. There are 29,000 cooperatives in the U.S., in virtually every industry. The data shows their wide-ranging impact, from the new sector of biofuels cooperative, to mammoth sectors like farmer supply, credit unions and marketing cooperatives.

But co-ops have another advantage, often not reflected in revenue or jobs created. Cooperatives share a set of values that drive their operations and how they operate within their communities. Honesty, openness, caring for others and social responsibility are values all cooperatives demonstrate through their practices and procedures.

As member-controlled enterprises, co-ops are run largely by the people who live and work in the communities they serve. That gives them a different perspective from businesses owned by distant investors.

At a time when our economy is struggling, it’s important to remember that tens of thousands of cooperatively owned businesses are focused on their members, not just profit. Sure, investor-owned businesses have a set of values too. But for co-ops it’s more personal. It’s a critical part of what drives our actions, making us a more integral part of our communities than most other businesses.

For more information about health care cooperatives, visit NCBA’s Web site, There’s a link to the Wisconsin study on the front page, and the “about cooperatives” page has detailed information about health care co-ops.

Paul Hazen is President & CEO of the National Cooperative Business Association, the leading cooperative membership association in the United States –

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