Minn. Auditor Says Co-Ops Wasteful

ST. PAUL–An investigation by the state auditor’s office found that cooperative groups set up by school districts and local governments to get better deals on health insurance are having the opposite effect.

The auditor’s report found that a consultant hired by the so-called service cooperatives to help develop bids for health care coverage had at the same time a consultant’s contract with Blue Cross/Blue Shield–the insurance carrier for each of the cooperatives.

The report also found that the cooperatives are spending program funds, which are required to be spent on healthcare activities, on other purposes.

That includes training, employee banquets and extra-curricular activities, the report found.

Copyright 2005 Associated Press. All rights reserved.