As alluring as Wineman’s situation might sound, it is also a rarity. And expanding it on a national scale as some Democrats in Congress have proposed, would be difficult because co-ops would take decades to develop and have trouble competing with established private insurers, said some health-policy experts, such as Timothy Jost, a professor at Washington and Lee University School of Law in Lexington, Virginia.

As Congress returns next week to debate health-care legislation, lawmakers such as Sen. Kent Conrad, a Democrat from North Dakota, have pushed co-ops as an alternative to a government-run public option to compete with private insurers. Conrad is promoting state or regional non-profit co-ops that he said could cover 12 million people with $6 billion in government startup money.

Trouble Raising Capital

Some experts say co-ops would have trouble building large physician networks and raising operating funds.

“You don’t have investors, so you will have to find another way to get capital,” said Jost, who specializes in health law. “It’s a major thing starting up an insurance company. It’s not like starting up a little knickknack store.”

Karen Davis, president of the New York-based Commonwealth Fund, a health-policy research center, said co-ops alone probably wouldn’t provide enough competition to private insurers such as Indianapolis-based WellPoint Inc. or Minnetonka, Minnesota-based UnitedHealth Group Inc., because they’re not big enough to negotiate cheaper rates from providers.

Health insurance stocks have gained 16 percent in 2009, according to the Standard & Poor’s Supercomposite Managed Health Care Index.

“They aren’t likely to ever have the purchasing clout that something tied to Medicare is going to have,â€

Lower Cost

Defenders of co-ops say that with government aid and regulatory support they could thrive and bring down costs by providing competition to private companies.

The public insurance plan backed by Democrats to extend coverage to millions of uninsured Americans is among the most contentious issues of health care overhaul. Critics say it would result in “socialized medicine.”

The co-op alternative would be run by its members and negotiate rates with doctors and hospitals, offering consumers more choice at lower cost, Conrad said.

That’s been the case at HealthPartners.

The cost of providing care in Minnesota is 20 percent to 30 percent less than the national average, and HealthPartners’ costs are 8 percent lower than the state average, according to the Dartmouth Atlas of Healthcare, a Dartmouth Institute for Health Policy project that examines medical resources.

1 Million Members

HealthPartners, with more than 1 million members, has about a third of the market share in Minnesota. Its two main rivals are Blue Cross Blue Shield and Medica. About 8 percent of Minnesotans lack health insurance, compared with 15 percent nationwide.

Minnesota is the only state that requires health- maintenance organizations be non-profit, meaning co-ops don’t compete with for-profit insurers.

HealthPartners’ disease-management programs have led to reductions in admissions for patients with asthma, diabetes and heart disease, according to a Commonwealth Fund study.

“We get to do what we need to based on the good of the patient,” said Wineman.

Tom Brinsko, HealthPartners’ board chairman, said the co- op saves money by using generic medicines, reducing duplicative medical tests, cutting administrative costs, and educating members on staying healthy. A program to reduce unnecessary medical-imaging has saved $14 million since 2007.

HealthPartners also saves money by owning its own facilities and employing almost 700 of its own doctors, who receive compensation comparable to that of other physician groups in the region, said Joe Dangor, a HealthPartners spokesman.

Decades to Develop

Some health-policy experts remain unconvinced that co-ops could serve as a viable replacement, saying they would take decades to develop even with government aid.

“I don’t think you can take that template and slap it down all over the country,” said Roger Feldman, a health- economics professor at the University of Minnesota in Minneapolis.

Feldman, who belongs to HealthPartners, cited the capital investment needed to start such an organization, which has $3 billion in annual revenue. The $6 billion in federal funds that Conrad’s Senate Finance Committee is considering would be insufficient, Feldman said.

Limited Success

“The question you have to ask yourself is why aren’t there health-care cooperatives across the U.S.?” said Jon Christianson, a University of Minnesota health policy professor and HealthPartners’ member.

There are five consumer health cooperatives in the U.S., down from 15 in the 1970s, said Paul Hazen, president of the Washington-based National Cooperative Business Association.

HealthPartners and Group Health Cooperative in Seattle, the second-biggest, got their start in the 1940s and ‘50s, when the insurance market was less developed.

Wisconsin has two smaller health co-ops, and there is a fifth in Duluth, Minnesota, Hazen said.

Some consumer health co-ops struggled because they were undercapitalized or faced heavy competition and merged with for-profit rivals, said Hazen.

Tensions between doctors seeking more staff and equipment and the consumer-led management trying to keep costs low caused others to fail, said Davis of the Commonwealth Fund.

Cooperatives have a long history in the U.S., especially in the upper Midwest. Rural electricity co-ops to build power lines to farms and small towns developed in the 1930s with the help of government assistance.

Ann Hoyt, an economist at the University of Wisconsin in Madison who studies co-ops, said they could be “tremendously successful” if they had enough members.

The Health Cooperative of South Central Wisconsin in Madison, which has 62,000 members, was ranked the eighth-best health plan in the country last year by the National Committee for Quality Assurance, a non-profit group working to improve health-care.

“We just can’t clone these types of cooperatives and have them be part of the solution overnight,” said Larry Zanoni, executive director of the Wisconsin group.