One of the provisions of the Affordable HealthCare Act (ACA) is the establishment of Co Ops (Consumer operated and oriented plan) via loans from CMS. These Co Ops will be designed as a not for profit and transparent organization who can negotiate directly with hospitals and providers for rates without the burden of shareholders.
Mike Capnano (D-Mass) said in a statement, “The ACA encourages innovation in the structure and goverence of health plans, as hospitals and providers seek to control cost and improve quality of health care.”
Minuteman Health is the first such organization to stat-up using a $88 million loan from CMS. Vanguard Health System, Tufts Medical Center and its New England Quality Care Alliance Physician Group have aligned to form the CO OP Minutemen Health.
Since CO Ops aren’t beholden to shareholders, they can freely build their companies from the ground up while engaging members and re-aligning provider reimbursements.
One of the CO Ops keys to success is securing low hospital prices. But that will be dependent upon high volumes of patients which as a startup company can’t be guaranteed. Obviously high concentrations of population and hospitals and providers, i.e. the northeast is a target area for CO Ops, but also states like Montana and surrounding states have a similar plan.
“if CO Ops price their products right and get significant market share through the exchange, we will through our practices force the market to change” says John Morrison, President of National Alliance of State Health CO Ops.
While CO OPs are now in the health insurance market place….large insurance groups like Aetna, Cigna, United Health and the Blues are opting out of exchanges in some states. They simply cannot meet exchange guidelines and meet shareholder demands for profits.
2 Weeks before Oct 1 and some 27 states have opted out of exchanges and also decided not to opt in to new MCD plan. What happens in the next 2 weeks may well set the stage for success or failure of the ACA.
For many practices and hospitals however, Oct 1 will come and go with business as usual.