What Rural Electric Co-ops Can Teach Us About Fixing Health Care

The radical solution to Medicare Advantage that both Bernie Sanders and Ronald Reagan supported.

The Promise and the Betrayal

Through my parents' experiences with Medicare Advantage, I've witnessed both the promise and perversion of American health care. My father's journey with Parkinson's showed us what's possible when the system works as intended. My mother's current struggles reveal what happens when Wall Street warps that same system for profit. Their contrasting experiences illuminate a critical truth: the problem isn't Medicare Advantage itself – it's what happens when corporations corrupt its purpose.

For five years, my father received exceptional care through an Iora Health-based Medicare Advantage plan. His team included not just doctors, but health coaches, nurses, and therapists who supported our entire family through his Parkinson's journey. This comprehensive care not only provided better support for my mother and siblings, but likely saved taxpayers between $250,000 and $500,000 over the course of his Parkinson's journey by preventing costly complications and unnecessary hospitalizations through proactive, coordinated care.

But then came what tech critic Cory Doctorow has termed the 'enshittification' – the inevitable degradation that occurs when Wall Street gets its hands on something good. This process, which Doctorow deemed 2023's word of the year, follows a predictable pattern: corporate entities acquire successful services, then systematically degrade them to extract maximum profit. We've witnessed this firsthand as my mother now struggles with a corporatized version of what was once an exceptional care model. The warm, relationship-based care has been replaced by algorithmic decision-making, denial-by-default policies, and plain corporate incompetence. In one telling example, after the corporate takeover of her medical group, administrators in Minnesota – who have never set foot in our community – now route prescriptions to a pharmacy in a sketchy part of town, simply because it looks close on Google Maps. Any local would know better than to send an elderly person there.

The Current Crisis

Today's Medicare Advantage landscape is dominated by behemoth Wall Street-focused carriers who have turned a promising health care innovation into a profit machine. These corporate giants have mastered the art of gaming risk scores and denying care while delivering abysmal health outcomes. The numbers tell a damning story: 82% of denied claims that are appealed are later overturned, revealing a pattern of systematic care obstruction. Nearly twelve million Americans in Medicare Advantage plans are restricted to networks that exclude more than 70% of physicians in their county.

A Path Forward Through History

Let's be clear: Medicare Advantage is here to stay. With approximately 50% of new Medicare recipients choosing Medicare Advantage plans, this system has become deeply embedded in our health care landscape. As history has shown repeatedly, once such systems take root, they're nearly impossible to remove. The challenge – and opportunity – isn't to dismantle Medicare Advantage but to transform it, using its inherent flexibility to create something that truly serves communities. 

Medicare Advantage's ability to invest in social determinants of health – which drive 80% of health outcomes – demonstrates this flexibility. While traditional Medicare focuses narrowly on medical services, Medicare Advantage plans can address crucial needs like food security, transportation, housing improvements, and social connection that profoundly impact health. This flexibility to invest in what actually keeps people healthy, rather than just treating illness, is too valuable to lose.

To my Democratic friends: let's avoid the tyranny of low expectations. Traditional Medicare, with its fee-for-service model and gaps in coverage, isn't the gold standard we should defend. It's a system that too often inflicts unnecessary treatments on patients while excluding crucial services while steadily decreasing pay to invaluable independent medical groups while padding behemoth health systems' payments.

To my Republican friends: your faith in Wall Street efficiency has produced a perverse outcome – Medicare Advantage has become the most profitable business line for insurance giants not through innovation or better care, but through systematic fraud and denial of care, while delivering abysmal health outcomes. This isn't market efficiency – it's market failure at its most egregious.

The Cooperative Solution

We don't need a right or left solution. We need an American solution, and history offers us a promising model: cooperatives.

A century ago, America faced another market failure. Rural communities were being left behind in the electrification of America. The solution wasn't purely governmental or purely private – it was cooperative. Rural electric cooperatives, supported by federal policy but governed locally, brought power to vast swaths of America. Today, they still provide electricity to the majority of our nation's landmass, with bipartisan support.

health care faces a similar market failure today. We have record levels of clinician burnout, 100 million Americans in medical debt, and abysmal health outcomes despite massive spending. The solution isn't to double down on corporate control or default to traditional Medicare – it's to reimagine Medicare Advantage through the cooperative model.

Learning from History's Success Stories

History shows us that transformative systems often start small and local. Consider how many services we now take for granted began: public education, police and fire protection, water systems, and even the U.S. mail. Each started as local initiatives, with communities designing solutions for themselves. Some communities created subscription-based services, others used tax funding, but all began at the human scale – where people could see, understand, and influence the systems that served them.

This pattern of local innovation leading to systemic change isn't just history – it's a blueprint for health care reform. Increasingly, people recognize that the most accountable organizations are those closest to home. Whether it's local government or community-based businesses, proximity breeds responsibility and responsiveness.

A New Vision for Health Care

Imagine Medicare Advantage plans governed not by distant corporate boards, but by the communities they serve, including both clinicians and patients. These plans would operate at a human scale – covering populations of 25,000 to 500,000 people, similar to a school or fire district. They could use Medicare Advantage's unique flexibility to invest in what truly creates health: helping seniors fix failing air conditioners during heat waves, providing transportation not just to medical appointments but to grocery stores and social activities, delivering nutritious meals to prevent malnutrition, and funding other community-based supports that traditional Medicare can't cover. 

When health plans are rooted in and governed by communities, these investments become natural expressions of neighbors helping neighbors, not just boxes to check for marketing materials. This isn't theoretical – successful examples like Nuka Health in Alaska and cooperative health care initiatives in places like Ashtabula, Ohio show it's possible.

Cooperatives offer a sweet spot between the extremes of hypercapitalism, where every decision is filtered through profit maximization, and rigid government control. They're nimble enough to innovate but grounded in community needs. Like the rural electric cooperatives, they can bridge ideological divides – after all, both Bernie Sanders and Ronald Reagan have championed cooperative models.

Learning from Past Attempts

This transformation won't be easy. The cooperatives attempted during the Affordable Care Act's implementation offer crucial lessons. While some failures stemmed from being conceived as top-down, state-level entities rather than ground-up, community-based organizations, many faced orchestrated undermining by established insurance carriers. These industry giants employed predatory pricing tactics to force cooperatives to underprice their products, while simultaneously acting as back-end service providers and extracting excessive fees. Large health systems often refused to negotiate in good faith, citing insufficient volume as an excuse to deny competitive pricing. Even well-led cooperatives with extensive managed care experience struggled against this coordinated opposition and platform dependencies.

We need to learn from this experience and build Medicare Advantage cooperatives that are not only truly rooted in local communities but are also structurally resilient to industry undermining. This means creating robust policy frameworks that go beyond just providing funding – they must actively prevent anti-competitive actions by legacy carriers and ensure fair access to essential health care infrastructure and networks.

The Power of Self-Determination

The success of Alaska's Nuka System of Care offers a powerful blueprint for transformation. Once considered among the worst health systems in the world, it's now celebrated as one of the best. This remarkable turnaround was enabled by the Indian Self-Determination Act, which established clear hurdles for communities to clear before assuming control of their health care system – ensuring genuine grassroots support and community readiness.

This principle of self-determination lies at the heart of the cooperative model. Just as Native communities transformed their health care through local control and cultural alignment, other communities can use the cooperative model to reclaim and reimagine their health care systems. The cooperative structure itself is an expression of self-determination – communities taking control of essential services rather than remaining at the mercy of distant corporate interests.

Building the Future

Just as our predecessors built local schools, fire departments, and water systems that eventually evolved into comprehensive public services, we can transform Medicare Advantage from the ground up. The flexibility inherent in the Medicare Advantage system – the very feature that Wall Street has exploited for profit – can become the foundation for community-based innovation and control.

The stakes couldn't be higher. Our current health care system is failing both patients and providers. We have a historic opportunity to transform Medicare Advantage from a Wall Street profit center into a community-owned resource that delivers on its original promise: better care, better outcomes, and better value for all Americans.

The Transformative Mindset

Every community has a mighty river of health care dollars flowing through their towns/companies – money that flows from the wallets and paychecks of its own people. In a healthy system, this river would work like nature's water cycle: rising from the community, returning as life-giving rain, nourishing the soil of local wellbeing. Instead, powerful corporate pipelines divert this river away from its source, siphoning billions to distant Wall Street reservoirs while leaving communities in drought.

But some communities are breaking these pipelines and reclaiming their waters. In places like Ashtabula and Tangelo Park, they've proven that when health care dollars flow freely through local channels – from neighborhood clinics to community pharmacies – they create an ecosystem of health and prosperity. Their rivers now irrigate better schools, nurture local businesses, grow household incomes and water the seeds of generational change.

The restoration of health sovereignty flows from reclaiming our rivers of care. Communities that free their health care from Wall Street channels create thriving local ecosystems fostering generational wellbeing. Like water itself, health care dollars hold the power to give life, but only when they flow freely through the hands of those who need them most.

The Time for Action

The choice before us is clear: continue down the path of corporate degradation, or embrace a proven model of community ownership and self-determination. The flexibility of Medicare Advantage, combined with the democratic principles of cooperatives, offers us a unique opportunity to build health care systems that truly serve their communities. The question isn't whether we can afford to make this transformation – it's whether we can afford not to.

The question isn't whether Medicare Advantage is good or bad – it's whether we have the vision and courage to remake it in service of the communities it's meant to serve, following the proven path of local innovation that has built so many of America's most essential and enduring institutions.

Dave Chase is a co-founder and CEO of Health Rosetta. Prior to Health Rosetta, he co-founded Avado, which was acquired by and integrated into WebMD/Medscape; founded Microsoft’s 28,000 partner $30 billion health care ecosystem; and was a consultant with Accenture’s health care practice.