[Congressional Record Volume 142, Number 14 (Thursday, February 1, 1996)]
[Senate]
[Pages S861-S862]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    RURAL MANAGED CARE COOPERATIVES

 Mr. HATFIELD. Mr. President, real health care reform has 
eluded us the past several years and there are sectors of our 
population that are suffering. Today I speak of a particular segment of 
our society that, at least in discussions of health care, is too often 
overlooked--rural America. Rural communities face the unique challenge 
of obtaining health care in isolated areas. Economic depression, 
geographic isolation, an inability to retain qualified providers, and a 
lack of primary care facilities are a few of the barriers to quality 
health care in our rural and agricultural sectors. To meet this 
challenge, I have filed an amendment to support the development of 
rural managed care cooperatives--a small investment in the health of 
our farmers, their families and all those who make up the communities 
we call rural America.
  There is no dispute that the economic base and the economic vitality 
of a given community is directly correlated to the health of the 
individuals who serve it. As we discuss the farm bill, under whatever 
guise it may be considered, we must not forget this important fact. The 
health of our farm industry is of the utmost importance, but it must 
not be separated from the health of the men and women who support it.
  Cooperatives, in one form or another, have been second nature to 
farming communities for over a century. Whether farmers join together 
to form a purchasing cooperative, one of the most common types, or a 
marketing cooperative, the style of business has proven itself fair, 
efficient, and effective. Furthermore, its laws of operation translate 
remarkably well to sectors such as housing, service, and even rural 
health care.
  Make no mistake. This idea of a rural health care cooperative is not 
new. In 1929, Elk City, OK, became home to the first health maintenance 
organization run by the farmers cooperative. Since then, several 
attempts to create rural health cooperatives have failed as a result of 
being unable to meet the necessary startup costs. My amendment provides 
this startup support.
  It would allow the Secretary of Health and Human Services, acting 
through the Health Resources and Services Administration and the 
Secretary of Agriculture, acting through the Rural Business and 
Cooperative Development Service, to award competitive grants to those 
communities which wish to form a rural managed care cooperative. The 
purpose of the cooperative is to establish a structure and approach 
that will keep rural hospitals and health care systems financially 
sound and competitive with urban health care systems.
  Especially in recent years, rural areas have found it increasingly 
difficult to attract the physicians and other health care providers 
necessary 

[[Page S862]]
to meet even minimum community health standards. This shortage of 
providers results from the inability of rural communities to compete 
with comparatively rich urban markets. The resources of these larger 
markets are alluring incentives for health care providers to avoid or 
stray away from their rural practices. By establishing a systematic 
case management and reimbursement system designed to support the 
communities' needs, a cooperative will provide an effective framework 
for negotiating contracts with payers and a framework for assuring a 
defined level of quality.
  Through the combination of medical resources, streamlined managerial 
and reimbursement responsibilities, and shared liability, rural managed 
care cooperatives have proven themselves able to attract health care 
providers, thus improving access to and quality of rural care and 
enhancing the economic vitality of rural health care systems and, 
commensurately, the economic vitality of surrounding rural industries.
  Of concern to participants in such cooperatives is the threat of 
antitrust lawsuits. Such a threat serves to undermine the goal of rural 
managed care cooperatives. While the Capper-Volstead Act of 1922 
recognized farmers' rights to form cooperatives without violating 
antitrust laws, these rights have not transferred to rural health care 
providers. Therefore, language in my amendment would protect those 
providers who participate in cooperatives from antitrust laws. This 
antitrust law exemption is necessary to facilitate the development of 
rural networks and developments.
  More than once, I have expressed my concern for the crisis in rural 
health care. Between 1989 and 1993, 141 rural community hospitals have 
closed. In my State alone, five rural hospitals have closed since 1986 
and several others face the threat of closure. Rural health care 
cooperatives are not the panacea to this crisis, but it is a dose 
potent enough to make a difference. As we consider the health of our 
Nations' farm industry, I would urge us to remember the health of the 
rural communities which house it.

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