Group Health moves into fixture under Kaiser name

Changes are once again coming for Seattle-based health carrier Group Health Cooperative, following its acquisition by Oakland-based health insurer Kaiser Permanente, which was completed in early February.

While officials here say the acquisition won't affect health insurance plans or benefits for the more than 65,000 members of Group Health Cooperative in the SpokaneCoeur d'Alene area, the carrier will be changing its name and enhancing facilities and services with the goal of growing its membership.

Angela Matson, a Spokane-based spokeswoman with Group Health, says information about the acquisition has been provided to members on an ongoing basis since the announcement, and Group Health's customer service team has been fielding member questions.

As part of the transition, Matson says Group Health shortly will begin changing its official name to Kaiser Foundation Health Plan of Washington.

"Beginning in March, we will start using the Kaiser Permanente brand name in our new Washington markets," says Matson. "The Kaiser Permanente name, brand, and logo will appear in medical centers, on member identification cards, public websites, and more."

Current Group Health members also will all receive new Kaiser Permanente member identification cards, although their member numbers will stay the same.

As part of the acquisition, Kaiser Permanente has pledged to commit $1 billion over the next 10 years to expand and modernize Group Health's Washington facilities and technology, as well as to improve both care and services. Additionally, Kaiser also plans to invest $800 million over the same time frame in health initiatives that have community benefit.

"Kaiser Permanente is investing in our member experience, including upgrades to our clinics, technology, access, and more," says Matson. "Members should begin to see and feel some of those improvements as early as this year."

Matson says the acquisition won't result in any changes this year to the health insurance plans or benefits of its members, more than 65,000 of whom reside in the Spokane-Coeur d'Alene area.

"Becoming part of Kaiser Permanente does not change the 2017 plan or benefits Group Health members selected during 2016 open enrollment," she says.

"Members can continue to rely on the doctors and care teams they count on, and they will continue to receive care at the same locations and hospitals they did before the acquisition."

According to Matson, the acquisition also won't affect Group Health's current workforce here, which includes about 600 full-time employees.

"Kaiser Permanente will honor all existing union contracts, and nonunion employees will not see changes for a minimum of nine months now that the acquisition is complete," she says.

Following the acquisition's finalization Feb. 1, Group Health CEO Scott Armstrong left the organization, and later that month Andrew McCulloch, who has served as Kaiser Permanente Northwest's president for more than 10 years, announced he'll retire in July.

Despite those departures, Matson says no other leadership position changes are planned.

"Kaiser Permanente Washington currently is led by both health plan and medical group leaders, those being Susan Mullaney, president of the Kaiser Foundation Health Plan of Washington, and Steve Tarnoff, M.D., president and executive medical director of the Washington Permanente Medical Group," she says.

Matson says leadership here in Spokane also will stay the same, with Kelly Stanford continuing in her role as vice president of clinical operations and market integration and Dr. Rosemary Schreoter continuing to serve as the region's physician chief.

As the Journal reported previously, Group Health Cooperative had been seeking a partnership with a larger provider for several years prior to its acquisition, in order to help combat increasing care costs and to stay competitive in the health care market.

In December of 2015, Kaiser Permanente reached a tentative agreement to acquire Group Health for $1.8 billion, and by the following March, Kaiser had filed its application to buy Group Health, following approval by the cooperative's voting members.

The acquisition was finalized when Washington State Insurance Commissioner Mike Kreidler announced his approval.

Kaiser has said the $1.8 billion in proceeds from the transaction will go toward establishing the Group Health Community Foundation, which will focus on improving health for Washington's families and communities.

Susan Mullaney, president of the Kaiser Foundation Health Plan of Washington, says Kaiser Permanente saw the merger with Group Health as an opportunity to grow into new markets.

"America's health care industry is undergoing significant changes, and that includes creation of new- and consolidation of some existing health plans and care provider networks," says Mullaney. "This change in the industry provides Kaiser Permanente with an opportunity to consider growth to new markets, expanding our model of affordable, high-quality care and coverage together."

She says Kaiser's goal in Washington is to double its membership over the next decade.

'The combination of its integrated model, comprehensive medical facilities and interactive technologies will enable Kaiser Permanente to provide its newest members in Washington with personalized care and service on their terms, when and where they want it," she says.

"Through investment in facilities, technology, equipment, and people, Kaiser Permanente plans to improve affordability, quality, and service for members."

Prior to the acquisition, Group Health had over 650,000 enrollees in Washington and North Idaho, including 55,681 members in Spokane County, 7,398 in the Palouse region, and 2,481 in Kootenai County, and an annual revenue of $3.5 billion.

Group Health has offered health plans in Spokane since 1977- According to data provided to the Journal of Business for its latest Health Care Plans list, published in January, Group Health had 66 physicians in Eastern Washington serving patients in 20 Washington counties and two Idaho counties.

As of last Dec. 31, Kaiser Permanente served 10.7 million members in eight states and the District of Columbia.

For 2016, Kaiser Permanente reported $3.1 billion in net income on $64.6 billion in operating revenues, up from $1.9 billion on $60.7 billion in operating revenues in 2015.

The states that Kaiser Permanente serves now include Washington, Oregon, California, Colorado, Georgia, Hawaii, Virginia, Maryland, and the District of Columbia.