K. Coops Which Provide Health & Social Security Benefits

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     1.  In market economies

In many countries health and social services available to the
majority of co-operative members from either public or private
for-profit providers are either too costly or of poor quality. 
In response to this situation, member-owners of many co-operative
enterprises and organizations have decided that within the
benefits provided to them by their co-operative enterprise from
the surplus it generates should be included means for improving
health status and social well-being for themselves and their
dependents, and in many cases for employees of the co-operatives.

In some cases such means take the form of the enterprise's own
health insurance fund or payments to an external health insurance
enterprise.  In other cases they take the form of subsidized or
free access to health facilities and personnel, sometimes owned
and operated by the enterprises as a subsidiary department.  In
many instances benefits consist of a mix of insurance and use of
our own facilities.  Several types of situations can be observed:

(a)  co-operative enterprises provide only the health and social
     insurance coverage required by law or by collective
     bargaining agreements of any enterprise;

(b)  in addition to the above, or as a partial or total
     substitute for it, the co-operative enterprise provides as
     a benefit to members, additional health and social
     insurance coverage, which can be used by them to purchase
     services from other enterprises, co-operative or not;

(c)  in addition to, or in substitution for, either (a) or (b)
     the co-operative enterprise provides its own services,
     organized as a subsidiary;

(d)  in addition to, or in substitution of all the above the co-
     operative enterprise encourages its members to form their
     own autonomous (but possibly supported) user-owned health
     and/or social care co-operative; or:

(e)  enters into an agreement with an existing and independent
     health and/or social care co-operative - or promotes the
     establishment of such an enterprise - for the provision by
     it of services on a preferred basis to its own members,
     employees and dependents.  

The total impact of direct and indirect provision for the health
and social well-being of members, employees and dependents has
been substantial in some cases. This has been true particularly
of benefits provided by major consumer co-operatives
organizations as one among the many types of goods and services
provided to the general membership. In those countries where
significant proportions of households have been members of the
consumer co-operative movement at certain periods or recent
history, or are still, this co-operatively organized component
of the health and social care sectors has assumed major national
significance.  For example, in the United Kingdom, for large
proportions of lower income households their membership if
consumer co-operative health and social insurance and services
was of vital importance until 1945 when they were superseded by
those of the Welfare State, for which they served to some degree
as a model.  In 1922 43 per cent of all households in the United
Kingdom were members of the consumer co-operative movement.  They
received half of their food and a tenth of all other goods and
services from their co-operatives.  Among these services were
health, disability and life insurance and funeral services.83/ 

As enterprises within the formal economy it is the case that
almost all co-operative enterprises make provision in the same
way as do other enterprises for the health and social security
coverage of employees, including, in the case of producer and
provider-owned co-operatives, their worker-members.  In many
countries, because they are classified as self-employed, coverage
may be different, less complete or more costly.

In Israel the Kibbutz, a type of comprehensive agricultural co-
operative, is managed on the basis of cooperation in all aspects
of daily life, including provision of health services.   The
Moshav Ovdim, a type of agricultural co-operative in which
production is organized individually not collectively, also have
health services organized co-operatively.84/ 

The Regional Office for West Africa of the International Co-
operative Alliance has reported that in this region a number of
co-operatives and women's organizations have contributed funds
for the construction of premises, as well as operating costs, for
rural pharmacies and health centres. This arrangement is made
also in some Central African countries. In Zaire, for example,
an organization of 5,000 handcart drivers in Kinshasa and
Ludumbashi operates a common fund, into which members pay the
equivalent of 10 US cents per day, which is used to provide a
health care unit, a life insurance fund, and a primary school.
Where advantageous for their members, co-operative enterprises
and groups have preferred to supplement or replace national
coverage on behalf of members, employees and dependents.  This
has been the choice of the Mondragon Co-operative Corporation
(Mondragon Corporacion Cooperativa) in the Basque Autonomous
Region in Spain.86/  In response to the exclusion in 1958 by the
public social security system of co-operative members, because
they were considered self-employed, the Corporation set up within
its financial component, the Caja Laboral Popular, a special
insurance branch, "Lagun-Aro", which provided members with health
and unemployment insurance and pensions.  In 1973 Lagun-Aro
became a separate component of the Corporation.  Members of each
of the individual industrial, agricultural, housing and school
co-operatives, as well as of the three other secondary co-
operatives, are automatically members and benefit from the social
security and welfare services, including health insurance, which
it is the function of this secondary co-operative to administer.

The Board of Directors of Lagun-Aro are appointed by the
Association of Co-operatives, which is the directorate of the
Group and which includes representatives of the membership of all
the primary co-operatives, who, thereby, participate in the
policy process of the Lagun-Aro.

The Mondrag›n Corporation, including Lagun-Aro, does not maintain
its own health services, so the health insurance provided to
members is used by them to purchase services when needed from
outside the co-operative group. They are free to choose from
public or private for-profit providers: their financial outlay
is repaid by Lagun-Aro to the provider or to themselves.  Special
agreements have been reached from time to time over the last
three decades with the public social security and health
insurance system as this has evolved in the region where the
Corporation operates. Consequently, the separate existence of the
Mondrag›n Corporation's own system has been allowed by the public
authorities since 1985 rather than integration in the system for
self-employed persons, which applies to members of all co-
operatives.  Benefits in the Lagun-Aro programmes are greater
than in the public system: hence members of the Group are
satisfied.  At the same time there is some relief of pressure on
the public system in the Basque region. 

This arrangement is very similar to those set up by many co-
operative enterprises in the form of a jointly-owned but
organizationally independent insurance co-operative [type 2.3.2]
(Chapter IV, section E).  The distinction rests on the fact that
the Mondragon Co-operative Corporation integrates in respect to
many functions its component co-operatives within a single
organization.  This integration is not undertaken solely as the
basis for organizing a health and social care co-operative.  Thus
Lagun-Aro, although a separate co-operative, is in a sense a
specialist subsidiary of the Corporation, with shared membership.

At the end of 1993 there were 19,005 members, simultaneously
members of 125 co-operative enterprises in the Corporation.  

In Japan JCCU launched a nation-wide mutual scheme for co-
operative employees in 1973, and a similar scheme for members in
1979.  Its medical insurance products were first offered in the
mid-1980s.  Daily payments for hospitalization were introduced
in 1987.87/.

In Canada the Saskatchewan Credit Union Central provided a
wellness programme for employees who have accumulated at least
540 hours of sick leave.  The value of any hours in excess of
this could be converted to cash, to an annual maximum of CAN $
500, but had to be used to pay for such preventive actions as
physical fitness, smoking cessation, stress management and
financial planning programmes.  

User-owned utilities co-operatives provide significant health and
social care services in some countries.  In Argentina the
electricity supply co-operative in the Pergamino area of Buenos
Aires Province allocates five per cent of turnover to social and
health services, including an orthopaedic bank which makes
available wheelchairs, orthopaedic beds and other equipment
needed by persons with physical disabilities.  It also provides
funeral services.  In the United States the National Rural
Electric Cooperative Association (which represents over 1,000
rural electric co-operatives, supplying electricity in 46 of the
50 States) provided health insurance coverage to the 131,000
employees and voluntary officers of its member co-operatives, as
well as to their dependants. In 1994 it sought Congressional
approval to establish health benefit trusts that would extend
such coverage to customer-members in rural communities. The
Association believed that both rural residents and health care
providers would benefit from an expanded health care coverage
which would increase financial flows into rural health systems. 
It contended that in many rural communities health care needs
remained unmet, and would not be met by the current proposals for
health care reform, which it considered to be predominantly based
upon an urban model.88/ 

     2.  In transitional economics

In the transitional economies the national public health and
social security system was largely enterprise-based, and the
parastatal "co-operative" element was but one component of it. 
"Co-operative" enterprises provided services to members and
employers, just as was the case for all other enterprises and
public agencies. In many of these economies, with privatization
such services have been discontinued. However, where parastatal
co-operatives have continued to function, and even where they are
now in a process of privatization to genuine co-operative status,
they have tended to maintain at least some of these functions. 
With some adjustment they could remain a significant component
of new multi-stakeholders structures.  

Information is available for Belarus, Moldova and the Russian
Federation. In Belarus, most health services continue to be
provided through enterprises, including parastatal co-operatives
and collectives.89/

In Moldova, under the previous regime most large enterprises,
including rural collectives, as well as government departments,
universities, and other institutions had their own medical
service, provided to their own labour-force and dependants.   The
parastatal "co-operatives" also had their own medical service -
described as the "medical service unit" or department of the "co-
operative", that is the "coopmedsanchast".

During the process of privatization there was reluctance to allow
fully private enterprises to enter the health sector, previously
considered the responsibility of the State alone. After
independence, a number of large enterprises continued the system
of medical service provision, but separated the former subsidiary
departments or "medical service units" from their own central
organization, continuing the relationship by means of a contract
with the newly autonomous "medical co-operative".  Some
enterprises, including collectives and parastatal co-operatives",

The concept of private health insurance was "in the air", but not
yet implemented. The Ministry of Health was interested in the
concept, but felt that the Government could not afford to
establish a public health insurance system. Some of the "medical
co-operatives" had attempted to organise health insurance
schemes.  The new private insurance enterprises had not so far
taken an interest in health insurance.  

No initiatives by individual citizens to establish user-owned
health co-operatives were known to have occurred: probably
because the great majority continued to consider that it was the
responsibility of the State (and of municipal authorities) or of
the enterprises where they were employed to provide health
services (a perception which prevailed even though the continual
decline in the adequacy of those services was apparent to

As of mid-1995 in the Russian Federation health services were
provided by Centrosojuz (the national consumer co-operative
organization) for its employees and members.91/  This continued
the practice which operated prior to the restructuring of the
health sector, which took place on the basis of the 1991 Law on
Medical Insurance of the Citizens of the Russian Federation.  
Centrosojuz operated a 210 hospital (Medical Centre, "Medcoop")
which was also the base of the "N. A. Semashko" Stomatology
Institute. High quality services were ensured by the quality of
staff, equipment and material (in part an expression of the fact
that the parent organization was the national consumer co-
operative system). The facility offered an innovative combination
of in-patient, sanatorium, out-patient and rest programmes.   

Users of the hospital were participants in the national system
of compulsory health insurance introduced by the 1991 Law. They
might also be participants in voluntary health insurance provided
either through the enterprises at which they were employed, or
by private insurers. This complementary system was currently best
developed in Moscow.  Many enterprises continued to operate their
own health services and facilities, financed from their
surpluses, and usually with higher quality staff and equipment
than those of the public sector.

Polyclinics were operated at the headquarters of Centrosojuz in
Moscow, and at other consumer outlets as well as in subsidiary
enterprises owned by the co-operative. In addition Centrosojuz
operated sanatoria in Kislovodsk and Essentuki, which were
mineral water resorts in the Caucasus region, at Bedokurikha in
the Altai region, and at the "Udelnaya" medical-prophylactic
complex in the Moscow region. A rest home was operated at Djubga,
Krasnodarsky Krai, on the Black Sea.  As these sanatoria were
located in different climatic regions, it was possible to provide
rest, prophylaxis and rehabilitation in response to a wide range
of medical conditions. Formerly financed largely from the surplus
of the consumer co-operative system, now considerably reduced,
and more recently also by payments for treatment of beneficiaries
of the national health and social security system, these
facilities currently faced severe financial conditions.  
Tourists and patients from outside the Russian Federation, mainly
from other countries of the Commonwealth of Independent States,
were also able to utilise these facilities.  

Representatives of the Medcoop of Centrosojuz participated in the
International Co-operative  Health and Social Care Forum held on
18 September 1995 at Manchester, United Kingdom. 91/