Whether or not more co-ops falter, many insurers could learn from some of their goals and experiments, including in primary care.
The ACA co-op program was born out of deep public frustration with health insurance.
Like other ACA-backed co-ops, the poster child of their financial challenges, CoOportunity Health of Iowa and Nebraska, was founded on the notion that health insurers generally were not serving Americans well and that not-for-profit Blues specifically had "strayed from their mission," as CoOportunity CEO Cliff Gold said last spring.
Gold spent 30 years with Wellmark Blue Cross and Blue Shield, the largest insurer in Iowa and South Dakota, and rose to the role of marketing vice president. He retired to San Diego in his late 50s and launched his own consultancy, Cliff's Edge Strategies.
He was playing golf one day when an old Wellmark client, David Lyons, a former Iowa Farm Bureau Federation officer, called with a pitch to start a new cooperative plan under the ACA. Gold was in, drawn to the goal of "reinventing nonprofit health insurance."
Three years later, after garnering more than 120,000 members, CoOportunity was taken into state-ordered liquidation. The co-op found itself in a financial death spiral, with high acuity membership particularly in Iowa, where the state allowed pre-ACA plans to be renewed, and an unexpected half-year's delay in federal risk adjustment, risk corridors and reinsurance payments.
Enough to scale?
From the perspective at the other end of the insurance market -- Aetna CEO Mark Bertolini -- CoOportunity won't be the last co-op to go bust. "We believe that the recent failure in Iowa and Nebraska is a precedent kind of transaction," Bertolini said recently. CoOportunity, he argued, "probably is not the first and also not the last of these co-ops to have issues."
Despite the noble intentions -- more competition, choices and consumer input-- it's hard to see how co-ops will be able to gain scale or critical mass when they're covering so few people at this point, according to Ken Fasola, a former Humana and UnitedHealthcare executive who runs the exchange and brokerage HealthMarkets.
"Are they going to be big enough?" Fasola asked, wondering about their payment relationships with providers and operating scale.
The same question may apply to regional and for-profit insurers. "We're going to see some consolidation going forward," Fasola said, predicting another wave of managed care M&A that could see the likes of Aetna, Humana or Cigna scooping up smaller insurers.
But there is also evidence to suggest a bright future for co-ops, if not all of them. Co-ops like Maine Community Health Options and Kentucky Health Cooperative "are enrolling new members at a rapid pace," said Martin Hickey, MD, board chair of the National Alliance of State Health CO-OPs.
"CoOportunity's situation was influenced by a number of unique and specific factors, and is not a reflection on the CO-OP program or concept," Hickey, the CEO of New Mexico Health Connections, wrote in the organization's February newsletter. (One of the main contributors to CoOportunity's demise was the exchange membership they did not have, from the pool of roughly 200,000 Iowans who stayed in lower-premium pre-ACA individuals policies.)
According to Hickey, the co-ops will be able to get onto solid footing within a few years, well before they have to pay off their low-interest loans to the feds. "Success will be better measured once they have had several years to operate on the marketplace and enroll members."
They might also have some scale -- collectively. Eleven cooperative plans, including those from Colorado, Connecticut, Illinois and Tennessee, have banded together much like the Blues to act as a multi-state insurer, selling in exchanges as part of the Affordable Care Act's MSP program.
Co-ops are competing with traditional insurers in the exchange based on the pricing and networks, but also with better customer experiences and new digital products, services and rewards. Health reform for all insurers is an opportunity to become a consumer-oriented, if not consumer-operated, health plan. It's also a chance for some to rekindle their community-based mutual roots.
The co-ops, like the many Blues and national insurers, are offering options like online and mobile provider comparison and claims portals, telehealth benefits and wellness rewards. There is also a kind of for-profit consumer-oriented plan, Oscar Health Insurance, trying to take ">the best of Silicon Valley consumer tech to the health insurance experience.
One co-op, though, going beyond those kinds of services and the many value-based payment and patient-centered medical homes initiatives, and going straight to demand for primary care.
Led by the former Baltimore health commissioner, Maryland's Evergreen Health Cooperative is operating its own primary care clinics -- in Baltimore, Greenbelt, Whitemarsh and Columbia -- where members can come for personalized and comprehensive wellness, disease management and health coaching.
At the Evergreen Health Care clinics "doctors and nurse practitioners will spend twice as much time with you as in typical primary care settings, so that they can get to know you personally and focus on the things that are important to you," the co-op boasts.
The clinics also feature care coordination, 24/7 telephone access to clinicians for urgent concerns, lab services, "customized wellness plans" and online appointment scheduling, access to test results and email with providers. In many ways, Evergreen is emulating a previous generation of health co-ops, such as Health Partners and Group Health Cooperative.
Along with a traditional provider network, Evergreen is pitching the clinics as part of its health plans to individuals, employers and also military veterans. The co-op scored a one-year $485,000 contract with the Department of Veterans Affairs to allow Maryland veterans to use Evergreen clinics for primary care, preventive health, screenings and referral coordination.