KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Seattle-area Health Co-Op Offers Alternative Health System Model

Innovations in care by a Seattle-area cooperative and clinic are shaping debate about what health care reform around America should look like, The New York Times reports.

Group Health Cooperative of Puget Sound, "one of the country's few surviving health insurance cooperatives," allows doctors to use collaborative medicine and electronic records to practice proactive medicine. The innovations could prove to be an example to lawmakers trying to compromise on health reform, the Times reports.

"After a month of brainstorming, including briefings from Group Health executives, the Senate Finance Committee seems poised to propose private-sector insurance cooperatives - instead of a new government health plan - as its primary mechanism for stoking competition and slowing the growth of medical costs. But state officials say Group Health's impact on holding down costs has been mixed. And its successes may have less to do with its governance - by a board that is elected by patients - than with its ownership of a vast network of clinics and specialty care centers."

The Times continues: "Above all, Group Health's physicians are paid a salary and can earn bonuses of up to 20 percent for high-quality performance. Unlike most doctors, who are paid by the visit or procedure, they have little incentive to churn patients through and order unnecessary tests and operations." The cooperative idea is being proposed by Senate Finance Committee member Sen. Kent Conrad, D-N.D., but could spark a showdown with the Senate Health, Education, Labor and Pensions Committee, which may include a different, government-run public plan in its legislation (Sack, 7/6).

Other Seattle doctors, in the meantime, have raised $4 million more in private money to expand a clinic in that city, Reuters reports.

"Qliance says it has a profit-making solution to the problems of long waits, rushed doctors and cursory care that bother patients, at the same time that it eliminates the paperwork and pressure that plague primary care doctors." In total, $7.5 million has been raised for the clinic.

"Co-founder Norm Wu said per-patient revenue is triple that of insurance-based clinics. He said many costs are fixed so the firm, now losing money, will turn to profit as business grows. More than 50 noninsurance clinics operate in 18 U.S. states, based on different business models, Wu noted.

"The backers believe Qliance can grow very profitable, and the clinic uses stock options to attract new doctors. … Qliance says it is a private alternative to the failures of insurance, which have made health care President Obama's top legislative priority in Congress, with a price tag of $1 trillion or more" (Lawsky, 7/7).

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