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Consumer voice needed in merger of Group Health and Kaiser Permanente

Wed., July 27, 2016

Supporters of the proposed purchase of Group Health Cooperative by Kaiser Permanente want the deal fast-tracked so new health insurance plans can be in place for the fall open enrollment period.

That’s an overly ambitious time line for Washington Insurance Commissioner Mike Kreidler given the requirements for formal review, but the urgency indicates how anxious many are to make California-based Kaiser a major player in Washington’s health care market.

Two other mergers are pending, and a third was approved in April.

Co-op members have already voted their approval despite misgivings about the absorption of the 600,000-member, Seattle-founded health organization by Kaiser, which has more that 10 million members in eight states and the District of Columbia.

Group Health serves about 64,000 in the Spokane area, and employs 600.

In two public forums Kreidler has held so far, the proposal has also been favorably received by consumers who value Group Health’s business and care model. The last forum begins at 5 p.m. today at the downtown Doubletree Hotel.

The histories and culture of the two cooperatives are much alike. Kaiser, co-founded by Henry J. Kaiser – think Kaiser Aluminum – is among the most-admired health non-profits in the country. Group Health doctors and union representatives, who have been assured there will be no immediate reductions in force, pay or facilities, have strongly endorsed the consolidation.

Although strong and growing now, Group Health cut expenses by $250 million in recent years, in part through layoffs.

Kaiser has committed $1 billion to upgrades of Group Health facilities over the next 10 years, and $800 million in community investment. The transaction itself involves the creation of a new Group Health Community Foundation that will receive $1.8 billion to support research, new technology and other health-related activities.

A similar foundation, Empire Health, founded in 2008 with proceeds from the sale of Deaconess Medical Center and Valley Hospital to Community Health Systems, has been a strong supporter of regional public health initiatives.

The new Kaiser/Group Health would be run by a new board with one-third representation by Group Health officials and members, and a 25-member Consumer Advisory Committee will be established.

Insisting on a strong role for the Washington committee and board members should be fundamental to Kreidler’s consideration of the purchase. Spokane consumers can help drive that point home by testifying today.

Kaiser’s financial resources and capacity to deliver services are unassailable. There’s plenty of need for the total $3.6 billion that would be invested in Washington.