The Washington Post and New York Times both have front page stories out today on Sen. Kent Conrad’s (D-ND) co-op fall back  for President Barack Obama’s imperiled public plan. The NYT reports: “The history of health insurance in the United States is full of largely unsuccessful efforts to introduce new models of insurance that would lower costs. And the health insurance markets of many states suggest that any new entrant would face many difficulties in getting established.” WaPo reads: “There are at least two major health-care organizations that could serve as models for Congress: HealthPartners in Minnesota and Group Health Cooperative, based in Seattle. They employ physicians and own health-care facilities, giving them greater power to control the delivery of care.”

HealthPartners and Group Health Cooperative are both high quality integrated health systems much like Intermountain Health in Colorado and Mayo Clinic in Minnesota, which have both been praised by President Barack Obama. These are all wonderful health care systems which can serve as models to other providers. But the reason they are so hard to replicate is not because of too little government intervention, but because of too much.

Like all health providers today, these entities are all subject to the perverse tax incentives and regulations that blunt all innovative systems. Each are subject to state (and federal) mandates that push up costs and a federal tax code that forces them to be primarily employer based plans. Real health care reform would mean restructuring the tax code to decouple health insurance and employment and encouraging states to drop costly mandates that drive up health insurance costs for everyone. Once freed from cookie-cutter federal and state regulations, Americans would be much more likely to see new enterprises like HealthPartners, Group Health, Intermountain, and Mayo, be established, expand, and flourish.