NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, January 13th, 2017

Group Health Cooperative is no more: State approves GHC’s sale to Kaiser Permanente

Wash­ing­ton State Insur­ance Com­mis­sion­er Mike Krei­dler today signed off on Kaiser Per­ma­nen­te’s bid to acquire the state’s home­grown health provider Group Health Coop­er­a­tive, which means GHC will be no more as of Feb­ru­ary 1st, 2017.

“After an exten­sive and thor­ough review by my office, it’s clear that Kaiser met all of the legal require­ments nec­es­sary for approval,” Krei­dler said in a state­ment. “I’m sat­is­fied Wash­ing­ton state will retain a com­pet­i­tive health insur­ance mar­ket.“

“This acqui­si­tion is a sig­nif­i­cant change for the health insur­ance mar­ket in our state,” Krei­dler added. “I trust that Kaiser and Group Health will hon­or their com­mit­ment to improve ser­vice for con­sumers.”

Kaiser plans to drop the Group Health name when it assumes con­trol of GHC and its assets, but the name will live on through the Group Health Com­mu­ni­ty Foun­da­tion, a new inde­pen­dent enti­ty which will be seed­ed with $1.8 bil­lion in fund­ing… the pro­ceeds of GHC’s sale to Kaiser. Both GHC and Kaiser are non­prof­its.

“We are hon­ored by the Commissioner’s approval and excit­ed to build upon Group Health’s strong lega­cy by serv­ing the fam­i­lies and com­mu­ni­ties of Wash­ing­ton with high-qual­i­ty and afford­able health care,” said Susan Mul­laney, who Kaiser has des­ig­nat­ed as the Pres­i­dent of its Wash­ing­ton oper­a­tions.

“Our mem­bers can look for­ward to invest­ments in the clin­ics, tech­nol­o­gy and peo­ple that deliv­er the care and ser­vices which trans­late to bet­ter health.”

“Today marks the cul­mi­na­tion of thou­sands of hours of con­sid­er­a­tion, analy­sis and dis­cus­sion amongst the Group Health Board of Direc­tors, our lead­er­ship team, our mem­bers through­out the state and now ulti­mate­ly, the tire­less work of the Commissioner’s office. This work is in ser­vice to ensur­ing the best for our mem­bers and our com­mu­ni­ties as a whole,” said Scott Arm­strong, cur­rent pres­i­dent and chief exec­u­tive offi­cer of Group Health Coop­er­a­tive.

“Con­sumers in our state will be even bet­ter served with the strength, tal­ent and resources of what will soon become Kaiser Per­ma­nente of Wash­ing­ton.”

GHC’s Arm­strong and Kaiser’s Mul­laney have claimed that the merg­er would help keep insur­ance pre­mi­ums low­er for GHC mem­bers. That remains to be seen.

There is one notable upside: Kaiser accepts patients cov­ered by Med­ic­aid, where­as Group Health pre­vi­ous­ly stopped accept­ing Med­ic­aid clients direct­ly a few years ago. The acqui­si­tion ought to result in bet­ter ser­vice for Wash­ing­to­ni­ans on Med­ic­aid.

Krei­dler’s order approv­ing the acqui­si­tion com­pletes a process that began over a year ago when GHC announced that it and its sub­sidiary Group Health Options had agreed to a sale to the Cal­i­for­nia-based Kaiser.

Mem­bers of Group Health pre­vi­ous­ly vot­ed to approve the sale, and Krei­dler’s staff last week he rec­om­mend­ed he give his assent as well.

Oppo­si­tion to the deal was mut­ed.

“While mem­bers no longer will be able to vote on gov­er­nance issues, Kaiser Per­ma­nente will estab­lish a Region­al Con­sumer Advi­so­ry Com­mit­tee,” notes a FAQ on GHC’s web­site devot­ed to the acqui­si­tion. “The com­mit­tee will include 25–35 mem­bers, meet­ing quar­ter­ly to pro­vide input in mat­ters of pol­i­cy and oper­a­tion. Kaiser Per­ma­nente will [also] con­tin­ue the Senior Cau­cus, a trust­ed advi­so­ry group, to engage and rep­re­sent the per­spec­tives of seniors in our region.”

GHC mem­ber­ship had plateaued pri­or to the deci­sion to sell to Kaiser. The two non­prof­its had pre­vi­ous­ly dis­cussed a tie-up in the 1990s, but it fell apart.

This time, it’s going to hap­pen.

Kaiser does not have much of a pres­ence in Wash­ing­ton State present­ly, and no jobs are expect­ed to be lost as a result of the acqui­si­tion. Kaiser has pledged to hon­or exist­ing union con­tracts and retain nonunion employ­ees as well.

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2 Comments

  1. As a GHC mem­ber since 1956, and an out­spo­ken crit­ic of the way the GHC Admin­is­tra­tion and Board went about the entire process of end­ing GHC, I con­sid­er this descrip­tion of events as one-sided and high­ly skewed.

    If you’d like to hear a different,detailed ver­sion of what hap­pened, let me know.

    # by Elaine Phelps :: January 15th, 2017 at 12:00 AM
    • By all means con­tribute your per­spec­tive, Elaine. Com­men­tary oppos­ing the Group Health-Kaiser deal has not been easy to find.

      # by Andrew :: January 15th, 2017 at 10:49 AM