For Co-Ops to Work It Takes Too Many Perfect Maybe’s

Tuesday, July 28, 2009 12:00
Posted in category Venting
<div class=\"postavatar\">For Co-Ops to Work It Takes Too Many Perfect Maybe's</div>

Post written by Rick Doyle

For Co-Ops to Work It Takes Too Many Perfect Maybe’s

No matter whether you lean right or left think we can all agree that the Stimulus Plan was a bad idea.  The Cap and Trade a worse idea and to leave the H1N1 in the US unchecked teeters on the brink of lunacy.  Insurance reform using Co-Ops has to be the ultimate idiot move and blindside to Americans.  If you are not familiar with Co-Ops there is a good reason; they rarely, if ever, work because it takes the several precise mechanisms to make them a success.  There is an endless stream of maybe’s that have to happen to pull off a Co-Op that is fair and actually works. 

The principle idea of how a Co-Op works is that a bunch of small time buyers get together and convince (that’s one major key) a supplier(s) that they can purchase and unload at bulk rate pricing in one location more profitably than the supplier can receive through smaller sales spread out.  The Co-Op is essentially trying to act like a bigger buyer to entice bulk sellers to give better pricing and that is handed down to the individuals through collective buying power.  Somewhat like comparing Wal-Mart to a small corner shop.  Since the small store can only handle a handful of buyers they don’t purchase nearly the quantity that a Wal-Mart does because they would never be able to sell it all so they don’t get the bulk buying rates that large chains do.  There are just a few problems with this when it comes to health care.

First you need two primary ingredients, buyers and suppliers. What makes a Co-Op worthwhile is the presumption that you have enough buyers in one area to create a large enough demand to justify central distributorship.  Plus you have to be able to make enough profit on that supply to that Co-Op to make it worth the supplier’s time, effort and attention to even want to supply a smaller population that wants to buy like a large population.  The biggest flaw with that is that those of us who don’t work for a large company, are self employed or currently unemployed have to buy our own health care.  For an example we’ll use round numbers for a decent insurance policy.  The Government says $25,000 is a luxury or high end policy and $5,000 won’t get you a decent Band-Aid so let’s use the average of $10,000 annual premium for a family of 4.  A rural county usually has one hospital, a very limited number of physicians and most certainly nowhere near the number of specialists required to cover all bases.  50-75 miles away is a city with thousands of Doctors, at least a dozen hospitals and many services Rural County couldn’t afford no matter how big the stimulus becomes.  Where do the lines of service and the Co-Op services to the population it serves start and stop?  If my family is paying into Rural County Co-Op and there are no providers in my County for what ails me would I be able to get help in a County that I didn’t pay into to get the care I need?  No, most definitely not.  Co-Ops ONLY serve their members.

Here is the next hurdle.  When Ohio deregulated utilities it was under the guise that it was going to create healthy competition and many energy suppliers would come to compete for our business and it would lower rates, improve service, blah, blah, blah.  Guess what happened?  No one showed up for the party!  The exsisting energy suppliers made it so complex or so complicated that the supplier in power who owned the lines, pipe or cable simply made it too costly to compete.  So most of us who live in rural areas have a single provider for phone, water and electric with no competitors to choose from plus they’ve all tacked on a 3 fold plus increase in cost since deregulation.  The suppliers have also figured out that if you need insurance and are paying $10,000 annual premium, why would they want to come in and sell you the same insurance for only $5,000 when they know you have to have it?  They are not going to pick up anyone new and if you can’t pay why would they lower anyone else’s current fees thus lowering their profit?  They don’t have to compete so why would they even consider it?  The Co-Op must also have enough suppliers of services and the Insurance to make it worth your while.  Many people in rural areas go to nearby cities thus taking the strain off of the local system.  The services are better, there are more specialists, better care and what is left get served locally though typically, not as well.  Doctors who don’t want to be poor or live in poor rural communities and have poor facilities who are just out of school or are specialized are not going to go to the rural Co-Ops to get paid less when they can go to larger cities and facilities that can afford and provide more.  It’s the same story with rural electric being the last to get restored in the country.  Just as the phones and internet service are neglected, outdated equipment so will the quality of care we would get.  So we drive further distances in order to receive better services and treatment.  Co-Ops would end all that.

Next, Co-Ops supply what they can sell so they are supply and demand based.  Which is fine except for one problem; it changes with average age of population, employment, natural disasters and so many factors that a county or large group shift can disproportionately change the serviceability so drastically that you could find entire counties wiped out in a blink.  Let me give you a few examples.  A city with a population of 1 million gets hit with a plant closing and 5,000 people lose their jobs.  Not a big deal in a city that size.  However, take a rural County with a population of 20,000 and that same 5,000 is a 25% change overnight. A tornado hits a small town versus a big city, or flooding or any natural disaster, services and funding go to the largest populated areas first.  The smaller Co-Ops are at the very bottom of the list.  We see it now with utilities, infrastructure, cable and phone.  When we have bad storms the electric is out to 100,000 customers in Cincinnati while there are only 5,000 rural customers (with no power) and even though it’s Duke energy the Cincinnati customers are up in 1 to 5 days whereas the rural services can be weeks.  It certainly doesn’t seem fair to make the farmers who feed them wait but that’s the way of the world.  And health care is no different; those in the smaller population get served last. Resources have to be allotted.  Flu shots, vaccines, medicine and who controls the flow of care and approval of care and resources would be government controlled.  The individual will lose all rights to exercise options they used to have.  Co-Ops work where there is no choice and a supplier can get business he wouldn’t normally get.  So who in their right mind would supply people at a discount when they have to get it anyway, then charge the poorer Co-Ops the same as what the larger ones are paying while the larger Co-Ops get all the priority?

These are just some of the overwhelming number of maybe’s that are terribly flawed which makes the Co-Op proposal so far away from working that it’s ridiculous.   It’s also like the cash for clunkers program.  It was great in theory for a few like the automakers or car dealers, maybe 250,000 out of 300 Million people, but for the 299,750,000 who paid for their neighbor to drive a new car from a portion of their taxes…not so good!  These are the same idiots who approved that program which was supposed to last for 4 months but lasted less than a week.  They did a great job estimating supply and demand but then underfunded and miscalculated it so badly it managed to sell a whole 12 extra cars per dealer higher than normal. I am really glad to know that not only did I get to pay for my neighbor’s car I also got nothing out of it for myself or my family except higher taxes. Obama says this is so great he wants to fund it with $2 Billion more so I can pay even higher taxes and pay for 750,000 people to benefit out of 300 Million, just not my family.  These are the same idiots that are putting together health care so the outcome will be one of three results. First, whatever they say it will cost you’ll need to multiply it times three in order to get a more realistic number.  Second, it will only serve a tiny minority well while the vast majority will pay but gain nothing from it. Third, if you don’t speak up and threaten to vote out the morons who have yet to spend a dime sensibly under the Obama administration and have increased the national debt to over $23,000,000,000,000.00 (yes that is Trillion) putting us on the verge of total collapse you only have yourself to blame when you are standing in a bread line or your children or family die while waiting in a line to be seen by a doctor.  The Republicans put forth an Amendment that requires the Government folks to use the same health care that the average Joe would use, however the Dems voted that down in a flat second.  So they think that Co-Op health care is just fine for us but not nearly good enough for them.  What does that tell you about Co-Op health care?   Do you really want to let these people keep running the country?  If you don’t stand up and say something now when they finally tax, regulate, legislate and castrate all signs of democracy, capitalism and freedoms out of our country and economy you will be living in the new China and the New United States of Socialist and Communist Reform will be what people will call us.  That is, if you survive the national bankruptcy, poverty, economic collapse and starvation.  No problem, some people will have a new car.  Call me alarmist but in case you didn’t know foreign countries like China own almost all of the USA and holds ALL of our debt. What do you think will happen when we indebt ourselves to the point where we can’t pay the interest or payments because Obama and company printed so much money for impractical and worthless projects that our money has ZERO value?  The Debt collectors will come knocking with their own rules.

With Co-Ops there are too many maybe’s that have to come into play simultaneously that it’s beyond my understanding why the power hungry Democrat lead Congress and Senate do not just tackle one fixable problem at a time and make a reasonable collective change to healthcare.  Sweeping reform as history shows has almost always backfired.  Reduce costs to health care with a national data base and no more paper records.  Yeah! There’s 10-15% reduction to everyone.  Set malpractice limits and Tort reform and lower Doctor’s malpractice costs.  There’s another 20% reduction.  Set margin limits or lower profits, set caps for medical manufacturing and/or create a cost benefit for medical supplies and equipment so that companies and hospitals, not  Doctors, are able to upgrade and charge less because they are not funding profit or excessive margins for manufacturers.  Do the same for insurance companies and drug manufacturers.  Put research in the hands of publicly traded or government funded programs and reduce the number of wasted competing companies so that more goes to a smaller pool but better funding results in better savings.  There are dozens of simple ideas well thought out that, taken one at a time and implemented reasonably quickly will create the reform and savings everyone wants.

Just a side note/observation, doesn’t it seem a bit bizarre that King Obama can spend 6 months picking out a “first family” dog but he wants us to buy without question a total revision of  US health care in 3-4 weeks.

Your thoughts and comments are always welcome, don’t forget to send them or call them into your Congressman or Senator too, before it is too late!

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15 Responses to “For Co-Ops to Work It Takes Too Many Perfect Maybe’s”

  1. Deshawn Swatzell says:

    July 23rd, 2010 at 9:49 am

    An excellent article, I indisputably consider your point of view. Great percentage

  2. Lazaro says:

    July 13th, 2010 at 1:49 pm

    Good site!

  3. Shelli says:

    July 12th, 2010 at 3:20 pm

    This post is great.

  4. Arganbright45 says:

    June 26th, 2010 at 2:08 pm

    Aw, this was a extremely high quality post. In theory I’d like to write like this as well – taking time and actual effort to make a very good article… but what can I say… I procrastinate alot and in no way glimpse for getting something done.

  5. Arvanitis says:

    June 15th, 2010 at 7:14 am

    Wonderful to read!

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