HOW CO-OP SHOULD WORK

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 14, 1992                   TAG: 9202140192
SECTION: VIRGINIA                    PAGE: A-12   EDITION: METRO 
SOURCE: CHARLES HITE
DATELINE:                                 LENGTH: Short
HOW CO-OP SHOULD WORK
The "buyers cooperative" for medical care is supposed to work like this:

A negotiating team, armed with cost data from Medicare and other agencies, goes to each hospital and bargains for a discount on each of the more than 12,000 charges - ranging from a gauze bandage to a chest X-ray - that appear in hospital bills.

The employer gets an itemized account of each hospital bill that shows exactly how much each charge was discounted. Each employer refunds anywhere from 35 percent to 50 percent of the actual hospital savings as payment to fund the co-op. As the volume increases, the refund to the co-op decreases.

Participating companies do not have to change insurance benefits or insurance carriers. The co-op discounts claims and then sends them to a company's claims payer.

The co-op analyzes information on hospital bills to determine where employers get the most for their money. The co-op looks not only at price, but where patients had the best results in recovering from certain procedures or operations.

The co-op shares the information with the employers, as well as hospitals and physicians. The co-op hopes physicians will use the information to learn how to be more cost-effective.

The employers eventually will use information from the co-op to steer their employees to the hospitals with the best value.

by Bhavesh Jinadra by CNB