WASHINGTON_The Obama administration has signaled that it might accept health care cooperatives instead of a government-run health insurance program to compete with private insurers.

Interest groups disagree on whether such co-ops would have enough negotiating clout to help consumers without threatening private insurance companies. Here, in question and answer form, is a look at the issue based on interviews with several authorities, including the chief proponent of health co-ops, Sen. Kent Conrad, D-N.D.

Q: How would a health care co-op work?

A: As a nonprofit, member-owned group, it would assemble a network of health care providers and negotiate payment rates with them.

Q: How many co-ops would there be, and how many members would each have?

A: There are no set numbers. Co-ops could operate on state, regional or national levels. Conrad says each would need at least 500,000 members to succeed.

Q: How would a co-op affect me?

A: Membership would be voluntary. Consumers would decide whether a co-op's costs, coverage, provider networks and other features are superior to those of private plans.

Q: How could a co-op offer a better alternative?

A: Co-ops presumably would reduce or eliminate some costs, including profits, to compete effectively with private insurers.

Q: Would that drive insurance companies out of business?

A: Unclear. Proponents say co-ops would force private insurers to be more efficient and fair, but the co-ops would not have enough advantages to threaten good companies.


Q: Would co-ops have enough collective bargaining power to demand good rates from providers?

A: Some experts say co-ops would need a nationwide board to negotiate such rates on behalf of all co-ops, rather than have each group bargain on its own. Others say a nationwide board is not essential. Conrad's Senate proposal has yet to decide the matter.

Q: What is the history of health care co-ops in America?

A: Very uneven. Many have failed over the decades because they were unable to compete effectively or because tensions between doctors and consumer-oriented governing boards could not be resolved. But some, including a co-op in Washington state, have operated successfully.

Q: What would be the federal government's role?

A: The government would provide up to $6 billion to get co-ops started. After a few years it would turn over all operations to the co-ops' governing boards, and the co-ops would become self-sustaining. Conrad has yet to say whether co-ops should be required to repay some of the federal money.

Q: What are the biggest complaints about health care co-ops?

A: Critics on the left say they would be weaker than a government-run insurance plan and therefore unable to really compete with private insurers. Critics on the right say taxpayers and politicians might be too invested in co-ops to ever agree to eliminate the government's role in them.

Q: Would co-ops significantly improve the nation's health care system?

A: Perhaps. But even Conrad says other factors are more important in trying to control costs and improve quality. They include changing incentive formulas to reward providers for good outcomes rather than the quantity of procedures and tests, he says.