In the past few days, there seems to be a shift in some of the reporting on this topic. We are seeing more effort to dig into what healthcare cooperatives would mean, and that is a very good thing.

For starters, The Washington Post did a joint blog forum with the CEO of Group Health, casting a bit of light on how that system works. It is important to note that Group Health is not just an insurer, but rather a self-contained provider with its own clinics and medical staff.

But what really has me impressed is that the Heritage Foundation (a conservative think tank) ran an extremely informative pieceon insurance co-ops and mutuals and other legal definitions. Once again, it is the conservatives who seem to be taking a critical look at this idea, which is making progressives seem like naysayers for a change.

Don't get me wrong: There is still a lot of misinformation. For example, The Wall Street Journal reported that the proposed insurance cooperatives would "see direct oversight from the Health and Human Services secretary, who would (have) authority to make 'final decisions about approvals of business plans and distribution of funds.'"

My understanding of the item quoted (in its proper context) is not that there would be direct and ongoing oversight beyond the usual legal standards of the industry. Rather, this wording apparently describes criteria by which the secretary makes the decision to disburse the funds during the start-up process. Ultimately, that is not much different than any lender or grantor wanting to make sure that their money will be well spent, and I can't imagine that anyone would want the government to disburse money without an appropriate business plan. That is, unless they were a crook looking for easy money.

The finished proposal may include ongoing oversight, but the draft proposal does not have any evidence of this and seems to address only the start-up financing. Information is admittedly scarce, but unless the Journal knows something that it isn't reporting, it seems that it has jumped to a conclusion here.

By doing so, the Journal is needlessly fueling resistance to this proposal. In fact, cooperatives are generally democratically controlled by their members, which is the reason they are being discussed as an alternative to a public plan. While imperfect, a cooperative approach to health care reform deserves a fair chance. Cooperatives are an unfamiliar concept to most people (and various public figures are making erroneous statements), so it is especially important that the media avoid mischaracterization of cooperatives.

Co-ops are seen as weaker than the public option (or, less gently "a cop-out" or "the stupidest idea ever") However, we should not assume that a public plan will mean that the system is somehow magically and permanently transformed. Whatever happens, the government will still be on the brink of insolvency. Worse, the same interest groups that made the health care mess will still be there, trying to make another mess.

Consider what has happened with financial regulation, which has effectively been captured by the industry it is supposed to regulate. What is to stop the medical interests (1/6 of the economy, remember) from continuing to interfere with elements of a public plan that don't fit their interests? What is to stop them from trying to get the plan repealed or neutralized? Nothing, really.

On the other hand, what would stop them from interfering in co-ops? If co-ops are democratic, couldn't an interest group donate to board candidates with pro-business philosophies, and thereby have its way? History is littered with demutualizations, in which co-op or mutual members are convinced to sell out when offered enough short term cash. And consumer co-ops are notorious (in the co-op world) for very low election turnout. So their elections might sell for cheap. We'll need to be vigilant here.

In any case, we now have a grand total of one slide worth of information about the co-op proposal (which will probably have to compete with other proposals from other Senate committees, as well as from the House), so it is a bit too early to really tell how this is all going to work. I don't see any especially red flags, but still have some serious qualms about this coming from the government. I also worry that the problem might be too big for this solution, and co-ops could get blamed for failing to fix the unfixable.

Nevertheless, it looks like the co-op plan is going to be with us for a while. This proposal still has to go through the meat grinder, so there's no telling what will come out on the other side. But it seems entirely possible that co-ops will be prominently featured in the growing debate. Whatever happens, I hope that this episode serves as an opportunity for us to encourage co-op development, which will be a good thing regardless of what government does.