Nonprofit Healthcare Co-ops Fail


Here is another reason why the government should not take over our healthcare system totally (they are already screwing up Medicare, Medicaid, and the VA).  According to this Boston Globe article, 22 out of 23 nonprofit co-ops are buried in debt.  These co-ops were created by the Democrats to compete with the big insurers and were supposed to be an alternative to both publicly funded health care and single-payer health care. So, to be clear, these co-ops are kind of hybrids and not fully government run.  But guess what?  They suck.  And why do they suck?  Well, for one, it cost $2.4 billion in taxpayer-financed loans to help create these things. But here is my favorite part of the the article:

The Massachusetts co-op spent more than six times more on administrative expenses than it collected in premiums.

Six times more on administrative expenses!!  Once again, that is where the money is going in healthcare.  It is a common complaint that I make often in this blog.  Even funnier, as recently as the spring, the White House touted co-ops as an accomplishment.  What? The government lied?  Yup.

They say the only certainty in life is death and taxes.  Well, the only certainty is healthcare care is administrative costs and government screw-ups.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  3 comments for “Nonprofit Healthcare Co-ops Fail

  1. Ben Van Raalte
    August 9, 2015 at 10:39 pm

    In Iowa the first one already failed. But better than that, all the payments are being denied.
    I did a septoplasty. The practice had signed up for the plan to help these individuals even though it pays not so well. Had it preapproved and the Coop said no preauth needed. Gave them the name and plan number. We confirmed again prior to surgery that insurance was in place.
    6 months later they deny payment, stating the member had a subtype of the plan and we were not in it. We never heard of that subtype, we called the number on the card, confirmed we are in the coop and the procedure was ok, and reconfirmed, never did they say the member was a subtype and could only go to providers in that subtype (unsure if there are any). Now the patient is mad and thinks it is our fault and refuses to pay.
    Luckily there were no complications (which of course occur in 5% of surgeries) or a lawyer would be demanding we pay him and the hospital for his surgery.
    Record hospital administrator salaries, record drug prices, and now my own insurance costs 20k a year (another 10% tax for me). Only a few years until the entire system collapses.

  2. Steve O'
    August 9, 2015 at 12:10 pm

    Perhaps they should order the doctors back to traditional medicine, what with bleeding and leeches and whatnot. Sprinkle in some Hand Massage Therapy for breast cancer, and Light Frequency Irradiation for stroke, and the budget will balance up pronto!

  3. Randy
    August 9, 2015 at 8:28 am

    Although the government was certainly wrong about the co-ops, this will be spun as a reason for more government control of health care, not less.

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