James Oliphant’s August 20th Los Angeles Times article Healthcare co-ops emerging as viable alternative reports:

One of the six — Democrat Kent Conrad of North Dakota — is the leading Senate proponent of co-ops. He and others point to cooperatives in Seattle and Minnesota that employ doctors and own their own healthcare facilities, giving them more control over costs and the quality of care. Conrad says that under his plan, the federal government would play no role in managing the co-ops, but would only provide seed money to help them get started.

There are two things wrong with this paragraph. First, as Heritage Foundation fellow Ed Haislmaier points out, the Seattle health provider that Conrad cites isn’t even a cooperative:

Even the Group Health Cooperative of Puget Sound, cited by Senator Conrad as an example of a cooperative insurer, is actually organized as a non-profit, the same as a charity, and is not, in fact, a mutual insurer. The one difference between Group Health Cooperative and other non-profit health insurers, such as Kaiser Permanente, is that Group Health Cooperative includes in its bylaws provisions allowing policyholders to apply to become members and then grants those “members” voting rights on certain governance issues, such as the election of directors. However, Group Health Cooperative’s policyholders do not have ownership rights in the company as in the way the policyholder owners of, say, Northwestern Mutual Life.

The second problem is Conrad’s insistence that co-ops receive seed money from the federal government. Co-ops have a long and proud tradition in the Untied States including Land O’Lakes, Ocean Spray, and Blue Diamond Growers. They even exist in the insurance sector: companies such as Mutual of Omaha and Northwestern Mutual Life are in fact cooperatives. But none of these entities were chartered by the federal governemnt and none of them received their start up capital from the feds either.

The Los Angeles Times readers dereve to know what co-ops are and that what Conrad is peddling does not fit that definition.