“We could not have asked for a more strategic fit between two organizations”, he said. Kaiser said it will invest in Group Health’s facilities and technology.
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Group Health has offered health plans in Spokane since 1977.
“After an exhaustive process, we recognized that there was a unique opportunity to accelerate our growth and potential through a vastly deepened relationship with Kaiser Permanente by tapping into their exceptional resources, skills, track record and reach”, said Scott Armstrong, president and CEO, Group Health Cooperative, in a news release.
Kaiser Permanente, the California-based health care and insurance provider, says it will acquire another major insurer in Washington state, Group Health Cooperative.
He said in exchange for Group Health, which has annual revenue of $3.5 billion, Kaiser Permanente is contributing $1.8 billion to set up a new Group Health Community Foundation.
Proceed from the acquisition will go to establish a new Group Health Community Foundation, with the somewhat vague description of being “focused on responding directly to Washington’s families and empowering health for all”.
It’s not yet clear what the new name will be, but the move marks a significant milestone in the almost 70-year history of Group Health, which was formed in Seattle in 1947 with a mission of providing integrated health care and health coverage to Northwest consumers.
Regulators and Group Health’s voting members must approve the deal.
Group Health expects to have a series of town hall meetings for its members, followed by a general membership meeting on January 30. Since our founding, Group Health has relentlessly pursued, and boldly taken, the steps required to ensure that our members get the care and experience they want and deserve. Many traditional insurers are rolling out narrow-network plans and seeking to work closely with health-care providers, while hospital systems are launching their own insurance arms. Molina is the state’s biggest managed care player with 35% of the market. It has more than 10 million policyholders nationwide.
Kaiser Permanente is based in Oakland and had $56.4 billion in revenue past year.
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Group Health officials planned to notify the organization’s 7,000 employees about the plans Friday morning.
