A ‘Whipping Boy’ Shines in California : Amid criticism of health care alliances, one purchasing group has lots of happy customers

In the debate over health care reform, health care “alliances,” or group purchasing pools, have become one of the favorite whipping boys in Washington. Under President Clinton’s health care reform plan, a health care alliance would be a government-established regional agency; as a patient-doctor go-between, it would negotiate for the best prices for medical services. These alliances, a key part of the Clinton plan, have been denounced as the vehicles by which government would dictate how often a patient saw a physician and which physician the patient saw. Such alliances, opponents maintain, would prove to be prototypes of government bureaucracy run amok.

However, it doesn’t have to be that way, and it’s not that way for 40,000 workers who are members of the nation’s first working alliance. It’s called the Health Insurance Plan of California, and Times staff writer Robert A. Rosenblatt has found it has a lot of happy customers.

There are key differences between the little-known HIPC alliance and what Clinton proposes: The HIPC is voluntary and privately run. Thus the major objections to Clinton’s version of health alliances are removed. And while the HIPC doesn’t have the political baggage of the Clinton alliances, it still retains the major advantage: Through it, consumers can negotiate better prices by virtue of having banding together.

Here’s how it works. In Los Angeles County, a worker whose company has joined the HIPC can choose among 15 health insurance plans, including health maintenance organizations. Monthly fees vary, with the company paying at least half of the cost of the lowest-priced plan. The worker pays the rest. Rates are 10% to 15% lower than many comparable conventional plans. In one dramatic example, a Van Nuys firm was quoted a premium of $2,500 a month for seven workers; last summer it joined the HIPC and now pays $780 a month.

Ironically, it was in part the fear that the government would mandate health care alliances that gave impetus to the creation of voluntary programs. In Florida, where a voluntary alliance will start in May, Gov. Lawton Chiles admitted that the President’s plan was a tremendous incentive to get moving.

The President’s plan, which by Clinton’s own admission has virtually no chance of remaining intact, indeed needs revision. But the important lesson offered by the impressive California experience so far is that labels alone mean nothing. Health care alliances, or purchasing pools, are not inherently evil. As a matter of fact, when set up properly they can work quite well.