Co-operative Enterprise in Health and Social Care

    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
                         July, 1996

Source : Review of International Co-operation Vol.89, No
1/1996, 76-81.

       Co-operative Enterprise in Health and Social Care
                    by Michael Stubbs*

          A Lesser Known Contribution to Societal Well-being

Co-operatives for Better Health
Co-operatives of many types already play an important role in
the improvement of health and social well-being in many
countries. They have very considerable, and still largely
unrealized, potential for contributing not only to their
members' goals, but to international objectives in health and
social care.

User-owned health co-operatives are established, owned and
controlled by their members in order to secure effective and
affordable health insurance and services for themselves and
their dependants. At first they may function solely as simple
mutual health insurance funds. Later, they may make agreements
with designated providers, then set up their own facilities
and employ their own staff, expanding and diversifying their
services by means of alliances with other health facilities.
They may offer group health insurance service programmes to
employers responsible for coverage of their employees. They
are most widely developed in the United States, but are
significant also in Canada, India and Sri Lanka. Smaller
numbers, often recently established, exist in Bolivia, Panama,
Philippines, South Africa, Sweden and the United Republic of

Of rather different origin are health co-operatives which,
although autonomous, are established as a benefit of
membership in broad co-operative movements. In Japan many
members of the consumers' movement have set up health
co-operatives supported at national level by the Medical
Co-operative Committee of the Consumer's Co-operative Union.
Members of multi-functional agricultural co-operatives benefit
from health services organized by their co-operatives, and
supported at national level by the National Welfare Federation
of Agricultural Co-operatives. In Israel - at least until
1995, when the system was fully nationalized - all members of
Hevrat Ha'Ovdim, the co-operative system which operated in
parallel with Histadrut, enjoyed comprehensive health services
provided by a specialized subsidiary.  In Singapore also
health co-operatives have been established by the National
Trade Union Congress.  Uniquely, in Brazil, the national
system of provider-owned health co-ops. Unimed, recently began
to sponsor user-owned health 
co-operatives, associated with it through individual and
enterprise-based contracts.  As of mid-1995, about 39 million
persons obtained health services from the various types of
user-owned co-operative.

Provider-owned health co-operatives are established, owned and
controlled by groups of health professionals. Those operating
at the primary level exist in Argentina, Benin, Bolivia, Costa
Rica, Germany, India, Italy, Mongolia, Poland, Portugal and
the United States. More widely developed are secondary level
co-operatives functioning as networks of independent
providers, themselves often already organized in group
practices. These exist in Brazil, Chile, Colombia, Malaysia,
Paraguay, Spain and the United Kingdom. By far the largest,
Unimed, operates in Brazil where its membership of 73,000
doctors constitutes one third of the national total. As of
mid-1995 about 13 million persons obtained health services as
holders of individual and group contracts with this type of
health co-operative.  

Jointly-owned or multi-stakeholder health co-operatives exist
only in small numbers in Spain and the United States. 
However, in many user-owned co-operatives medical staffs enjoy
autonomy in professional matters and are separately
represented on boards of directors.  

Health insurance and services provided by co-operative
enterprises and organizations in other sectors are a
significant benefit of membership or employment. In some cases
only insurance is provided: as by the Mondragon Co-operative
Group in Spain, administered by a specialist subsidiary,
Seguros Lagun-Aro.   More widely, members and employees, and
their dependants, have access to health services operated
directly by the co-operative enterprise. In former socialist
countries, some consumer-owned co-operative organizations have
retained a specialist health service department, often
referred to as a "medical co-operative".   

Occupational health is a priority concern in production and
service provision co-operatives whose worker-members
constitute much of the labour force. Supply, common service
and purchasing co-operatives promote safe working methods and
inputs among their member enterprises. Retail, utilities and
housing co-operatives promote safety in the home.

Co-operative insurance enterprises, usually owned by
co-operative organizations on behalf of their own members, and
in some cases jointly with trade unions, provide personal
insurance products which are significant means to reduce
emotional and financial stress. In addition, in 1995, 18 of
the 72 full members of the International Co-operative and
Mutual Insurance Federation (which represent over 150 active
insurance companies in over 40 countries) offered health

Many health co-operatives include pharmacies - usually
restricted to supply of prescription drugs - among their

Primary level co-operative pharmacies, established by
consumers as a special form of retail co-operative, but
usually providing additional health promotion, prevention and
educational services, are well developed in Europe. They had
in 1994 30 million members and a market share of about 10 per

Pharmacy departments exist within the supermarkets operated by
consumer-owned retail co-operatives in a number of countries.  
In the United Kingdom, for example, National Co-operative
Chemists Ltd. is a secondary co-operative owned by 25 primary
consumer-owned retail co-operatives with 230 pharmacy outlets. 
In Singapore a pharmacy chain operates within co-operative

Secondary co-operative networks of pharmacies, set up by
independent for-profit pharmacies in order to undertake bulk
purchasing, common service and marketing functions, are widely
developed in the United States: for example, in 1994 the
Independent Pharmacy Co-operative in Wisconsin had 400
members.  Similar enterprises exist in Europe: in Portugal,
for example, they occupied in 1993 fourth, sixth, eighth and
tenth places among the 100 largest co-operative enterprises. 
Many health co-operatives provide, as an extension of their
preventive, "healthy living" and community outreach programmes
a wide range of services to persons with disabilities or at
risk of self-injury through substance abuse, as well as to
adolescents, single mothers and elderly persons.

In addition, user-owned social care co-operatives set up by
persons with disabilities and by elderly persons, include
residences, day-care centres, home-care services and protected
work-places.  Some are highly innovative: in the United
States, for example, the United Seniors' Health Co-operative
in Washington D.C. operates computerized information systems
which assist members to ascertain their eligibility for, and
then apply to, public or private assistance programmes. 

Joint user - and producer - (and other stakeholder) social
care co-operatives are frequent: they often include local
government, trade union, philanthropic and voluntary
organizations. They are best developed in Italy, where in 1995
there were about 2,000, serving several hundred thousand
persons, employing 40,000 staff and absorbing about 13 per
cent of public expenditure on health and social care.
Provider-owned social care co-operatives have increased
rapidly in some countries, such as Sweden.  

Co-operatives directly engaged in providing health and social
care services may be supported by other types of co-operative
enterprise. Health sector operational support co-operatives
are owned by hospitals to make bulk purchases and provide
common services. They are best developed in the United States
where, for example, the Rural Wisconsin Health Co-operative is
owned by 20 rural hospitals and one urban university hospital.
In Quebec, Canada, a "cooperative du service regional
d'approvisionnement (CSRA)" is owned by 60 hospitals and

Worker-owned health sector supply co-operatives manufacture
special inputs or supply services.  For example, in 1992 five
ambulance co-operatives provided 13 per cent of emergency
services in the Province of Quebec, Canada. Labour-contracting
co-operatives provide building maintenance, catering,
cleaning, security, and other services to health facilities,
or act as employment agencies for their members.

Research, Development & Promotion
Co-operative research and development organizations and
associated departments in universities promote policy
development and operational efficiency.  The Gabinete de
Estudio y Promocion del Coopertivismo Sanitario in Argentina,
the Espriu Foundation in Spain and the Centro Studi of the
Consorzio Nazionale della Cooperazione di Solidarieta Sociale
"Gino Matarelli" in Italy specialize in these areas.  Further
research is being undertaken by a number of co-operative
institutions, as well as in universities.  The larger
user-owned enterprises in Japan and the United States
undertake operational and medical research, while in Brazil
Unimed has established its own Study Centre Foundation.
Research is undertaken also at the regional level: for
example, in Europe by CECOP (Comite Europeen des Cooperatives
de Production et de Travail Associe), and in the Americas by
the ICA's Regional Office in Costa Rica.  At the global level
the ICA's Committee on Co-operative Research has examined this
area of co-operative development in recent years.

Co-operative media enterprises, and media facilities operated
by other co-operatives, have played an important role in
diffusing health and nutrition information and promoting
healthy life styles.  Education co-operatives in a few
countries train staff at graduate and post-graduate levels and
within continuing education programmes.  This is the case, for
example, in Portugal, where the Higher and University
Education Co-operative, CESPU, offers courses in the two
largest cities.  Many health cooperatives provide their own

Co-operatives in other sectors contribute significantly to the
health and well-being not only of members and employees and
their dependents, but also, by serving as innovators and
models, and by lobbying for improved legislation, that of
society as a whole.  They include agricultural and fisheries
co-operatives, producing nutritionally appropriate and safe
foods; retail co-operatives, supplying nutritionally correct
foods at affordable prices, as well as consumer education;
housing and community development co-operatives, providing
utilities, sanitation, consumer protection, social care,
preventive health and health education and financial
co-operatives, assisting individuals with financial
management, thereby reducing stress and helping them afford
better shelter, nutrition and health care as well supplying
affordable capital and business counselling to co-operative
enterprises in the health and social care sectors.  

Strategic Alliances
Strategic alliances between different types of co-operative
engaged in health and social care have begun to develop in
some countries - as in Colombia and Malaysia between insurers,
provider-owned health co-operatives and other co-operatives on
behalf of their user members. In Italy the co-operative
insurance enterprise Unipol has set up a subsidiary to provide
health insurance in close collaboration with the co-operative,
trade union and mutual movements. In Sweden national
co-operative housing and insurance organizations have promoted
health and social care co-operatives, as have apex
organizations in Canada and the United States. In Brazil
Unimed is beginning to operate as a comprehensive system.

A number of national governments have recently taken an
interest in the potential of the co-operative movement. In
Malaysia the government has actively promoted a national
co-operative health system. The United Kingdom's Department of
Health has commissioned a study from the Centre for Social
Research at Loughborough University. Interest has been shown
increasingly by regional and local government authorities.

International Networking
International collaboration within the co-operative movement
is accelerating. The Medical Co-op Committee of the Japanese
Consumers' Co-operative Union, jointly with the National
Welfare Federation of Agricultural Co-operatives in Japan,
organized a first global meeting, the International
Health-Medical Co-operative Forum, in Tokyo in 1992. In April
1994 a first Asian regional meeting took place in Sri Lanka.
In June 1995 a first Inter-American Forum on Co-operative
Health Care and Related Services was organized by Unimed and
held at Sao Paulo, Brazil.  Its purpose was to delineate
guidelines for the establishment of an ICA specialized body, a
development already proposed by Dr. Jose Espriu in an article
published in this Review in 1994. In September 1995, an
International Co-operative Health and Social Care Forum was
held, at which further discussions concerning a specialized
body took place. In January 1996 an ICA Health Steering
Committee largely completed a draft of the rules of an
International Health Co-operative Organization. Discussions
were to continue at the Espriu Foundation in April 1996.
At its September 1995 Conference, the International
Co-operative and Mutual Insurance Federation organized a
seminar on "Social welfare provision - a fitting opportunity
in an opening market?" 
Earlier it had established an Insurance Intelligence Group,
responsible for identifying new opportunities in insurance
markets. This will undertake during 1996 a priority research
project entitled "Social security and health care: tailor made
insurance products to fill the gap in social security".  

Inter-governmental Collaboration
There has been a complementary growth of interest within the
intergovernmental community. The ILO's Co-operative Branch
recently began a programme to promote social services through
co-operatives, mutuals and other associations in a number of
developing countries. WHO considers that cooperatives of all
types are a potentially useful organizational means for
promoting health. In its resolution 49/155, adopted in
December 1994, the United Nations General Assembly encouraged
Governments "to consider fully the potential of co-operatives
for contributing to the solution of economic, social and
environmental problems."  In their Copenhagen Declaration on
Social Development, made at the World Summit for Social
Development in March 1995, signatory Heads of State and
Government committed themselves to "utilize and develop fully
the potential and contribution of co-operatives for the
attainment of social development goals". The United Nations
Department for Policy Coordination and Sustainable Development
undertakes policy-analytic and promotional work in support of
the co-operative movement. It includes a Focal Point for the
Promotion of Co-operatives.  

The United Nations' global review, parts of which are
summarized in this article, was prepared in close
collaboration with the International Co-operative Alliance. 

The Chairman and one of the Vice-chairmen of the ICA Committee
on Co-operative Research, Professors Roger Spear and Yohannan
Stryjan respectively, made comprehensive suggestions for
revising a first draft. 

Professor Johnston Birchall of Brunel University, United
Kingdom, and editor of the Journal of Co-operative Studies,
contributed a specially prepared paper. 

Professors Jean-Pierre Girard and Yvan Comeau of the Chaire de
cooperation Guy-Bernier of the Universite du Quebec a Montreal
made available advance copies of a study to be published later
in 1996. 

Dr. Yehudah Paz, Director of the International Institute of
the Histadrut, provided information on the Israeli experience.

Mr.Hans Dahlberg, Chief Executive officer of ICMIF, provided
comments and detailed information.

Mr. Shoji Kato, Chairman of the Medical Co-op Committee of
JCCU commented on an early draft.  

* Dr. Stubbs is Focal Point for the Promotion of Co-operatives
in the United Nations Secretariat and responsible for a global
review of co-operative enterprise in the health and social
care sectors, prepared in close collaboration with the
International Co-operative Alliance, and to be published by
the United Nations later in 1996.