Investing in Community Acupuncture

This blog post is 3 things: a long overdue follow up to my Jobs Post #2: Investment; an excerpt from the text that a bunch of us are feverishly writing for the new POCA website; and a kind of illustration of one of the reasons why we STILL haven't actually started signing anybody up for POCA. That would be because our lawyer has to review everything to make sure the securities disclaimer is in the right place on the membership forms. And why do we need a securities disclaimer? Read on, comrades.

Investing in the People's Organization of Community Acupuncture

Wikipedia defines a cooperative as “a business organization owned and operated by a group of individuals for their mutual benefit.” This “mutual benefit” can take many different forms. Workers' cooperatives, for instance, allow their members to accumulate equity in the business that employs them. Many consumer cooperatives, such as REI, offer patronage dividends to their members, meaning that members receive a refund of money they spent on purchases at the co-op. For cooperatives that provide equity or patronage to their members, the initial fee to join the co-op is a membership “share”, which means a one-time purchase of ownership in the business, which entitles the members to receive a portion of the business' profits in the future.

POCA is different. Becoming a member of POCA does not mean accumulating equity or owning a share or receiving any financial dividends at all. POCA is not set up to make a profit, so it can't share profits with its members.

When you join POCA, you are investing in POCA. You are investing in the community acupuncture movement by joining a group of people who own and operate the business that is POCA. Your membership basically represents your investment.

But why would you want to invest in a business that doesn't make a profit?

Community acupuncture is based on a social business model. A social business is designed to produce “social dividends”, in this case, acupuncture treatments that are affordable for people with ordinary incomes, and living wage jobs in community acupuncture clinics. These treatments and these jobs benefit society as a whole; that's why we call them the social dividends of community acupuncture. However, balancing the need to keep the treatment price low enough to be accessible to as many people as possible, with the need to provide living wage jobs to the people who work in the clinics, means that the community acupuncture operate business model operates on a very slim margin. Clinics, even when they are very successful, make just enough money to exist and to keep producing those social dividends. There is no money left over for profits.

After a number of years, observing a lot of clinics, it's pretty clear that this is not about the entrepreneurial savvy of the clinic owner or a need for better advertising or what patients pay on the sliding scale; it's more fundamental than that. For a community acupuncture clinic to truly be profitable in a basic capitalist way, it would either have to raise its prices substantially or pay its workers much less. In other words, to make a profit and create a financial dividend, it would have to sacrifice one or both of its social dividends. And so even a very successful community acupuncture clinic will never attract typical capitalist investors, because if a clinic is doing what it is designed to do, it will not produce any financial dividends, which is what most investors want to see. One of the purposes of POCA is to make it possible for people to invest in community acupuncture who are not typical capitalist investors, and who want more of the social dividends that we do have, rather than the financial dividends that we don't have – more affordable treatments, more living wage jobs. It is particularly important that the people who personally benefit from the affordable treatments and the living wage jobs have a way to invest their resources – time, energy, money – to create more clinics, as opposed to hoping and waiting for some investor with deep pockets to come along, recognize what a great resource community acupuncture is, and say, hey, we need more of these! Because we could be waiting a very long time.

And so investing in POCA is all about investing in a group of businesses that don't make a profit and that never will, no matter how hard they work or how smart they work. It stands to reason, then, that a cooperative that supports these businesses wouldn't generate any financial dividends, either.

But there's even more to it than that. John Weeks, who arguably knows more about the business of integrative medicine in this country than anybody else, recently wrote a post in The Integrator Blog in which he suggested that integrative medicine itself – not just community acupuncture – is fundamentally unsuited to making money in the typical capitalist sense. Integrative medicine has been struggling financially for a decade or more, since venture capitalists tried investing in several high-profile projects that failed spectacularly. Undeterred, the general public continues to want access to integrative medicine; it's not the venture capitalists, however, who will be helping them get it. John Weeks believes that the economic value in integrative medicine is actually not in generating profits but in saving money that would otherwise be consumed by the skyrocketing costs of healthcare. (Doesn't saving money for society sound like a social dividend?) He suggests that the integrative practice community learn to stop being defensive about our lack of value to the venture capitalists of the world and start being assertive about our value to everyone else; in other words, the true economic value of integrative medicine can only be seen in light of the common good.

Returning to the question of why would you want to invest in a business that doesn't make a profit --many of us believe that the real problem with healthcare in this country is that it DOES make a profit. It makes profits far too well, better than it takes care of patients, better than it looks after the needs of providers. If you believe that healthcare shouldn't be about profits, invest in POCA. If you want to create healthcare that is fundamentally about the common good, invest in POCA. The dividends you receive as a member won't be financial, but we promise that they will be valuable.

This story was posted on June 20 2011 by Lisafer.

Comments

  • June 21 2011 at 7:31 PM
    david villanueva writes:

    Thanks for this blog,

    Lisa. It clarified for me in many ways what POCA will be and how it is different from other co-ops.

      0 likes
  • June 22 2011 at 10:12 AM
    Diana writes:

    The profit motive in

    The profit motive in medicine drives me nuts, especially with pharmaceuticals.  How amazing to have a model that leaves out the profit motive while also leaving out the beurocracy and social service mindset of the non-profit world.  POCA is change I don’t have to just “believe in”—I can be a part of making it happen.

      0 likes
  • June 22 2011 at 10:13 AM
    Diana writes:

    and doesn’t this make sense

    and doesn’t this make sense of so many of the practical, business issues that plague alt. medicine—it needs its own system.  For profit and non profit are both a bad fit. 

      0 likes
  • June 23 2011 at 11:16 AM
    Nic writes:

    .

    acupuncture is naturally radical.  it is so good at what it does- helping lots of people in a safe, simple, inexpensive way.  All we need to do is be accessible and get out of the way—acupuncture does the rest.  It generates just enough money to keep a clinic running and the employees paid. This is great because it ensures that the only people involved are patients and punks and reception and allies. 

    the genius of POCA is that it embraces how acu wants to be- radical, humble and far-reaching.  Thanks everyone for getting this going!

      0 likes

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