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MADISON - The debate over health care reform, expected to intensify when Congress resumes next month, has turned to something as much a part of Wisconsin culture as bratwurst and beer: cooperatives.

Most milk in the state is processed through co-ops, and electrical and hardware co-ops abound. Group Health co-ops in Madison and Eau Claire are examples of what some lawmakers are proposing as an alternative to government-run health insurance.

"We would have a head start on the rest of the country," said Bill Oemichen, president of the Madison-based Cooperative Network, which helped create the Farmers' Health Cooperative of Wisconsin two years ago. "We already have a cooperative infrastructure here."

Nonprofit, member-controlled co-ops could compete with private insurance companies and cover many of the 45 million uninsured Americans while requiring only minimal government assistance, according to U.S. Sen. Kent Conrad, D-N.D., the key proponent of the idea.

President Barack Obama's administration indicated last week that it might accept co-ops as an alternative to a public plan. Many Republicans and some Democrats oppose a public plan, saying it could lead to a government takeover of health care by driving out private insurers. But many Democrats want a public plan, and the White House said it still prefers that option.

The Upper Midwest, along with parts of the Northwest,

is co-op country, said Oemichen, whose network represents more than 600 cooperatives in Wisconsin and Minnesota. The prevalence in both regions of immigrants from Scandinavia, well-known for its co-op culture, led

to numerous co-ops that provide or purchase services in agriculture, utilities, lumber, health care and other sectors, he said.

Group Health

Group Health Cooperative in Seattle, which has 600,000 members, is a prime example of a successful health care co-op, Conrad wrote on his Web site. HealthPartners, a co-op based in St. Paul, has 1.3 million members, including many in western Wisconsin.

Madison-based Group Health Cooperative of South Central Wisconsin, formed in 1976, took its name from the Seattle organization and is structured the same way but is legally independent from it, said Larry Zanoni, executive director. The Madison co-op is also independent from Group Health in Eau Claire.

Group Health in Madison owns five clinics. It pays its doctors a salary, instead of having them bill per procedure, so they are encouraged to provide the appropriate amount of care, Zanoni said. The 62,000 members have a say in operations by electing the board of directors, primarily made up of other members, he said.

Madison's Group Health, named the eighth best health plan in the country by U.S. News and World Report the past three years, emphasizes preventive care and alternative therapies, such as acupuncture. It is competitive with other health plans in Dane County - offering slightly lower rates to state employees, for example, than Dean Health Plan, Physicians Plus and Unity, all owned by Madison-based hospitals and doctor groups.

"There's no surplus that goes to shareholders," Zanoni said. "I think we have a lot to contribute to the health care reform debate."

Farmers' co-op

The Farmers' Health Cooperative, which has 2,700 members, is another example of the co-ops that could be expanded if Congress embraces the idea, health care experts say.

Many farmers have a hard time getting affordable health insurance, largely because their strenuous work, including accidents, makes them a high-risk group. The co-op spreads the risk among a large group of farmers and contracts with Aetna for six different plans, which have deductibles ranging from $250 to $5,000.

The plans aren't cheap. A healthy couple in their 30s pay $417 a month for a $1,000 deductible plan, while a similar couple with a history of medical conditions pays about $750 a month. But the plans cover medications and on-the-job injuries and offer up to $500 a year in preventive care. Few farmers can get those benefits individually, Oemichen said.

Bob Topel, a dairy farmer north of Waterloo, said he and his wife couldn't get any insurance after she left her job as a medical receptionist last year to work more on the farm. In their mid-50s, he has high blood pressure and she has high cholesterol. They take medications to control the conditions, but insurance companies still wouldn't accept the couple, he said.

They joined the co-op and are paying $1,300 a month for a $5,000 deductible plan, higher than normal because of their medical conditions. But at least they're insured, Topel said.

"Without it, we'd really be putting the farm at risk," he said.

Co-ops widespread

It's not clear if co-ops would compete on a level playing field with private insurers nationally or be favored by government payments, said Tim Size, executive director of the Rural Wisconsin Health Cooperative. The co-op, based in Sauk City, is composed of 35 rural hospitals that share services such as technology and quality improvement.

Conrad's proposal "is something born out of political necessity," Size said. "It's conceptually not a slam dunk or a stupid idea. It depends on the details."

Chris Queram, executive director of the Wisconsin Collaborative for Healthcare Quality, said most health care co-ops are local and small, not regional or national organizations of at least 500,000 members as Conrad has proposed.

"Can this concept truly be brought to scale quickly and consistently enough across the country to have the same type of impact a public plan might?" Queram asked.

Whatever the future of health care co-ops, Americans frequently interact with some kind of co-op without knowing it, said Ann Hoyt, a UW-Madison economist.

More than 29,000 co-ops around the country, from credit unions and Ace Hardware to Ocean Spray and the Associated Press, together have revenues of about $650 billion a year, Hoyt and other researchers with the UW Center for Cooperatives reported this year.

About 300 health care co-ops have $5 billion in revenues, their study found.

"Co-ops are not as foreign as a lot of people think," Hoyt said.

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