Kaiser Permanente to acquire Seattle’s Group Health

The nonprofit’s acquisition of Seattle-based Group Health Cooperative, which like Kaiser includes both an insurance arm and health-care providers, would bring about 590,000 new members and a far broader geographic footprint in the state of Washington.

“My chief concern is protecting consumers in Washington”.

According to Kaiser Foundation Health Plan and Hospital’s chairman and CEO, the agreement “is a natural extension of our long, successful working relationship with Group Health and it provides us with the opportunity to expand access to high-quality, affordable care and coverage”.

Added to Kaiser’s already-extensive network will be 25 primary care clinics, 1,000 physicians, 6,900 employees as well as several urgent care and outpatient surgery centers. Approval of the voting members of Group Health Cooperatives and regulators will also be needed. To acquire Group Health, itself a nonprofit, Kaiser plans to spend $1.8 billion, which will go toward the establishment of a Seattle-based foundation focused on improving health in Washington’s communities.

“Our goal is to continue to grow”, said Bernard J. Tyson, Kaiser’s chief executive. “I want to ensure that we maintain the healthy competition and wide selection of plans we now have in our state”. As per Kaiser, the Group Health deal will help strengthen its presence on the West Coast extending from San Diego to Seattle.

Group Health, which faced cuts of $250 million in 2012, has regained a robust financial position and is moving forward with the acquisition out of a position of strength, not weakness, Armstrong said.

The Oakland, Calif.-based Kaiser Permanente has $60 billion in annual revenue and operates in seven regions, including Colorado, Georgia, Hawaii, the mid-Atlantic states, Northern California, Southern California and the Northwest, including OR and parts of Southwest Washington.

By joining together, Group Health and Kaiser Permanente expect to better meet the needs of individuals, as well as large commercial and national accounts with employees who live and work in Washington. But it seems that it has learnt from the missteps and the Group Health deal is an example of a complete different strategy. “Today we are a highly sought after, financially strong and nationally recognized health care organization”, said Susan Byington, chair of Group Health Cooperative’s board of trustees in a statement.

By contrast, Group Health’s operating revenues for 2014 were $3.7 billion.