Co-op Enterprise in Health and Social Care (M. Stubbs, 1996)

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

                                                      March, 1996


                      Michael Stubbs*

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 Tanzania.

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-
operatives, 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

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 insurance.  

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

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 "cooprative du service rgional d'approvisionnement
(CSRA)" is owned by 60 hospitals and clinics.

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.

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 training.

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 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 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
Interamerican Forum on Co-operative Health Care and Related
Services was organized by Unimed and held at Sao Paolo, 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".  

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.