Health co-operatives are on the rise, IHCO report finds

The growth is a reaction to rising demand and pressure on the public purse, says the report

A new report by the International Health Co-operative Organisation (IHCO) and The European Research Institute on Cooperative and Social Enterprises (Euricse) has found that the sector has grown in importance over the past 20-30 years.

The research, which looks at co-operatives from 13 different countries, concludes the growth is a clear reaction to the increased demand for health services coupled with the growing difficulties faced by public authorities as healthcare expenditure grows.

Co-operatives have a distinct approach, which enables developing prevention services and improving wellbeing.

For example, in Canada and Italy co-operatives are targeting the needs of elderly populations, while in France health mutuals are becoming increasingly relevant in collective care.

All healthcare systems examined presented similar challenges, such as demand for long-term care services due to longer life expectancy, the difficulties of most health systems to organise preventive care; long wait times for healthcare; and the general problem of containing rising health costs.

According to the report, these problems lead to further implications, including growing inequalities between groups of individuals in urban and rural areas, increased cost of private coverage, more pressure on healthcare workers to boost their productivity, and a gap between demand for personalised services and standard healthcare provision.

The paper argues the potential of health co-operatives has been underestimated, due to privatisation of health care service delivery favouring for profit providers, health co-operatives being disregarded by policy makers. One of the reasons for this disregard is the assumption that private providers have higher efficiency than non-profit and co-ops. The lack of reliable data on the relevance of these non-profit and co-operative health organisations is another barrier.

The research showed that the most popular type of health co-ops are worker co-operatives and mutual aid societies. Worker co-ops can bring together different professionals operating in different areas of the health sector: doctors, dentists, nurses, pharmacists and paramedics. This model is particularly widespread in Brazil and Argentina. In Belgium mutual societies play the most central role in the national health system, with 99% of the population covered by mutual protections, the sole provider of compulsory health insurance.

Pharmaceutical co-operatives are another type of producer co-operative that is common in Belgium, Spain and Italy. By contrast, in Canada the ambulance sector is managed directly by worker-members rather than by traditional non profits. 

Another finding was that rather than competing with other providers, health co-ops tend to fill in gaps left by these.

The report notes that like any type of co-operative, health care co-operatives are formed and operated not to maximise profit for investors, but rather to address the needs of specific stakeholder groups or the community at large. This means co-ops can be set up specifically to increase the accessibility of health services to poor stakeholders and marginal or peripheral communities, contributing to reducing health inequalities. Furthermore, by promoting a decentralisation of power, co-operatives enable increased flexibility in the supply of health care services.

The participatory dimension of co-operatives has several beneficial impacts: it encourages the adoption of prevention strategies to fight against health risk factors at the local level, and it enhances the relational dimension of health services, thus contributing to improving their quality.

The research shows that contrary to expectations, co-operatives succeed in funding their activities like or even better than for-profit providers using alternative modalities, including the subscription of shares by large groups of users and the accumulation of profits in special reserves.

Co-ops can attract additional resources such as voluntary work and donations or price discrimination policies in different areas. The contribution of volunteers is particularly important in Italy and Canada, says the report.

In terms of innovation, the paper found that health co-ops have a tendency to innovate when it comes to organisational structures and services.

IHCO president Carlos Zarco said: “One of the main conclusions of the study is that health co-operatives have great ability to adapt to new socio-economic contexts as they have demonstrated over years their suitability when it comes to solving new needs in the health sector. The peculiarities of the health market make non-profit organisations especially efficient in this context.

“The co-operative is a business model that competes in the market like any other but does not have to pay out returns to shareholders and, therefore, reinvests all its benefits in improving service quality and professionals’ working conditions, so ensuring its sustainability.”

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