How Health Co-Ops Could Work (But Not Under Sen. Conrad's Proposal)

Whenever I've heard anyone talk about co-ops as a healthcare solution, All I've thought about is the weak-kneed, jelly-boned model advocated by Sen. Kent Conrad (D-N.D) that really does nothing to achieve real healthcare reform.
Here's an interesting post that shows how co-ops could work even in the most ideal conditions.
According to the piece by The bagofhealthandpolitics, who has written some excellent stuff on health care reform in a number of blogs:

If the health care reform bill creates an insurance exchange with minimum standards for benefits, payments, and (most importantly) medical losses, who administers the plan is basically irrelevant. Controlling artificial manipulation of the insurance industry's medical loss ratio is important because it would prevent many of the outrageous abuses which currently plague our system.

The piece continues:

HR 3200 would essentially end artificial manipulation of the medical loss ratio in order to make a quick buck and please investors. HR 3200 includes a provision which requires all insurers on the national insurance exchange to meet a minimum medical loss ratio. This provision would provide teeth to the bill's prohibition of discrimination against Americans with pre-existing conditions, and the bill's ban on the absurd practice of rescission. If a public option, or even a national non-profit co-op, is abiding by a minimum medical loss ratio, which can't be arbitrarily altered to beat Wall Street's expectations by throwing cancer patients on the street, health care reform will work very well.
If we put patients before profits, we will have better outcomes and spend less money. Over time, a reduction in health care costs will make us more competitive with the Europeans when it comes to manufacturing goods.
The resulting system would be a hybrid of the Dutch and German systems. Like the health care system in Holland, there would still be for-profit insurers. However, the existence of a private, non-profit co-op which has to follow the payment schedule and medical loss ratio negotiated by the HHS Secretary would add a bit of the German system to create a uniquely American mixing pot health insurance system. In Germany, a large contingent of private, not-for-profit insurers administer a health insurance framework which is set by the federal government.

I couldn't agree more with the author's conclusion:

A co-op that operates under a national framework can be successful. This non-profit model is successful in many western European countries. But it is not the lame, state-based co-ops of Kent Conrad's dreams; Conrad's state-base co-ops wouldn't have a large enough pool to alter the market, reduce costs and increase access. The end game is upon us, but for our side to be successful, we need the House to pass a strong bill with stringent regulations on the insurance industry and a strong public option, administered by the federal government. That's why you should call your congressperson and tell them to support HR 3200.

Absolutely. Keep even the progressives' feet under the fire until real healthcare reform with a robust public option is passed.