The proposed merger of Group Health Cooperative into the larger Kaiser Permanente health-care chain based in California looks like a deal that could help patients, doctors and the communities they serve.
Some 27,000 voting members of Group Health are now weighing whether to approve the merger that will make Group Health and its 590,000 members in Washington and northern Idaho part of the much larger Kaiser network. Vote results are due March 12, and Kaiser will grow to nearly 11 million members in eight U.S. regions if the pending agreement goes through.
Leaders of both organizations say that combining the deeper pockets of Kaiser with Group Health likely can sustain the level of good care that Group Health became known for regionally over 70 years. Group Health will become Kaiser Health Plan of Washington.
There are many reasons to think the two organizations are a good fit. Both are non-profits founded in the 1940s. Both operate integrated care networks – in other words, acting both as insurers and providers of medical care – and have accepted the other’s visiting patients for years.
The merger will result in some $3.6 billion of expenditures by Kaiser over 10 years. That includes $1.8 billion it is giving to a new Group Health Community Foundation, $1 billion in capital and technology improvements at Group Health facilities, and $800 million for community charity work.
This investment should translate into more medical buildings, renovated clinics and new technology helping patients receive specialty care by video visits, but no new hospital in Thurston County, according to Donna Lynne, a Colorado-based executive vice president with Kaiser Permanente. It also could result in more mental health services locally.
Lynne and Group Health CEO Scott Armstrong told The Olympian Editorial Board during a recent meeting that the two companies will be more able to keep insurance premiums lower by acting together.
Another plus is that Kaiser, which operates in two Washington counties along the Columbia River, continues to accept patients covered by Medicaid, the government paid program for low-income people. Group Health stopped accepting Medicaid clients directly, due to their lower reimbursements, a few years ago – although it does accept about 25,000 through a contractor, Molina Healthcare.
The deal would let Group Health get back to serving Medicaid patients directly, he said.
Due to Group Health’s bylaws, only a fraction of members who have registered over the years to participate are allowed to cast votes on this important issue. Broader participation would be better, but Group Health spokesmen say the bylaws were crafted long ago to discourage one-issue voting.
The state Office of the Insurance Commissioner headed by Mike Kreidler will review the proposal once the parties file their formal proposal – potentially this month. Kreidler must approve the deal before the two nonprofits move forward together.
The review could take six months and would carefully consider impacts on the insurance marketplace, on consumers, and the availability of healthcare services. A spokesman for the OIC said the agency would hold forums around the state.
Neither Armstrong nor Lynne foresee any state or federal regulatory challenges that could block the deal. Unless Kreidler finds flaws, we don’t see a reason not to move ahead either.