Chapter III -- Provider-Owned Health and Social Care Coops

   This document has been made available in electronic format
      by the International Co-operative Alliance ICA




     1.   In market economics

This type of health co-operative is known to exist in Argentina,
Benin, Bolivia, Costa Rica, Germany, Italy, Mongolia,
Philippines, Poland, Portugal, Sweden and the United States of
America. In the cases of Benin and Costa Rica health providers
formed provider-owned primary health co-operatives as a result
partly of governmental initiatives. In India, a self-employed
persons trade union was responsible. In Italy co-operative
organizations, trade unions and local government authorities
supported action by health professionals and in the Philippines
religious organizations provided some support.  Elsewhere, as far
as is known, establishment of a health co-operative resulted from
the independent action of provider-members.  

In Argentina a provider-owned health co-operative Cooperativa de
Residentes y Especialistas (COOPRES) was set up in San Miguel de
Tucuman in 1993.  It is probable that other health co-operatives
are active elsewhere in the country, in view of the existence in
Buenos Aires of a Gabinete de Estudio y Promocion del
Cooperativismo Sanitario. It was established by doctors, bio-
chemists, dentists, physiotherapists, psychologists and other
professionals in order to satisfy the needs of local residents
for most of whom a public hospital, and social care provided by
unions and other associations, were inadequate. In March 1996
about 10,000 persons were affiliated as users with the co-
operative, whose professional members were able to provide
adequate services at low cost at a central clinic in San Miguel
de Tucuman, a health centre at Ranchillos and at members'

In Benin in May 1991 the Sikecodji Co-operative Health Clinic was
established in a suburb of Cotonou by recently graduated health
professionals who were then unemployed because of retrenchment
in the public health sector. This had included the freezing of
all public health service recruitment. The idea of establishing
a health co-operative as a means to simultaneously improve health
services and provide professional employment had been suggested
by the Government, which formulated a "Clinic Co-operative
Project".  Seed capital in the form of a loan of between $ 9,200
and 13,000 was provided by the World Bank to this and to nine
other similar health co-operatives in other parts of Benin.  This
was to be repaid over five years. It was intended to cover
equipment, remodelling of premises and staff salary for the first
two months. UNDP and WHO have also supported the project. 

Each clinic has a doctor, two midwives and two health assistants. 
The Government has proposed that a further six health co-
operatives be established. However, income for the co-operative
and its provider members and owners, must be obtained through
fees paid by patients. The clinic offered three types of service:
consultations and short duration hospitalization (up to three
days); home visits to out-patients; and training of health
assistants.  Trainee health assistants paid the equivalent of $
93 for their course, which compared favourably with the fee of
$ 278 for training at a public hospital.

After four years' experience it was felt in early 1995 that the
co-operative clinics have had a positive impact upon the health
of the communities in which they operated. They have provided
employment to young graduates and school leavers. They have also
inspired interest among other unemployed persons in co-operative
solutions to their situation: as a result they have set up co-
operatives for inter-city transport and for the distribution of
school supplies and stationery.

However, these health co-operatives have encountered problems
arising from the unfamiliarity of members with business methods
and particularly with the special type of organization and
management characteristic of a co-operative enterprise. There
have been difficulties in deciding the distribution of income
among members with different levels of qualification: this has
been exacerbated by the fact that income is limited because only
low fees can be charged to a predominantly poor clientele.  The
result has been that some members do not participate fully in the
activities of the co-operatives. In addition there is strong
competition from non-co-operatively organized private sector
health services, particularly in urban areas. To help to resolve
these difficulties the Regional Office for West Africa of the
International Co-operative Alliance was to begin, late in 1995,
to provide training by means of a programme for which $3,700 had
been set aside.94/

As part of its Inter-regional Programme, undertaken as a Follow-
up of the World Summit for Social Development, the International
Labour Organization has prepared a provisional list of social
services that might be organized on a mutual basis. This has been
based on experience of ongoing projects undertaken by ILO in
collaboration with the Belgian NGO Wereldsolidarieteit (World
Solidarity: WSM), and on requests received from the governments
of the countries concerned. It includes support to the
development of health co-operatives in Benin, in partnership with
Benin Credit Mutuel, the Federation G‚n‚rale des Travailleurs,
the Centre R‚gional de Developpement de la Sant‚ and a number of
other organizations. 95/ 

In Bolivia, a 1977 report stated that provider-owned co-
operatives whose members consisted of 18 doctors and two dentists
served 15,000 persons.96/

In Costa Rica, within the context of a several experiments in
health services delivery involving contractual arrangements
between the Government and the private sector, groups of
providers have established three co-operative clinics in recent
years:  Coopesalud, formed in 1988, Coopesain, formed in 1989,
and Medicoop, formed in 1992. There was also a fourth health co-
operative owned jointly by providers and local associations
(Coopesana, formed in 1993). 97/ 

Coopesalud is situated in the Pavas district in the southern
periphery of San Jos‚. It was set up by 20 doctors in October
1988: by early 1996 it had 25 doctor members and 178 employees. 
In 1994 it had a budget equivalent to 3.5 million Canadian
dollars, of which 99 per cent was provided by the Costa Rican
social security system (CCSS), which also leased to the co-
operative 10 community-based centres, operated by an "Integrated
Health Service Basic Team (EBAIS)".  A contract between the co-
operative and CCSS defined the services which it would provide,
the tariff paid per user (capitation), and the norms and controls
to be observed.  The users paid no fee to the co-operative, which
is paid by the CCSS to secure the health of the population and
not for separate medical interventions, thereby contributing to
maintaining a balance between the economic interest of the co-
operative and the social goal of the public service it provides. 

Coopesain (Cooperativa Augestionara de Servidores para la Salud
Integral), is located at Tibas, north of San Jose, where it
serves a community of 60,000 persons. In 1993, it had 170
employees of which 30 per cent were professionals.  85% of its
activities are financed by the sale of its services to the CCSS
and Ministry of Public Health.  The remainder is provided by the
sale of dental services, occupational health and other services
to local enterprises. It retains elements of health promotion and
disease prevention derived from the public health system, while
introducing innovations designed to achieve increased
organizational efficiency and client satisfaction. The clinic
provides ambulatory surgery, pharmacy service and home visits
more easily to the community, and at lesser cost to the
Government, than was previously the situation. The former
inappropriate use of area hospitals had been reduced. There was
a commitment to community participation, and the clinic's
programmes permitted greater responsiveness to community needs. 
 Both providers and clients reported greater satisfaction than
with either public or private for-profit health service
institutions. 98/ 

Medicoop was set up by 16 doctors in November 1992, a number
which had increased to 19 by early 1996. It serves the cantons
of Barva and San Isidro in the province of Heredia and parts of
the province of Alajuela, with a total population of 75,000 in
1993.  It is totally financed by the CCSS.

In Germany during the period 1980 to 1994 there were three
doctors' co-operatives (presumably provider-owned health co-
operatives). In 1970 there had been seven.  99/                
In Italy health co-operatives can be considered a specialized
type of what are termed "social co-operatives".  They are solely
or primarily concerned with health rather than social care.  The
national apex co-operative organizations have promoted
development of this type of service provider owned co-operative. 
According to statistics issued in June 1993 by the two major
national apex organizations, Lega Cooperative and
Confcooperative, the number of social co-operatives associated
with them was l,826. Other social co-operatives were known to
exist, and the national total was estimated conservatively to be
at least 2,000.  In 1986 there had been about 500 "social co-
operatives", by the end of 1988 there were 1,242 and in 1990,
2,125. 100/  

A survey of 660 of the 1,826 social cooperatives associated with
the two national apex organizations, carried out in December 1992
by the Centro Studi of the Consorzio Nazionale della Cooperazione
di Solidariet… Sociale, "Gino Mattarelli", and published in 1994
as the "First Report on Social Co-operation" indicated that 422
were engaged in providing social, educational or health services; 
110 were engaged in integrating disadvantaged persons in their
communities through employment; and 128 were engaged in both of
these categories of activity. Of the 549 "social cooperatives"
providing either social, educational or health services alone,
or these services combined with provision of employment for
disadvantaged persons, only 13 per cent (71 co-operatives) were
engaged in the provision of health services, usually in
association with social care. 101/

Development of such co-operatives was recent. Of the 660 "social
co-operatives" surveyed at the end of December 1992, only 12 had
been established prior to 1976: 77 had been established between
that year and 1980, 250 between 1981 and 1985, 226 between 1986
and 1990, and 43 during the two years 1991 and 1992. 

The survey results did not provide separate information for
health co-operatives in respect to the population group they
served: disabled, elderly or young persons were most frequently
the target clientele of social co-operatives as a group. The
users of the 660 co-operatives surveyed totalled 42,000: the
numbers using health services provided by health and mixed-
activity "social co-operatives" alone was not reported.

The survey revealed that these were combined user- and provider-
owned cooperatives of a particularly complex type.   Membership
included ordinary worker members, who worked in return for a wage
(that is they were on the payroll and had their social
contributions paid by the cooperative); paid collaborator-members
- professionals, administrators or consultants, receiving a fee
for services; voluntary members, providing their labour free of
charge, although insured against work-place accidents and
occupational disease; subsidiser-members, providing financial
capital but not working in the cooperative; legal-person members,
institutions including public agencies subscribing to shares in
the co-operative's capital and thereby financing its activities;
and user-members, drawing benefits from the co-operative,
including disadvantaged worker-members in the case of those
social co-operatives providing employment for disadvantaged
persons.  The survey also recorded a large number of what could
be called "inactive" members, who were founders of or
sympathizers with the cooperative, but who neither participated
in its activities nor used its services. However, the majority
of active members were workers, collaborators, volunteers,
subsidisers and "legal persons" - totalling 21,300 compared with
l,638 user members and 1,523 disadvantaged worker members.   

Hence, it might be argued that functionally these are a
particular type of provider co-operatives. This characterization
is likely to be particularly true for those of the "social co-
operatives" providing only health services, given the
professional qualifications required of provider members.   From
the point of view of the system of classification used in this
study, therefore, health co-operatives within the group of
Italian "social co-operatives" are considered provider co-
operatives (but the remaining social co-operatives are considered
more likely to be jointly-owned enterprises and they are so
classified for the purpose of this review).

The persons who founded most social cooperatives had as their
primary objective their more effective participation in
management of the enterprise in which they performed their
profession. They considered also that, largely because of the
complex nature of personal services provided by such
cooperatives, not only their own participation, but that of
clients and collaborators, was essential, and could be
satisfactorily achieved by the co-operative form of organization. 
Most of the 660 social co-operatives surveyed were small in terms
of workforce: 72 per cent had less than 30 workers, paid or
volunteer. On average they had a paid workforce of 32 persons and
a voluntary workforce of 11 persons. For "social co-operatives"
as a whole, the majority provided services mainly to persons
unable to pay for them: consequently, costs were met by a third
party, usually a governmental agency, which also provided grants,
subsidies, and the use of equipment and facilities.  Such
expenditures were increasing significantly: by 1993 about 13 per
cent of public spending on social welfare was allocated to the
financing of "social co-operatives". 

In Mongolia dental physicians trained in Japan recently
established a provider-owned dental service co-operative, the
Enerel Dental Clinic, in Ulan Bator.  In a Report to the
International Co-operative Health and Social Care Forum held at
Manchester on 18 September 1995 in the context of the Centennial
Congress of the International Co-operative Alliance, the Medical
Co-op Committee of the Japanese Consumers' Co-operative Union
noted that this co-operative faced considerable organizational
obstacles. 102/

In Mindanao, Philippines, in 1982 eight young doctors combined
to form a "Medical Mission Group" and set up a small clinic in
Davao City, borrowing equipment if needed for operations from a
colleague and owner of a private hospital. They provided services
to low-income communities on a "pay-what-you-can" basis.  In 1985
their first small hospital opened in Barrio Obrero, Davao City,
and received official accreditation as a Medicare and Philippines
Health Authority hospital. In 1986 a second small hospital opened
in Tagum, Davao del Norte, and a community-based self-help health
insurance scheme was started in Barrio Obrero to which every
family contributed 20 pesos a month. The fund was used to
subsidize the salary of one of the doctors in the Medical
Mission, from whom members could obtain free consultation.

In May 1990 the Board of Directors of the Medical Mission Group
decided to transform the Group into a co-operative, the "Medical
Mission Group Hospital and Health Services Co-operative".  Early
in 1991 the community-based health insurance scheme established
in 1986 was transformed and expanded, forming the Co-operative
Health Fund.  The first general meeting of the Co-operative
Health Fund was held in May 1992. The Fund provided comprehensive
health coverage to all 50,000 members of the 150 co-operatives
in the region. These co-operatives deposited contributions from
their members in the Co-operative Rural Bank of Davao City, which
managed the Fund jointly with the Health Services Co-operative
and the Federation of Co-operatives. Members of the Health
Services Co-operative included not only contributors to the Fund,
but doctors, nurses and other staff, including janitors.  In
November 1991, with a loan from the Co-operative Rural Bank, a
60 bed tertiary hospital was set up at Agdao, in Davao City, to
provide services to members of the Co-operative Health Fund. 
Plans for the establishment of other co-operative hospitals were
under consideration in 1992, with good prospects for extension
of the programme to other parts of the country. The first
hospital established, in Bairro Obrero, was to be converted into
a paraprofessional training centre (the Adolescent Health
Development Centre) for young persons from poor communities.103/

In Poland provider-owned health co-operatives first appeared in
1945.  Members were health professionals, often specialists,
already employed in the public health system. Fees charged to
patients could not be reimbursed, as there was no private health
insurance, consequently clients were drawn from a very small
proportion of the population. These health co-operatives
complemented the public system of local health centres by
providing special services: usually they had better equipment and
facilities, and were able to meet client's needs with limited
delay.  Some provided occupational health services, particularly
for disabled persons who were members of worker-co-operatives,
with payment made by the public health insurance system. In many
cases the co-operatives rented space from housing co-operatives. 

By the end of the 1980s a national association had been formed
which had a membership of 27 out of the then operating 31
provider-owned health co-operatives and nine other worker-owned
co-operatives in the health sector, including dentistry co-
operatives.  The 27 members operated 325 health centres with a
labour force of 9,262, including 3,532 doctors and 1,100

With the dismantlement of the socialist centrally-planned system,
the fiscal and legal environment for this type of co-operative
became unfavourable: a number transformed themselves into private
for-profit enterprises, others ceased operation, but an unknown
number continued to operate. In early 1996 it was reported that
there no longer existed a national federation for health co-
operatives and information on those still operating was not
available.  It was considered, however, that in the new societal
conditions there was still a function for such health co-
operatives, particularly in those areas where the public health
system no longer provided adequate services. They would cater in
particular for the relatively high income sections of the
population.  104/ 

In Portugal early in 1996 one provider-owned co-operative existed
in Lisbon and two in Porto, the second largest city.  In addition
an educational co-operative, the "Higher Polytechnic and
University Education Cooperative" (Cooperativa de Ensino Superior
Politecnico e Universitario (CESPU)), has established two Higher
Institutes of Health Sciences, one in the north, one in the south
of the country. These provide degree courses, and also post-
graduate and continuing education courses in health sciences. 
Their teaching facilities are made available to the general
public: already operating at the beginning of 1996 were a dental
clinic and a polyvalent laboratory capable not only of
undertaking clinical analyses, but toxicological and
criminological analysis, as well as support for consumers,
principally by analysis of foods. It was planned to establish
progressively a number of specialized clinics. 105/ 

In Sweden early in 1996 a small number of provider-owned co-
operatives operated in the health sector: they comprised two
primary health clinics and one physiotherapy clinic. There were
about 20 dental clinics, located in Stockholm and Kronoberg
Counties, which were sometimes considered to be co-operatives,
but were organized in such a manner that their co-operative
character was open to question. 106/

In the United States, where most development has been of user-
owned co-operatives, a 1984 article noted that there were many
examples of small provider-owned health co-operatives. However,
there was neither a formal association nor even an informal
network of such co-operatives. In the early 1990s a number of
provider-owned co-operatives existed whose members were health
professionals, including doctors, nurses and midwives. 107/  

     2.   In transitional economies (temporary and pseudo-co-

Information is available for Byelorus and Moldova.  It is
probable that similar developments have occurred in other of the
transitional economies. In Belarus the development of independent
provider-owned health co-operatives has been controlled by
changes in the legislation concerning privatization and that
concerning co-operatives. During the period of "perestroika",
from 1987 to 1900 private enterprises were not permitted, but
entrepreneurs unwilling or unable to operate within the still
dominant state and parastatal system, were able to take advantage
of the continuing legitimacy of "co-operative" enterprises to set
up de facto private for profit enterprise under the name "co-
operative".  These appeared in large numbers in almost all
sectors of the economy and regions of the country, and included
"medical co-operatives".  It was during this period that the
terms "co-operative" and "co-operator" become synonymous with the
worst type of entrepreneurial exploitation and abuse.  
With national independence, the new constitution and laws
permitted fully private, investor driven "enterprises with
limited responsibility".  Moreover, responsibility was in fact
extremely limited, to an amount equivalent to US$ 2, so the risk
to investors of losing capital through failure or of highly
speculative, even illegal ventures was minimal. "Enterprises
registered as "co-operatives", in contrast, were subject to
seizure of all capital, equipment and buildings in case of
bankruptcy or fraud.  Consequently, almost all of the new "co-
operatives" changed their status to enterprises with limited
responsibility."  These included the so called new "medical co-
operatives", which continued to exist as private investor-
controlled enterprises.  Proposed changes in the law which will
raise the levels of responsibility of private enterprises are
unlikely to bring about a shift to true provider-owned health co-
operatives and the term co-operative has an even worse reputation
than that derived from the period of social central planning.108/ 

In Moldova the first "medical co-operatives" appeared in 1985
when it was first permitted to establish genuine co-operatives
in the then USSR.  However, the majority of currently operating
"medical co-operatives" have been established since 1992, when
the country became independent, adopted its own constitution and
issued its own legislation. In this new situation the Ministry
of Health issued an instruction that allowed the activities of
"medical co-operatives". These were conceived of either as small
individual enterprises, owned by a single natural and juridical
individual (an entrepreneur), or as a subsidiary or component of
an existing enterprise. Registration and licensing took place
under the law relating to small private enterprises. The
professional staff of the "medical co-operative" was hired by the
owner-entrepreneur or by the parent enterprise.  None of the
"owners" (entrepreneurs) were themselves doctors. It was not
possible for a group of doctors to combine to establish a
provider-owned health co-operative because the current law
precluded ownership of an enterprise by a group: to ensure
responsibility, either an individual, or an existing enterprise,
had to be the "owner".

There were considerable bureaucratic obstacles to be overcome by
an entrepreneur or (although perhaps less so) by an enterprise. 
It was necessary first to register the "medical co-operative" and
to obtain a license from the Ministry of Justice. This required
presentation of numerous papers, including one from the Institute
of Linguistics of the Academy of Sciences stating that the name
of the co-operative had been examined and truly corresponded to
the official nomenclature.  After licensing by the Ministry of
Justice it was necessary to register and obtain a license from
the Ministry of Health. There was considerable hostility to such
"medical co-operatives" on the part of this Ministry, partly
because it perceived that the services they provided might be of
low quality, at least in relation to prices charged.  As of
October 1995 there were about 20 such enterprises in operation,
although between 60 and 70 licenses had been issued by the
Ministry of Health.

The term "co-operative" had been utilised because it was more
acceptable to the Government than a fully private enterprise,
particularly perhaps as applied in the health sector, which was
perceived to be an area in which only the State had the
responsibility and obligation to operate.

To improve their acceptance the new entrepreneurs within the
health sector continued to describe their enterprises as "co-
operative medical/sanitary units" ("coopmedsanchast"). They are
equivalent to for-profit medical practices in market economies:
they are not provider co-operatives. A few may be the
subsidiaries of larger co-operative enterprises.

Typically the 20 odd "medical co-operatives" employed five to six
doctors and an additional two to three nurses as well as seven
to eight other personnel. The doctors were employed primarily in
the public health service, and worked in the "medical co-
operatives" as a second job: for this reason the enterprises were
open only in the afternoons.  Most provided general medical
services but some specialized in dentistry, gynaecology, urology
and other areas.  They operated only in the capital and two other
of the largest cities: they did not exist in small towns or in
rural areas.  Some of the "medical co-operatives" operated on the
area of large enterprises, with whom they had a contractual

There was no restriction on the type of client - except their
ability to pay for services.  The cost of a general examination
varied between the equivalent of three and ten US dollars, that
of examination and some treatment between five and ten dollars,
and a complete course of treatment averaged between 80 to 100 US
dollars.  These costs could be compared with salaries in Moldova
of 40-50 US dollars a month for doctors in the state hospital
system, 20-25 dollars a month for high school teachers.  Doctors
employed in the "medical co-operatives" earned up to $ 100 per

Consequently, the greater part of the population were unable to
pay for their services, and were obliged to use the public health
system. Those that could pay consisted of included members of the
new business class, but these were not numerous. Some of the
"medical co-operatives" had invested in expensive equipment, were
obliged to rent office space, and to pay staff. Consequently,
most "medical co-operatives" faced considerable financial
difficulties: a number operated at a loss.

To obtain additional income some manufactured medicines and
medical equipment.  Another source of income was to provide,
under contract to large enterprises and some collective farms,
lectures on health topics to their labour forces, and to
undertake medical inspections. Payment was made to the "medical
co-operative" by the enterprise on behalf of its labour force.

The various "medical co-operatives" had not yet formed a national
association (although the collective title "Moldcoopmedsanchast"
- Medical and sanitary component co-operative of the Moldavian
Co-operative Union - was employed.109/

          NETWORKS [TYPE]

This type of health co-operative is known to exist in Brazil,
Chile, Colombia, India, Malaysia, Paraguay, Spain, the United
Kingdom of Great Britain and Northern Ireland and the United
States of America.

In Brazil the largest system of provider-owned health co-
operatives in the world has been established: this is Unimed do
Brasil (translated by the co-operative itself as the National
Confederation of Health-care Co-operatives but more recently
described by it as "the Co-operative Businesses and Enterprises
Complex Unimed do Brasil"), a system based upon secondary
provider-owned co-operatives but which has developed strongly at
the tertiary level.110/  

The Unimed system began with the establishment on 18 December
1967 of the first provider-owned health co-operative to operate
in Brazil, located in the port city of Santos. A group of 21
local doctors, led by Dr. Edmundo Castilho and Dr. Pedro Kassab,
were responsible for this development, which was in large part
a reaction to the situation caused by the Government's 
establishment of a unified national social security system in
1966.  This had proclaimed the right of all citizens to medical
attention in public health centres or through contracted
services.  As funds were insufficient for the provision of such
services to the entire population by means of public agencies
alone, the Government made a contribution to each private
enterprise equivalent to five per cent of the minimum wage for
each worker, but held the enterprise responsible for making
medical services available to its employees and their dependents. 
Group medical schemes were set up by enterprises, and new types
of for-profit health centres were established in order to cater
to this new market, although opposed by the Brazilian Medical
Association (AMB).   

The health professionals who founded the first health co-
operative defended the importance of a patient's right of choice
and of services provided by a doctor in his or her own premises
to persons whose personal circumstances and health record were
well known to them, rather than in commercial health centres
whose efficiency could not be guaranteed. The founders were also
concerned to eliminate intermediaries - constituted by the
private for-profit enterprises owned and managed by non-
professionals who had set up health centres and entered into
group contracts with enterprises.

Each primary provider-owned co-operative is a society whose
owner-members are independent health-service providers, including
both doctors working alone and group practices. They are
essentially worker-co-operatives. By 1975 there were 40 provider-
owned health co-operatives, by 1980 80, by 1990 180 and by mid-
1995 there were 304 such co-operatives. Their member doctors
totalled 73,000, over 30 per cent of the national total of

The concept of a health provider-owned primary co-operative was
diffused to other regions by the founders, secondary networks
were established in each State, and in 1978 Unimed do Brasil was
established as a national tertiary co-operative organization. 
In 1994, at its 24th National Convention, held at Salvador, State
of Bahia, a Unimed Charter, or Constitution, was adopted.  It
delineated the basic principles governing the Co-operative
Businesses and Enterprises Complex Unimed do Brasil.  

In mid-1995 the Unimed system provided services to about
9,000,000 users: a ratio of nine doctors per thousand.  These had
either individual or group contracts arranged through the
enterprises in which they were employed. Although standardized,
coverage varied to some extent to reflect local conditions.  In
September 1995 the principal of the 30,000 enterprises and other
organizations having contracts with Unimed whereby that system
provided services to their employees or members included one co-
operative (Cooperativa de Consumo do Grupo Rhodia), two trade
unions (metal workers and banking workers), two universities
(Campinas and Pontifica Universidade Catolica), a technical
school, two scientific foundations, four banks, and three service
and 19 manufacturing corporations.  As the Unimed system has
become an integrated nation-wide network, contract "enrolees" at
any member secondary co-operative are able to obtain medical
services from any other members throughout the country.  

Through operational agreements reached recently with associations
of doctors in Uruguay and in the Province of Buenos Aires in
Argentina, medical attention is provided in those countries to
those Brazilian tourists, travellers and temporary residents who
have individual or group contracts with Unimed.   A similar
agreement is planned in the near future for Paraguay, where a
Paraguayan Unimed was to be established in 1995.

During the first decades of operation of the Unimed system
referrals were made either to clinics owned or operated by member
health providers, or to hospitals on the basis of contractual
arrangements.  More recently, Unimed has begun the operation of
its own hospital and support facilities. The Unimed co-operative
in Brasilia was the first to begin operation of its own hospital,
in 1983. This was established in response to opposition by
providers of other health plans, concerned with the high quality
competition provided by Unimed: to counter this, they had
persuaded local hospitals to cancel their agreements with the
Unimed co-operative. In this situation the co-operative decided
to establish its own facilities by leasing an existing hospital,
using for this purpose its own financial resources, supported by
those of the national Unimed system. By March 1992 eight Unimed
primary co-operatives were operating their own hospitals, and by
mid-1995, 19, with 14 others under construction.  It was planned
in mid-1995 to increase the number to between 40 and 50 by the
year 2000.  The number of beds has grown from 600 in 1991 to
1,176 in mid-1995, and will increase to 3,300 in 2000.  In
addition, in mid-September 1995 the Unimed system owned and
operated 14 X-ray laboratories, 22 clinical analysis
laboratories, three diagnostic centres and 66 mobile first aid

Unimed has developed a comprehensive tertiary level organization
which has its own subsidiary institutions (see Chapter V), but
a number of its characteristics appear relevant at this point. 
Unimed adopted in September 1990 a policy of self-sufficiency in
respect to the operation of its hospital facilities: it intended
to up-grade and modernize loaned, rented and leased hospitals and
reserved bed units and to construct its own new health centres,
surgeries and polyclinics, as well as administrative and support
facilities. This strategy was thought necessary in response to
the serious running-down of the public health service, and the
lack of resources available to health services operated by
philanthropic and beneficent associations, many of which were on
the verge of bankruptcy. Because of this situation, Unimed could
only provide high quality services to its clients upto the point
when they needed hospitalization: referral of its clients to
hospitals operated by other organizations usually involved a
serious reduction in quality and hence user satisfaction.

Consequently, a Division of Hospital Self-sufficiency was
established within Unimed's Board of Planning and Development in
1991.  Among other functions, it prepares a series of manuals
concerning, for example, setting up specialist units within
hospitals, planning entire hospitals, and establishing technical
specifications for road, air and water ambulances. It also
undertakes upon request diagnosis of the financial and technical
situation faced by individual Unimed co-operatives and recommends
the most appropriate solution - for example, the best choice
between various possible partnerships with other enterprises and
operation of own facilities.  An agreement has been made with the
Department of Architecture and Town Planning of the Catholic
University of Campinas, on the basis of which standardized models
for hospital development are being developed.  

This system-wide programme will be financed in part from the
Unimed systems' own financial subsidiaries, including in
particular Unicred.  The provision of this professional service
has encouraged confidence by individual members in investing in
their co-operative, perceived by them to have considerable
viability and potential as part of a single national system which
has been able to accumulate progressively greater financial,
institutional and human resources.  Consequently, members have
become an important source of capital for the entire system's

In Chile the health co-operative "Cooperativa de Servicios de
Proteccion Medica Particular Ltda., PROMEPART", was established
in May 1968. It continued the work of an association founded in
December 1962 (Corporacion Particular de Asistencia Social y
Technica Ltda.) with the purpose of providing medical care to the
work-forces of a number of enterprises.  At that time a number
of major enterprises operated their own welfare services which
provided health, housing, education and other services for their

In 1981 PROMEPART, taking advantage of legislation which
permitted the provision by "Instituciones de Salud Previsional
(ISAPRE)" of services to employees who decided to withdraw from
the national health scheme, extended its services to the larger
number of persons then able to choose their health providers.  
In 1988 it was reported that PROMEPART/ISAPRE was one of the
largest health service institutions in the country, and the
largest in the Santiago Metropolitan Region, with about 80,000
members and a total of 200,000 beneficiaries, including family
members.  In 1992 it was reported that the co-operative provided
services to employees of large and medium-sized enterprises, as
well as individuals, totalling 134,500 members (and hence about
336,000 beneficiaries). Programmes included partial payment of
the costs of medical attention, payments during periods of
illness, and the organization of an incipient system of
preventive medicine, child health and maternity care.  During
1992, it inaugurated a new health centre at San Joaquin, which
would specialize in infant and child health and in health
services for the elderly.111/     

In Colombia the co-operative "Cooperativa Medica del Valle y de
Profesionales de Colombia (COOMEVA)" originated as a multi-
functional mutual insurance co-operative whose user members
happened to be health professionals.  It subsequently expanded
geographically, and then extended its membership - and provision
of multiple services, some directly through its own resources -
to all professionals. It later expanded its health insurance
services to non-members in the communities where it operated.  
Finally, it assumed (with some organizational adjustment) the
status of one of the officially recognized providers of health
insurance within the national health insurance and social
security programme.112/ 
"Cooperativa Medica del Valle" was established in 1964 by a group
of 27 doctors for the purpose of meeting the needs of doctors in
the Cali region to obtain social security for themselves and
their dependants.  It was also perceived as a means to meet
concerns for their professional futures in the context of a newly
public social security system (Organization for Social Security). 
It was felt necessary to organize collectively for the better
performance of their activities.  

Choice of a co-operative form of organization reflected the fact
that the co-operative tradition was already well established in
this region of Colombia, in which primary co-operatives of
various types had already established secondary and tertiary
organizations. Moreover, during the late 1950s and early 1960s
the co-operative movement in Colombia experienced a considerable
expansion, supported by the co-operative movement of the United
States within the context of the Alliance for Progress. This
expansion resulted in the adoption by the national legislature
of a new legal statute on co-operatives, law 1598, in 1963.

The co-operative's services began with the organization of
savings and credit services for the health professionals (mostly
doctors) who were members.  Life insurance was offered in 1967
and vehicle insurance in 1968, when membership was opened to
doctors in neighbouring areas.  In 1969 membership was opened to
all professionals and persons with technical training in the Cali
region, and in 1970 the services were extended further to their
family members.

It was only in 1973 that a health care service for members was
introduced.  It was the first prepaid health service in Colombia. 
However, it was only one component of the multi-service
activities of the co-operative, and other services continued to
be introduced and extended. Only in 1986 was the prepaid health
service complemented with a dental service. Thus in 1975 the life
insurance service was expanded into a comprehensive coverage,
termed "Solidaridad". This was a standard service, protecting
members and their families in case of death of the member,
temporary incapacity resulting from occupational causes, ill-
health or accident; as well as permanent disability.  It also
covered funeral costs.

In 1977 services were expanded to provision of housing and
educational tourism for members. In 1980 the housing co-operative
"Los fundadores" was organized, and in 1985 a residential unit
was constructed. In 1988 a programme designed to contribute to
the funeral costs of family members and dependants was
introduced. By 1995 insurance had been extended to civil
responsibility of doctors, and to property insurance.  Members
were insured also in respect to the continued education of
children in case of their death or incapacity.   

In 1978 the first step was made toward the geographical expansion
of the co-operative from the Cali region, with the opening of a
regional office in Medillin. By 1995 there were regional offices
and agencies in most parts of Colombia. As an expression of this
expansion the name of the co-operative was changed to Cooperativa
Medica del Valle y de los Profesionales de Colombia.

Thus in 1995 the co-operative could be characterized as a multi-
functional service co-operative owned by professionals and
designed to satisfy their socio-economic and cultural needs,
including social security and professional and entrepreneurial
development. Members were professionals with university or
technical qualifications, their spouses or partners and their
parents, their children or siblings, as well as employees of the
cooperative. Juridical persons - that is, enterprises - within
the public, co-operative and not-for-profit sectors could also
be members. The term "medica" in the name of the co-operative
refers to the fact that the original members were health
professionals, and not to the function of providing health
services, either to the community at large, or even to members,
despite the fact that health insurance was included in the
services provided. The advantages of co-operative membership were
those of bulk-buying of a wide range of insurance, including
health insurance, and other services.

By means of courses in co-operative management members have been
encouraged to participate actively in the direction and
administration of the co-operative. A health committee exists
within the Administrative Council, and within the administration
a department responsible for health programmes.

The specialized health insurance service subsequently developed
as a separate component: "PREPAGADA COOMEVA", still a user-owned
(or policy-holder owned) co-operative. These prepaid health
services, which formed part of the benefits of co-operative
membership, were provided to members by health professionals who
were themselves members. In 1994, 2,319 specialists and 934
general practitioners, 126 radiological laboratories, 340
clinical laboratories and 267 clinics, hospitals and medical
centres were part of the scheme, providing agreed services to
members.  These services were offered also to non-member users,
at higher cost. Arrangements had been made for provision of
health coverage of members when travelling outside Colombia.  As
of December 1994 the total number of users was 237,600, of which
144,000 were members: the annual change in membership, which had
been an addition of 10 per cent in 1990 and 1991 had slowed down
in 1992 and 1993 and declined in 1994.  The 144,000 members
constituted 15 per cent of the total covered by various health
insurance plans in Colombia as of December 1994 (960,000 persons
in 23 plans).  COOMEVA was in 1995 the third largest co-operative
enterprise in Colombia, the third largest service enterprise in
Colombia and the 144th largest enterprise overall.

The latest phase in the development of COOMEVA began in mid-1995
when, pursuant to Law 100 of 1993 on Social Security, social
security coverage was introduced for all Colombian citizens based
on the principles of obligatory membership but free choice of
provider. In addition to pension coverage in case of disability,
old age and death, and occupational health insurance, the General
System of Health Insurance established the conditions for access
by all to an Obligatory Health Plan (Plan Obligatorio de Salud:
POS) by the year 2000. Health coverage could be provided by
approved "Entidades Promotoras de Salud (EPS)." In these
circumstances the Cooperativa Medica del Valle y de Profesionales
de Colombia "COOMEVA" contributed 94 per cent of the capital of
a new entity "COOMEVA E.P.S., S.A." which could act as a provider
under the new Social Security Law. It began to function on 19
July 1995, providing both the basic coverage of the POS as well
as specific complementary services at moderate rates to persons
able to afford them.  The parent co-operative PREPAGADA COOMEVA
continued to provide services to its members and other users who
had higher incomes.   One purpose of this association with the
national health plan was to permit the continued generation of
employment and income of those members of the co-operative who
were health providers.

In September 1995 Unimed do Brasil reported that it had
encouraged and supported the establishment in Colombia of the
"Femec" health co-operative and worked in partnership with it and
a second health co-operative, "Unimec".  Presumably these were
provider-owned enterprises.

In India the only known provider-owned health co-operative is at
an early and tentative phase of its development: it is an
enterprise set up in the late 1980s by the 44 community health
workers who have been trained by the Community Health Committee
of the Self Employed Women's Association (SEWA) to operate, under
its professional supervision, to operate centres in villages and
urban slums.  The workers are themselves very poor, formerly
self-employed women. The purpose of their co-operative enterprise
is to increase the effectiveness of their mutual collaboration,
exchange of experience and training, thereby developing their
skills, and eventually generating resources to run a collective
programme.  The co-operative has become one of the occupation-
oriented worker-owned co-operatives which SEWA has promoted among
its union membership.113/  

In Malaysia a secondary provider-owned health co-operative
(Koperasi Doktor Malaysia Berhad (KDM)) was established by
doctors in July 1988 with the objective of protecting their
professional and socio-economic interests. This followed a
process which had begun in 1983 with the carrying out of a study
of health sector financing and with the announcement by the
Government in 1985 of its intention to privatize health care.  
The College of General Practitioners formed a committee to
examine the impact of privatization on its members, and the
possibility of setting up an organization to meet the new circum-
stances. During 1987 the option of a co-operative form of
organization was put forward, and meetings were held at the Co-
operative College with the Governments' Department of Co-
operatives and with the Malaysian Co-operative Insurance Society
Ltd. (MCIS). Initial discussions were begun also concerning the
possibility of setting up a broad national co-operative health
plan involving providers, insurers and consumers; the acronym for
which was KOSIHAT.114/   

While this proposal remained under consideration, an inaugural
meeting of the co-operative of providers (KDM) was held in March
1988. They felt it necessary to combine in a co-operative in the
face of a combination of circumstances: the commercialization of
the health sector, characterised by an aggressive private sector
providing health care services for purely profit motives and
concerned primarily therefore with cost-control; and the adoption
by the government of a policy of privatization of certain
components of the public sector health services, already very
substantially developed. Doctors felt that the commercialization
of health care threatened traditional relationships between
doctors and patients and between doctors themselves. They decided
to establish a co-operative rather than a private for-profit
company, considering that their objectives included service to
the community as well as to their own interests (which were,
perhaps, felt to be best served in the long term by inclusion of
the lower income strata within the effective market for health

The immediate task of the co-operative was to establish a Health
Care Provider Network throughout the Peninsular part of Malaysia,
whereby members' clinics could be linked with each other, and
with selected hospitals. This arrangement would be advantageous
to patients:  clinics would be able to standardize procedures,
reduce operating costs through bulk purchase and cost-sharing
activities, upgrade the quality of health care, provide
continuing care to patients, refer them to specialists and
hospitals where necessary, and continue to provide care after
hospitalization.  There would be advantages also for the
participating doctors: by establishing a network instead of
operating independently, it would be possible to develop closer
and more beneficial partnerships with hospitals and with

insurance providers.  

It was considered also (and perhaps most importantly) that co-
operative organization might result in preferred treatment by
Government as part of its privatization programme.  When the
proposed National Health Insurance Scheme was established,
members would be in a stronger position to be accredited for
reimbursement of patient care costs. The network would be in a
better position to negotiate contracts with corporations and
other major employers.  Finally, as a co-operative, it would be
easier to develop collaboration with other co-operatives and to
provide their members with health services at a discount on the
basis of mutual collaboration: this would increase the number of
users while at the same time benefitting co-operators otherwise
unable to afford full health services.  Significance was attached
to solidarity with other co-operative societies, with their
potential clientele of 3 million members: it was proposed that
such collaboration should aim at a Consumer Cooperative Health
Scheme at the national level.   

Individual members, through their clinics, would provide primary
care, with emphasis upon continuing promotive and preventive as
well as curative services at the primary level to individuals and
families, with whom a close and permanent relationship could be
established by collaborating doctors and nurses. It was
anticipated that financial benefits for members would result also
from their ability to obtain capital at affordable cost from the
accumulated assets of the co-operative. Their membership of a
national network would facilitate referrals to secondary and
tertiary care: facilitate the treatment of mobile patients; and
serve as a vehicle whereby quality and affordable care could be
provided to individuals and families on a fee-for-service basis,
as well as to those registered with insurance schemes and health
maintenance organizations on either a fee-for-service or
captation basis.   Such a Network would allow for the development
of a clientele with an established doctor/patient relationship
in preparation for introduction of the National Health Insurance

The Network would comprise clinics belonging to members, selected
specialists and private hospitals with which joint venture or
contractual arrangements would be made, government hospitals,
under-utilized government facilities which could be utilized by
members, as well as new community hospitals which would be
constructed where necessary, and common facilities such as
central diagnostic centres, day surgeries and  home nursing
services. Establishment of the network would be carried out in
phases, beginning with the upgrading and standardization of
clinics and development of additional services and facilities,
followed by introduction of bulk-purchase and cost-control
monitoring measures, and finally by development of new facilities
owned by the co-operative.

Membership was open to doctors in private practice and also those
in Government employment. Advantages were considered particularly
great for doctors working alone, although those already in group
practice would also benefit significantly.

The Health Care Provider Network was officially launched by the
Prime Minister in August 1991 and commenced operations in August
1991.  Later in 1991 and during 1992 a joint working committee
of KDM and Malaysian Co-operative Insurance Society (MCIS) began
examination of a health insurance package scheme for co-
operators, while a working group which included KDM, MCIS and the
Co-operative College examined possible mechanisms for the
organization of an alternative health delivery system for co-
operative members involving providers (KDM), insurers (MCIS) and
consumers (members of co-operatives).  The scheme was to be
designated "Pertubuhan Koperasi Kesihatan Malaysia Berhad -
KOSIHAT".  At a workshop held in October 1991 it was determined
that the purpose of KOSIHAT should be to provide a "health
component" within the co-operative movement, making possible
thereby an ethically acceptable means to provide health care to
co-operative members, as well as contributing to the professional
and economic welfare of provider members.   After consideration
of such aspects as membership, and democratic management through
appropriate representation of providers, insurers and consumers,
it was decided that KOHISAT would be set up as a secondary co-
operative, i.e. one whose component members would be KDM, MCIS
and the various co-operative organizations whose own members
would be consumers.

In September 1995 the Medical Co-op Committee of the Japanese
Consumers' Co-operative Union (JCCU) reported, on the basis of
its survey of health co-operative development in Asia, that the
Malaysian Doctors' Co-operative (KDM) had 472 members. Together
with MCIS, co-operative banks, consumers' co-operatives and
others already participated in KOHISAT, organized as a secondary
co-operative.  It operated hospitals, nursing homes, pharmacies
and homes for elderly persons.  

In Paraguay, it is believed that a provider-owned health co-
operative system, modelled on Unimed do Brasil, and receiving
some support from that organization, has recently been

In Spain a distinctive type of provider-owned health co-operative
system exists, in which members and owners are doctors, but
services are provided to a specific clientele which comprises
individuals and households who hold various forms of contract
with the provider co-operative.  It is characterized in Spain
itself as "a health service provider-owned and promoted but user-
oriented" a special form of "integrated health co-operative".116/

This type of health co-operative developed from what might be
described as a "pre-co-operative" situation.  For a long period
up to the 1930s and 1940s, a system was widespread whereby a
large number of potential clients within a community entered into
a pre-payment contract (sometimes monetized, sometimes in kind)
with a doctor.  The arrangement was known as an "iguala".   With
increased specialization in medicine and socio-economic changes
in many communities this system evolved into that of a more
sophisticated arrangement, known as an "igualatorio", in which
a group of doctors (some already in group practice, others
working independently) combined to offer their services to a
defined clientele on the basis of a more formal type of pre-
payment contract.   The first such "igualatorio" was set up in
Bilbao in 1934: however, the principal period of expansion was
delayed until the 1950s.

Not all doctors were interested in participating in this system. 
Those that did so were particularly interested in bringing about
an improvement in the health of those sections of the population
not covered by the then limited public health insurance and
health care system, but unable to afford private for-profit
health care.   Although still predominantly curative in
orientation, there was an element of emphasis on preventive
health care, within the "igualatorio" system even if achieved
only by means of the familiarity of doctors with their permanent
clients, and their families and communities. Although co-
operative enterprises were legal during this period, legislation
was out-of-date and its administration complex. Consequently,
most "igualatorios" took the legal form of an "autonomous
society", although they functioned essentially as provider-owned
health co-operatives. They transformed themselves into registered
co-operatives only after the adoption of new legislation in 1974. 
It may be presumed that some at least of members continued in
private practice outside the co-operative, whether or not within
a residual form of the "igualatorio".  Such co-operatives may be
considered a secondary common service network, rather than a
primary worker co-operative.

Although "igualatorios" existed throughout Spain, their
transformation into health co-operatives was particularly well
developed in Catalonia, and notably in Barcelona.   In 1957 an
"igualatorio" was established as an "autonomous society":
Asistencia Sanitaria Colegial, S.A..  Its share-holders - and
member-owners - were doctors who provided services through their
practices and clinics to "policy-holders" ("abonados/usuarios")
who made monthly pre-payments which gave them access to
professional services and referrals to hospitals at established
fees. There was in addition a fee-for-service element, but this
was at a reduced rate compared to that payable to doctors and
hospitals not within the "autonomous society".

In 1974, when it became legally and politically possible to
establish co-operative enterprises, the doctors who were members
of the Asistencia Sanitaria Colegial, S.A. established a
registered service provider co-operative, the "Autogestio
Sanitaria", 70 per cent of whose capital was provided by the
former.  Subsequently, they established, by means of capital
provided also by the Asistencia Sanitaria Colegial, S.A., a
legally distinct hospital co-operative, the "Sociedad Cooperativa
de Instalaciones Asistenciales Sanitarias (SCIAS)" in Barcelona. 
Health professionals who were the owner-members and service
providers of the Autogestio Sanitaria co-operative referred as
many as possible of their clients to the SCIAS hospital. 

In 1988 members of Autogestio Sanitaria who were interested
particularly in family medicine and community-based preventive
health established an additional and distinct provider-owned
health co-operative. Given that its members were also members of
Autogestio Sanitaria and SCIAS, there was close functional
collaboration between the three health co-operatives.   During
the 1980s and early 1990s branches of Autogestio Sanitaria were
established throughout Catalonia. In order to support the entire
system of health co-operatives a secondary co-operative, ELAIA,
was established, functioning as a type of holding and common
service enterprise.

During this period similar developments occurred throughout
Spain.  On the initiative of the Barcelona "igualatorio" a
national association of these associations was established in
"Asistencia Sanitaria Interprovincial (ASISA)". In 1976, after
an initial period of formation of provider-owned health co-
operatives by members of each of the "igualatorios", a national
level secondary co-operative "LAVINIA" was established, with
4,273 health professional members.  By 1988 membership within the
provider-owned co-operatives which were themselves members of
LAVINIA had grown to 19,396 and there were over 800,000 "policy-
holders" associated with these co-operatives as privileged
clients.  Although existing in all regions of Spain, the greatest
concentration was in Catalonia, where in 1988 there were 4,021
professional provider-members and 194,549 policy holders.

A final element of the national structure of health co-operatives
was added in 1982 when Autogestio Sanitaria and SCIAS in
Catalonia and the national secondary co-operative LAVINIA
combined to establish the Office for the Study and Promotion of
Health Co-operation (Gabinete de Estudios y Promocion del
Cooperativismo Sanitario). Subsequently, research in this area
was taken up by Fundacion Espriu, named in honour of Dr. D. Josep
Espriu Castello, the principal instigator of health co-operatives
in Catalonia as well as of the national level associations, and
the leading proponent of orientation of health services toward
the client as well as broad preventive measures designed to
achieve a healthy society. In 1995 the Fundacion Espriu is one
of the seven Spanish co-operative organizations which are
individual members of the International Co-operative Alliance,
and the only individual member of the Alliance which operates in
the health sector alone.

An apparently quite separate development in Spain has been that
of a provider-owned health co-operative whose services were
initially primarily dental, and which has been closely linked
with the worker-owned co-operative movement. In 1980 dental
technicians converted the private enterprise in which they were
employed into a worker co-operative: CES (Centro de Estudios
Sanitarios) Clinicas S.Coop.Ltda (or CES S. COOP).117/   The
founders sought to provide dental services by means of a co-
operative form of enterprise, particularly to low-income
communities within the Madrid region. Hitherto the public health
services provided only inadequate services, while private for-
profit dental services were too expensive for a considerable
proportion of the population. After 1985 economic expansion
brought about an increase in demand, the extent of control by
professional associations declined and co-operative legislation
was revised, allowing for larger and more diverse co-operatively
organized entrepreneurial activity. Consequently, the number of
clinics increased, existing ones were modernized and the services
offered were diversified from dental care to gynaecology, family
planning and provision of clinical tests. A secondary level co-
operative, SANITAS, was established to serve the primary co-
operatives.  By 1992 members of CES Clinicas S.Coop comprised
over 90 professional service providers. Its business strategy
included very high priority attention to managerial and
administrative efficiency and entrepreneurial activity.

Although provider-owned, a very strong interest in the welfare
of clients characterized the co-operative enterprise, and CES
Clinicas has participated very actively in the Workers' Co-
operatives Union of Madrid  (Union de Cooperativas Madrilenas de
Trabajo (UCMTA)): the Director General of CES Clinicas is
currently President of the Union.  Through this Union it
cooperates closely with the research and training activities of
the School of Co-operative Studies of the Complutense University
of Madrid. The Director General of CES Clinicas is also
Coordinator of a CICOPA-ICA programme for Latin America.  Through
a non-governmental organization engaged in assistance to
developing countries (Associacion para la Cooperacion con el Sur
- Las Segovias (ACSUR)), CES Clinicas has initiated a "Campaign
of Solidarity with the South", by which its clients are invited
to contribute an amount equivalent to one per cent of their
account with the co-operative, which is then matched by the co-
operative itself.   By this means support is given to an integral
rural community development programme in Nicaragua, a literacy
and occupational training programme for rural women in El
Salvador and a refugee support programme in Guatemala.

In the United Kingdom prior to the establishment of the welfare
state in 1948, health and social services were provided by a
mixture of philanthropic voluntary organizations, an expression
of paternalistic altruism; by state poor law institutions,
characterized by means testing and coercion; and by working class
self-help and mutual aid.

The latter took three organizational forms: "friendly societies",
co-operatives and trade unions. By far the most important was the
former, which aimed to provide as comprehensive a system of
mutual insurance as its members could afford and which
concentrated on sickness and death benefits, and, if members
could afford them, unemployment benefits and old age pensions. 
They also provided medical cover to their members, though usually
only in the form of payments toward doctors, surgeons or
apothecary's fees. For hospital services, members had recourse
only to facilities operated by philanthropic agencies or by the
"poor law guardians", an element of the contemporary system of
local government.

Co-operatives developed during the first half of the nineteenth
century as a specialized form of friendly society: for example,
the Rochdale Pioneers perceived their new society as an outgrowth
from the friendly society tradition, and registered under the
contemporary Friendly Society Act.  However, although consumer
co-operatives and trade unions provided some benefits to members,
and the co-operatives often provided them to their employees,
during the remainder of the nineteenth century, and upto the
establishment of the welfare state, direct provision of health
insurance and access to health care by the co-operative movement,
compared to the friendly societies, was insignificant.  There
were no co-operative enterprises established specifically to
provide health services.  Nevertheless, the total impact upon
health of the co-operative movement was very significant,
although indirect, acting through improvements in nutrition,
reduction in poverty, provision of holidays and sanitoria etc.

The establishment of the welfare state system in the late 1940s
completely interrupted previous arrangements, both those of the
co-operative sector and those of friendly societies. 
Consequently, there is little or no continuity between them and
contemporary experiments in the development of health and social
care co-operative enterprises, whether user-owned or provider-
owned.   However, these are trying to meet the same kinds of need
by means of similar organizational forms.  They have responded
to the health service and community care reforms of the late
1980s, which provided an opening for new forms of service
delivery agencies. The new co-operative enterprises are heavily
reliant on state funding, through the National Health Service in
respect to health care, and through income support payments for
care of the elderly. These enterprises are distinguished by
democratic control by users and potential users; they are
sensitive to the needs of users and providers; involve both in
the formulation of objectives and control over operations; and
encourage and facilitate commitment to quality of service. 118/ 

In these new circumstances several types of provider-owned health
co-operatives have developed.  The oldest established is the
"General Practitioner (GP) co-operative".  Members and owners are
family doctors (general practitioners) practising in the
community under the auspices of the National Health Service.  
Through the co-operative, which operates as an extended rota
system, members take collective responsibility for providing to
each other's patients (as well as their own) out-of-hours
coverage and care of consistent quality. They are mutually
responsible to one another.  Members make an equal financial
contribution to the co-operative: but are paid by the co-
operative only according to the number of hours they provide out-
of-hours care. If these are not very many, members may receive
less than they contribute: if sufficient hours are worked,
members may make a financial gain from their participation in the
co-operative.  Presumably some part of the contribution made by
members is used to employ staff to administer the roster and
respond to calls. The benefit to members consists of combining
with each other to fulfil one component of their obligations
within the National Health Service, thereby reducing their
individual costs and satisfying their client needs more

A second and newer type of provider-owned health co-operative is
the "Multi-Practice" or "Multi-Fund Co-operative".  Although
increasingly steadily in numbers, there are not yet many in
operation. Members are medical practices, composed of several
general practitioners, which receive an annual "fundholding"
management allowance from the governmental Family Health Service
Authority, from which they purchase medical and other services
at their own discretion. Member practices retain responsibility
for and control of their own budgets, but pay an agreed
proportion of their Fundholding Management Allowance to their co-
operative. This is administered by a committee comprising
representatives from all member practices, supported by paid pro-
fessional staff. It is used to co-ordinate member activities,
assist with the negotiation of contracts, with joint purchasing
and with sharing management and information systems, providing
general support and acting, as at least one such co-operative has
put it, as "a forum for the implementation and development of the
National Health Service in all its aspects".

A third type of provider-owned health co-operative in the United
Kingdom comprises a small number established by practitioners of
complementary or alternative therapies (these might be designated
as "Complementary therapy health co-operative").  Practitioners
in such fields as hypnotherapy, aromatherapy and acupuncture join
to establish a co-operative in order to reduce the overheads of
individual practices.  Their co-operative may provide premises,
a receptionist and booking services and joint insurance, enabling
their services to be made available more cheaply and thereby
allowing more people to have access to them.119/  

In the United States co-operatives owned by dental professionals
have appeared during the last two decades.  One of the oldest,
established in 1981, and the largest in the North-eastern region
of the United States is the Northeast Dental Plan of America, a
"Preferred Provider Organization" or network of over 3,000
private dentists with headquarters in New York.  Provider-members
benefit by an increased patient volume and stability.  The 10,000
"enrolees" benefit from an estimated 50 per cent reduction on
normal dental costs. 120/ 


Social care co-operatives of this type are known to exist in
Myanmar, Sweden, the United Kingdom and the United States.  It
is very probably that they exist elsewhere also.  In Myanmar,
according to a communication received from the ICA dated 26 April
1996, the Sandidaewi Health Care Women's Co-operative was set up
in Yangon in June 1995 by 20 retired nurses, each of whom had
contributed 100,000 kyats to the share capital. The purpose was
to safeguard and extend the professional and financial status of
members.  The co-operative was to establish a poly-clinic and
special nursing centre, provide health education programmes,
undertake training courses for nursing aides, provide home care
for elderly persons and set up a day nursery school.  As of April
1996 the co-operative had only put into operation the latter
activity: other intended activities were still at the planning
stage.  About 50 children aged between three and five years
attended the nursery. It had already achieved a good reputation
and the number of parents applying for places exceeded current

In Sweden a recent development has been the establishment of co-
operatives which have been described as "interested parties
partnership" because both service providers and users and also
third parties, including local government authorities and other
institutions responsible for financing the operation, are all
members.121/  They provide social care services now being
transferred from the responsibility of local governments to the
private sector. Also significant recently has been the
establishment of small worker-owned production or service
provision co-operatives the majority of whose members are persons
with disabilities: disabled persons special work-place co-

In Sweden in the early 1990s local governments, responsible for
most social care programmes, were becoming particularly
interested in co-operative modalities for the organization of
these services. They perceived co-operatives as an alternative
to private contractors. In 1991 policy changed also in respect
to provider-owned co-operatives, which were allowed for the first
time.  Day-care and nursery school co-operative programmes and
opportunities expanded as a result. By September 1995 there were
129 provider-co-operatives, whose owner-members were nursery
school teachers.

As of September 1995 there were about 200 professional provider-
owned co-operatives in combined health and social care service
sectors.  Although still relatively few, partly because of the
lack of a worker-owned co-operative tradition in Sweden, there
had occurred since 1990 a significant expansion in numbers.  
Most professional member-owners had worked previously in the
public health and welfare system. They either transformed their
previous institution or facility from its status as an element
of the public sector into a co-operative, or set up an entirely
new enterprise, organized as a co-operative. Usually, the co-
operative worked on the basis of a contract with the municipality
and county council whereby it provided services to persons who
were beneficiaries of central or local government health and
social security payments. They did so in order to gain greater
influence over their professional work, have the chance to
provide a better quality of services, an opportunity to choose
colleagues with whom to work, and escape from bureaucratic and
substitution of more flexible forms of administration.   It
appeared that these new provider-owned co-operatives had
functioned well, and had satisfied the objectives of their
members. They were appreciated also by their users, with the
result that there existed a large demand for their services.

From 1991 in Sweden it became possible to set up provider-owned
co-operative day-care centres.  During the next few years there
occurred a rapid increase in this type of co-operative: by 1994
there were about 100, of which over 40 were in the county of
Stockholm. Many had been operated previously by local
governments. They were taken over by the professional staff,
preschool teachers who saw an opportunity to expand their
professional experience, including greater responsibilities.  
The organizational transition had been eased by their being
granted leave of absence by the local government, retaining the
option of being re-allocated to other positions if they chose not
to remain with the co-operative.  Local government authorities
authorized the placement of children in the co-operatively
organized day care centres at the request of parents: however,
in some cases they did not permit such co-operatives to enrol all
those children whose parents wished them to enter the co-
operative.  While placement regulations vary between
municipalities, not all authorities have been favourable to this
type of co-operative. 122/  In some cases member-providers of day
care centres have competed successfully with private for-profit
enterprises for taking over institutions and programmes being
privatized by local government departments.  In some, parents
were also members.  Since 1994 expansion has come to an almost
total standstill, due to a change in local government policies. 

Also in Sweden in the early 1990s a number of local governments
encouraged and supported the transfer of various types of social
care institutions to the staff working in them as provider-owned
co-operatives.  This was the case of the Thamstorp convalescent
home for mildly mentally ill persons, formerly operated by the
Goteborg Health Authority. In Karlstad the Grasdalen Service Co-
operative provides a range of social care services previously the
responsibility of the local government. There exist also a number
of provider-owned nursing home co-operatives.

In order to support the transfer process, in which an increasing
number of local government authorities have become interested,
but concerning which there is little experience of the
managerial, legal and personnel developmental processes involved,
help has been provided by regional co-operative development
centres supported by a national Co-operative Council.  Although
established prior to the period of establishment of social care
co-operatives, and with different functions, the co-operative
development centres played an important part in the process. 
They provided free information and consultation to groups
interested in setting up co-operatives in the health and social
care sectors.  However, following the reversal of policies with
respect to privatization and co-operativization, neither their
mandate nor their funding allowed these centres to engage in
further promotion of provider-owned co-operatives in the health
and social care sectors.

The relatively short period of experimentation and growth which
took place during 1991-1994 in the context of an ambitious
programme of privatization adopted by the then conservative
government (but one which did not achieve its goals and was not
in fact seriously pursued by the administration) came to an end
with the return of a labour government to power, which shelved
the whole idea.  Unfortunately, as a result of the earlier
initiatives, further expansion of co-operatives in this sector
had become associated with retrenchment in the public sector and
"privatization", a process no longer viewed with such enthusiasm
as previously.  Consequently the interesting and normally
successful pioneering experiments failed to stimulate any further
development of co-operatively organized approaches, and now
remain as rather isolated institutions in their respective

Employees of local government social care departments have been
motivated to establish co-operatives in order to control better
their own professional and occupational environment, to have
closer contact with users, in part by avoiding bureaucratic
intermediaries, and thereby allowing more flexible approaches to
client needs and hence to provide better services. They perceive
the co-operatives of which they are members to be entrepreneurial
ventures making possible their personal and professional

An example of a provider-owned co-operative set up by
physiotherapists is that of Kuling, situated in the small town
of Lysekil on Sweden's west coast.  Started in 1993, it consisted
in 1995 of 11 women - physiotherapists, nurses and a
secretary/financial administrator - who had previously worked for
the county council.  The co-operative offered many kinds of
physiotherapy for patients from rehabilitation centres, nursing
homes and the local health-care organisation. The initiative for
starting the co-operative had come from the group itself and was,
from the beginning, supported by the county council.  The members
wanted to function independently of the large county council
which they viewed as an obstacle to their daily work. Starting
the co-operative meant that they could organise and develop their
own ideas and working methods, as well as types of medical

The group members prepared themselves in different ways for the
"takeover".  They had to learn more about preparing budgets,
about financing and about other aspects of managing an
enterprise.  They also had to develop a completely new
relationship with their former employer.  It was important to
know something about making contracts, so they engaged a lawyer
to support them in negotiations with the county council and the
municipality. Discussions, preparations and negotiations took up
to five years, and by the time they started the group had signed
three contracts - two with different units of the county council
and one with the municipality.  The contracts basically stated
that the co-operative would provide the same volume of treatment,
but for 10% less cost. The Kuling co-operative had to keep track
of the number of services performed, and the principals agreed
to compensate them accordingly, although an upper limit was

In 1994 the co-operative achieved a very good result and,
compared to the time they were associated with the county
council, costs had been reduced by 10%.  By November 1994 they
had reached the agreed performance limit, but continued to treat
patients during December, without payment from the council. 
Despite this, the surplus income for the co-operative was the
equivalent of about 52,000 pounds sterling, a majority of which
has been reinvested in the business with part being distributed
to the members as a divided.  The co-operative was confident that
its contracts would be renewed, since everyone involved - the
patients, the county council, the municipality and the co-
operative - seemed to have benefited.After two years, in 1995,
members felt that they had fulfilled their goals.  Everyone had
tried to broaden their skills, and everyone was responsible for
some aspect of running the co-operative.  The former secretary
had developed a new role and had become responsible for
everything concerning the enterprise's economy.  The co-operative
had invested in education and further training for members.  In
the near future they planned to begin offering treatment for new
groups of patients, such as those with heart disease. 124/

In the United Kingdom, provider-owned social care co-operatives
have been set up largely due to changes in regulations governing
"care in the community".125/ These have required local government
authorities to provide care to vulnerable members of the
community, but to do so by purchasing from the "independent"
sector rather than providing care directly. These changes have
produced a new market, in which "community care co-operatives"
owned by providers, have increased significantly in numbers.  

Co-operatives of this type provide social care to the elderly and
to persons with disabilities - help in cleaning, washing,
dressing, shopping and providing company and social contacts.  
Some employ qualified nurses, but this is not the norm.   Most
is domiciliary care, that is care provided to persons in need in
their own homes.  Most co-operatives receive part of their income
from local governments, part from client's private resources.  
Most operate as agency co-operatives providing central
administrative, marketing and co-ordinating services to members
who are self-employed. Others are "worker-co-operatives",
entering into contracts with clients and employing carers
directly.  Some provide day care facilities with supervised
leisure and educational activities and meals. There are
significant differences between "agency" and "worker" models in
terms of liability for income and sales taxes and social security
contribution, which result in different operating costs.  There
were an equal number of user-owned and provider-owned child care
co-operatives.  A number of aid centres for women and children
seeking refuge from domestic abuse were operated as co-operatives
owned by staff and volunteers. 

For example, a provider-owned home care co-operative was
established at Walsall, Staffordshire, in 1989, with advice from
the local co-operative support organization. Members provide
social care, not nursing care, for persons of any age in their
own homes: users included persons with physical and mental
disabilities, elderly persons and mentally ill persons.  Care
providers owned the co-operative, to which they paid a commission
on their care work.  Some clients paid by means of public
benefits: care for others was financed through contracts with the
social services department of local authorities.  By 1995 there
were 170 members, all care workers. The co-operative employed
five administrative staff who received referrals, made
assessments and put care workers in touch with clients.   They
also monitored care workers, maintained quality control of
services, and provided advice, support and training.  
In 1993 it was reported that there were increasing numbers of co-
operatives providing care, particularly home care, with some
concentration in the West Midlands (Staffordshire and
Shropshire), Hull and Scotland.  There was one residential care
co-operatives, as well as those providing sheltered employment
and training.  In Shropshire the Wrekin Home Care Co-operative
and two to three others were small home-care co-operatives. 
There were between 30 and 40 childcare co-operatives.  

In the United States the first day-care co-operative was
established in 1916: by 1994 about 50,000 families were
members.126/  Provider-owned social care service co-operatives
have expanded considerably in recent years. One of the largest
is Co-operative Home Care Associates (CHCA), a co-operative of
home aides based in New York City, which has had a great impact
on the level of care available in many local communities.  Co-
operative Home Care Associates (CHCA) is one of the largest home
health-care service providers operating in New York.  It was
established in 1985 by the Community Service Society of New York,
largely through the initiative of the then Director of a
community economic development agency, R. Surpin.  His research
had revealed an annual rate of growth of 20 per cent in home
health care, a result of health policy changes which favoured
returning patients to their homes from hospitals as quickly as
possible.  Most care providers were employed by temporary
personnel agencies on a part-time, low-wage basis.  There was
limited supervision, a high employee turnover, and high levels
of user complaints.  

By the end of 1995 CHCA employed 300 home-care providers, who
were mainly African-American or Hispanic American women.  Most
were single parents. Eighty percent of workers were formerly
themselves on welfare. Emphasis was given to selection and
training.   Only one in four applicants were selected.  Eighty
per cent of these completed the three-month entry level training
period and eighty per cent of these survived the crucial first
six months of work. Turnover was 20 per cent, half the average. 
Advanced training was also provided.

After the three-month trial period workers could become an owner-
member, building up a $ US 1,000 equity investment through small
weekly payroll deductions.  Voting rights began after equity
reached US $ 50.  Workers received hourly wages 16 per cent
higher than the average: combined with health benefits, sick
leave and paid holidays these were the best conditions available
in the industry.  As a result of the attention to training,
standards of reliability and competence were high and patient
complaints low.

The experience of CHCA had been so positive that it was being
promoted as a model by the Industrial Cooperative Association of
Boston, an organization which supported worker-owned co-
operatives of all types.  Similar home-health care worker co-
operatives have been set up in 1993 in Philadelphia, in 1994 in
Boston, and in 1996 in the Mid-west. Similar co-operatives, begun
independently, have operated since 1992 in Waterbury, Connecticut
and in Chapel Hill, North Carolina.127/


Provider-owned health (medical) co-operatives, by definition,
have been founded and developed, and subsequently owned and
operated, by health professionals. They have tended in
consequence to restrict their activities to health, including
preventive measures and "social medicine", but not to extend this
to purely social care programmes which may fall outside the
central professional concerns of the members.  None of the
provider-owned health co-operatives included in the review
extended their functions to social care.


In Portugal co-operatives at the secondary level are well
developed.  They act as group purchasing and common service
provision networks, each within a defined region, and are owned
by independent pharmacies.  In 1993, out of the 100 largest co-
operative enterprises of all types defined in terms of sales,
they occupied fourth, sixth, eighth and tenth places.  The sales
of the largest four was equivalent to US $ 400 million, and they
employed 649 persons.128/

In the United States independent neighbourhood pharmacies have
been subject to intense competition from chain drugstores, mass
merchandisers and supermarkets able to attract customers by means
of the large amounts of capital they can invest and their very
low prices. As a result, an estimated 1,000 such pharmacies went
out of business during the two years 1992-1993.  In order to
remain competitive, independent pharmacies have formed purchasing
co-operatives such as United Drugs in Phoenix, Arizona, which
supplied 450 pharmacies in 11 States, and the Independent
Pharmacy Co-operative in Wisconsin, which supplied 400 pharmacies
in four States.   Others have joined marketing co-operatives such
as the Valu-Rite Group, which had 4,600 member pharmacies in

     CO-OPERATIVES [TYPE 1.4.1] 

Only one example of this type of co-operative was found in the
literature. There were early in 1996 in the Province of Quebec,
Canada, five worker-owned and operated ambulance service co-
operatives (Monteregie, founded in 1987; Metropolitan Quebec,
Mauricie and Outaouais, founded in 1989; and Eastern Quebec,
founded in 1990).  The largest was located in the Montreal region
(south of the St. Lawrence River). It included more than 200
worker-members with 30 ambulances. In 1992 these five co-
operatives accounted for 13 per cent of the emergency
transportation market within the Province.  About 90 to 95 per
cent of funding was provided by the provincial health service
system (RRSSS), with which the co-operatives had contracts.   The
remainder consisted of fees charged to private users. 
Considerable attention has been given to professional training,
strategic planning and education in co-operative forms of


In the Province of Quebec, Canada, a secondary health service
support co-operative (La coop‚rative du service r‚gional
d'approvisionnement: CSRA) provides bulk purchasing services to
over 60 public and other hospitals, clinics and other health
facilities in the region between Montreal and the city of Quebec
(region Mauricie/Bois-Francs).  This co-operative originated in
an informal grouping of a number of facilities for bulk
purchasing purposes.  It was established in 1980.  As the volume
of financial transactions expanded, it was considered necessary
to adopt a recognisable juridical status, and, with advice from
a development counsellor of the F‚d‚ration des caisses populaires
Desjardins du Centre du Qu‚bec, a co-operative organizational
form was adopted.

The co-operative negotiates on behalf of its members the purchase
of a wide range of inputs: heating oil, maintenance products,
office supplies, laboratory equipment and material.  It was in
1996 negotiating recycling of certain materials and was exploring
new areas of common benefit, such as supply of natural gas and
maintenance of laboratory equipment. In 1989 health facilities
in the region made purchases amounting to 53 million Canadian
dollars, of which 27 million were handled through co-operative,
providing a saving of 3 million dollars to members.  In 1993 the
co-operative made an estimated savings of 4 million dollars on
the purchases of members, 50 per cent of which were made through
it.  Early in 1996, on the basis of its success in providing
services to facilities in the health sector, the co-operative was
considering expanding to provide similar services to other public
and community organizations, such as schools. 131/ 

In the United States, secondary co-operatives of this type (bulk
purchasing, common services, specialist labour- and worker-co-
operatives) are well developed. They are termed "Shared service
organizations". They are owned by non-cooperatively organized
health sector institutions, both private for-profit and not-for-
profit.  In 1990 there were 127 hospital networks or consortia,
40 of which had been established during the previous three years. 
There are also numerous networks of health centres.  However,
probably only a small proportion are organized as genuine co-
operative enterprises.  In predominantly rural regions there were
in 1990 about 30 networks of health care providers - mostly rural
hospitals - of which six were organized as co-operatives.   These
included the Rural Wisconsin Hospital Co-operative and Synernet. 
In 1994 the largest hospital purchasing co-operative was that
established by the Voluntary Hospitals of America, which in 1993
began to form regional co-operatives within its membership.  An
additional 12 were non-profit corporations organized in a similar
manner to co-operatives. The remainder were described as "tied
regional networks", alliances organized and supported by large
urban hospitals which often paid the general operating expenses
of the network, and provided services to its rural networks on
a fee basis.  

Hospitals formed co-operatives to buy supplies at lowest prices,
and to maximize purchasing power on expenditures such as
laboratory products, food, film, pharmaceutical, fuel oil and
other goods.  These items usually constituted one-third of a
hospital's budget. The rural hospital co-operatives were seen by
their member institutions as self-help organizations: they
believed that hospitals working together could achieve results
which were not possible if they operated alone. They relied on
the application of their own capital for setting up the co-
operative and were willing to pay dues to it until fees earned
by its provision of up-graded services could support
administrative costs. Each of the co-operatives had an average
of 17 rural hospital members: the average number of employees was
9 and annual budgets averaged a little less than one million US
dollars.  Services offered to members included management support
and consulting; training; shared services in areas such as
biomedical equipment maintenance, physician recruitment,
purchasing, computer systems and telecommunications; major
equipment sharing; sharing of allied health professionals;
insurance; joint contracting with third-party payers (insurance
companies); and joint loan financing. 132/
The Rural Wisconsin Health Cooperative is owned and operated by
20 rural hospitals and one urban university hospital.   It was
established by several hospital administrators in southern and
central Wisconsin as a shared service corporation and as an
advocate for rural health.  Services provided to the member
hospitals are based on written contracts between them and the
cooperative: however, with some limitations, the member hospitals
are not required to buy services solely through the co-operative.

In 1995 it had over 150 staff or contracted professionals whose
function was to provide services to member hospitals in such
areas as advocacy; audiology; quality improvement initiatives,
including multi-hospital benchmarking; obtaining grants;
occupational, respiratory and physical therapy; per diem nursing; 
physician "credentialling"; speech pathology; emergency room
physician staffing; and continuing education. The co-operative
has negotiated special group contract arrangements by which
members can obtain high quality consultant services in areas such
as legal services, personnel consulting, market research, patient
discharge studies and consultant pathology services.
The co-operative intends in the short-term to develop further a
pool of administrative specialists to work with community-based
professional practices to help them to be successful in a managed
care environment; to identify and coordinate linkages that will
enable providers to meet the needs of patients; to provide shared
services such as per diem support clinic staff and locum tenens
coverage; and to ensure access to malpractice insurance discounts
typically available only to large group practices.

The co-operative has been a vocal advocate of improvement in
rural health service provision, helping establish the Wisconsin
Rural Health Development Council and working with other hospitals
in New York, Philadelphia and Phoenix to implement the Hospital
Research and Education Trust's Community Health Intervention
Project. 133/ 

Syernet, Inc., is a co-operative whose members are 16 hospitals
in Maine and New Hampshire. It evolved from a consortium known
as the Southern Maine Association of Cooperating Hospitals,
formed in the late 1970s.  This had been formed for group
purchasing of medical equipment, but the co-operative now
provides a wide range of services, while continuing to expand its
purchasing functions.    

This co-operative was considered by its members to be an
appropriate organizational response to a changing environment,
particularly in rural areas.  Rural and community hospitals have
been faced with trying to achieve economies of size in adopting
new technologies and delivering care.  Emerging managed care
systems and integrated delivery systems are challenging smaller
to mid-sized hospitals to develop systems and approaches to
remain economically viable.  Significant developments in new
diagnostic and treatment technologies have required hospitals to
continually invest in state of the art technology.  Keeping up
with the need to purchase equipment, train technicians to operate
and maintain equipment and adjust to the competitive environment
has particularly affected smaller to mid-sized hospitals.  

The co-operative offers a capital equipment program,
comprehensive biomedical equipment services; employee benefits
purchasing and administration; worker's compensation services and
purchasing arrangements for a range of products including fuel
oil, food, office furniture and medical supplies.  Member
hospitals have seen cost savings from gaining economies of size
in purchasing a wide range of products and services.  Purchasing
contracts are negotiated on behalf of members through regional
and national vendors.  Member hospitals use group strategies to
learn about and assess changes in a dynamic health care industry.

The co-operative has established a self-funded trust for workers
compensation insurance.  This serves 25 organizations with 4,000
employees.  The group's annual payroll exceeds $84 million. 
Member hospitals can participate also in buying employee
benefits.  With over 4,000 employees, they can increase their
purchasing power.  Benefits administration, legal compliance
consultation and enrolment assistance are also provided.  A
subsidiary offers hospitals, doctor's offices and other health
care providers comprehensive biomedical equipment services. 
Services include preventive maintenance, repair, testing,
consultation and 24-hour emergency services.  Custom research and
education projects are developed and delivered to members such
as educational materials lending library, training programmes,
regulatory compliance research and performance benchmarking. 134/


There have been a number of early examples of such forms of
cooperative organization.  In China, in the early 1940s owners
of small enterprises in Shanghai combined to establish co-
operatively organized clinics. The first was established in 1942,
the number increasing to three the following year.  By 1946
services were provided to 10,000 workers employed by 476 member
enterprises.  A central body, the Shanghai Co-operative
Industrial Hygiene Centre was formed for common administration:
membership fees were made uniform.   A co-operatively owned
hospital was set up in 1943.  Educational and preventive measures
were organized, including inspection of sanitary conditions in
work-places and nutrition education of workers.  135/ 

     OPERATIVES [TYPE 1.5.2]

In the United States, employers - particularly large enterprises
- have for some decades provided health benefits to their work-
force through group health insurance plans negotiated with
regional and national insurers for services provided by local and
regional health service providers, whether co-operative and non-
co-operatively organized  Recently, such employers, including an
increasing number of small employers, have combined to establish
"business-sponsored health care purchasing co-operatives".   By
this means they maximise their purchasing power, providing their
employees with affordable high quality care and a wide range of
services.   For example, in 1994 the Business Health Care Action
Group of Minneapolis bought health care for the 100,000 employees
of 14 large enterprises in the Minneapolis region.  The Colorado
Health Care Purchasing Alliance in Denver, founded in 1988, had
500 members in 1994. In Seattle the Health Care Purchasers
Association, an alliance of employers, created the Employers'
Health Purchasing Co-operative, representing 240 enterprise
members with more than 300,000 employees and dependents,
including some of the largest employers in the State of
Washington.  Its function was to buy health coverage on behalf
of member employers.136/

During the recent public discussion of health care reform at the
highest national levels in the United States the National Co-
operative Business Association, the apex co-operative
organization, endorsed the concept of co-operative health
alliances before the Small Business Committee of the House of
Representatives, provided that these were structured as user-
owned health co-operatives, and not as governmental regulatory
agencies. 137/ 

Initial discussion at the federal level on reform of the health
sector had included consideration of health purchasing co-
operatives sponsored in part by Federal and State governments. 
Although no longer a central component of proposals at the State
level a considerable number of States (20 by August 1994) have
passed legislation that promote state- or employer-sponsored
health insurance purchasing co-operatives.  At that time the
total of employers already members of such co-operatives had an
aggregate labour force of over 10 million. California, Florida
and Washington were experimenting with State-sponsored health
insurance co-operatives for small employers. A national
association had been set up in Washington D.C. - the National
Business Coalition on Health.   

Very large employers, in some cases acting on behalf of numerous
subsidiaries and associated enterprises,  were joining such
purchasing co-operatives, but they were of particular relevance
as a solution to problems faced by medium- and small-sized
employers who had not been able to afford adequate health
insurance coverage for their labour force.  Very considerable
reductions in costs had been obtained by group purchasing
arrangements and the ability to choose between competing
insurers.  Participating employers included both private for-
profit enterprises and public sector agencies.  For example, in
Racine, Wisconsin three large self-insured employers had joined
with three public agencies (the city and county governments and
the school system) to create a health insurance purchasing co-
operative. Although employees participating in such group health
insurance programmes were able to use doctors and hospitals of
their choice, it was to be expected that the purchasing co-
operatives would develop an interest in assuring acceptable
treatment.  This had not extended to establishing their own
facilities as yet, but some initiatives had been taken already
in this direction.  For example, in Tampa, Florida, an Employers
Purchasing Alliance had supported an increase in State sales tax
to finance the 24-hour operation of primary care centres.138/ 

In March 1991 a further form of health insurance purchasing co-
operative was incorporated: although by early 1995 it was still
not yet in operation, as a result of the complexities of setting
up an inter-state business.  However, its purpose is relevant to
the issue of bringing together in a single system health-service
providers, users, insurers and others.  This was an enterprise
named JustCare, based in Boulder, Colorado. Its function would
be to bring together buyers and sellers of healthcare in networks
within each State, linked by a national electronic claims-
processing and payment system.  It was organized to facilitate
the purchase and sale of products and services on behalf of
members admitted only on a co-operative basis.   There were three
provider membership categories, three purchaser categories and
an adjunct services component responsible for management,
accounting, legal and banking companies. Different providers of
varied type would be members in each of the States in which the
co-operative would operate. In California, for example, the
provider would be the California Federation for Medical Care, a
San Francisco based network of doctors legally defined as an
"agency co-operative".  This would be the first time in the
United States that members of a co-operative would include both
providers and users of health services. It was intended to
develop a health care credit card to be used with an electronic
claims submission and payment system, possibly to be operated in
partnership with a specialist credit card bank. It was projected
that there would be 100,000 card-holders by the end of 1995, and
five million by 2000.   Payment for operational expenses would
be obtained through transaction fees on claims. Start-up costs
had been funded privately.139/  


As is shown in Table 2 it would seem that of the at least
52,220,000 persons who are users of health co-operatives about
25 per cent are served by provider-owned health co-operatives. 
The largest national groups of users are those in Brazil
(8,000,000), Spain (4,000,000), Colombia (576,000), Chile
(538,000) and possibly Malaysia (2,500,000).140/