Health Reform:

Purchasing Cooperatives Have an Increasing Role in Providing Access to Insurance

T-HEHS-94-196: Published: Jun 30, 1994. Publicly Released: Jun 30, 1994.

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GAO discussed health insurance purchasing cooperatives, focusing on: (1) the operation, authority, and accountability of existing cooperatives; and (2) issues that could make such cooperatives a more important part of the health care environment. GAO noted that: (1) common administrative functions among purchasing cooperatives include enrollment, premium collection, and contracting with health plans; (2) the cooperatives' broad policy functions include defining benefits packages, analyzing individual health plans, negotiating premium contracts, and analyzing quality data; (3) cooperatives' operating costs range from less than one percent for large, mature cooperatives to about 3 percent for smaller or new ones; and (4) most cooperatives contract for enrollment and premium collection activities and their relatively small in-house staffs concentrate on management and policy functions.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: This recommendation was made in June 1994 testimony when the 103rd Congress was considering a number of national health care reform bills that incorporated the concept of "health purchasing cooperatives." It is now widely acknowledged that broad reform is off the national radar scope for the foreseeable future. Rather, more modest changes, at the margins, are currently being considered. No reform bills incorporating purchasing cooperatives have been introduced during the 104th Congress. Given the current political climate it would appear reasonable to close out this recommendation.

    Matter: If cooperatives become a national vehicle for expanding insurance coverage, Congress may wish to consider giving greater attention to the selection, composition, and accountability of cooperative governing boards.


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