Group Health’s ‘best path forward’ is sale to Kaiser

About 27,000 members of Group Health have a weighty decision coming in the next few weeks; they will vote on an offer by Oakland, California-based Kaiser Permanente to acquire the nonprofit health cooperative that serves about 590,000 member patients in Washington and northern Idaho.

In Snohomish County, Group Health operates its Everett Medical Center. And Boeing is among the major employers that contract with it for employee coverage and care.

The acquisition would end nearly 70 years of consumer-led independence for the medical provider and insurer and continue the recent trend of consolidation locally and nationally, most recently seen with the proposed purchase of The Everett Clinic by Denver, Colorado-based DaVita Healthcare Partners.

That independence is important to many. State Sen. Maralyn Chase, D-Shoreline, has been a Group Health member since 1969 and joined primarily, she says, because it was a cooperative, led by the patients it serves.

“That’s my starting point,” Chase said, who is a voting Group Health member and was drafted to write the con statement for information about the proposed sale that has been sent to members.

Chase and others disagree with the contention of supporters of the sale that there’s a financial need for Group Health to give up its independence and its cooperative system of governance.

Group Health is not in dire financial straits. Its financial position as of June shows $100 million in excess revenues over expenses and annual revenue of $3.7 billion for 2014, but it had to make $250 million in cuts as recently as 2012. Supporters of the sale make a argument similar to one that was made about the proposed sale of The Everett Clinic; Group Health needs the support and efficiencies Kaiser offers to grow and continue to offer high quality care to its consumers. Kaiser, with about 9.6 million health plan members, operates in eight states.

Group Health and Kaiser officials have met with groups representing members, physicians, staff and others to outline the acquisition, what would change and what would remain the same. The board of Group Health Physicians, a group of 1,400 physician providers that would remain a separate contractor with Kaiser, has endorsed the proposal, as has the Service Employees International Union representing Group Health’s 2,000 nurses and health care workers. Group Health’s Senior Caucus, which includes 400 senior-citizen members of the cooperative, also has endorsed the sale as “the best path forward” to assure that members can continue to receive quality care, see their same providers and maintain affordable premiums.

Addressing the natural unease about the loss of local independent control, supporters of the sale have pointed to the culture that both share. Kaiser, like Group Health, is a nonprofit. As a demonstration of those shared values, Kaiser has pledged to establish a new community foundation, endowing it with $1.8 billion. It will affiliate with the present Group Health Foundation, which will continue independently. Another $800 million will go toward other regional charitable support. And Kaiser has committed another $1 billion for infrastructure improvements and development.

While Kaiser will become Group Health’s “sole member,” Group Health consumers will have an advisory role in decisions. A new board with local membership will run Kaiser in Washington. The Senior Caucus will remain, and a new advisory board will represent patients, employers and brokers.

It’s also no small consideration that Kaiser serves about 1 million Medicaid patients, potentially opening care to more low-income families in the state. Group Health pulled out of the Medicaid market about three years ago.

A meeting for Group Health members who were registered as voting members prior to the announcement of the proposed sale is scheduled for Saturday in Seattle. Voting members have until March 12 to accept or reject the acquisition, which must be approved by two-thirds of those voting.

The importance of local control should not be easily dismissed, but in Kaiser, Group Health appears to have found a partner that will allow for growth and development, improvement of services, continued high-quality care and respect for local voices and priorities.

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