Members of Seattle’s Group Health Cooperative will begin voting Saturday to decide whether the longtime care and coverage provider should be acquired by California’s Kaiser Permanente.
More than 2,000 members of Seattle’s Group Health Cooperative are expected at the Westin hotel Saturday to cast crucial first votes on a proposed acquisition by health-care giant Kaiser Permanente.
The so-called “special meeting” of voting members will launch a referendum on the future of the Northwest institution founded in 1947 by doctors whose notion of integrated care and coverage was once branded as “radical” and “socialist.”
It’s a required step in the deal, which would add Group Health to Kaiser’s 10.1 million members in eight states and Washington, D.C.
Group Health officials will provide details of the acquisition they say is a smart move to ensure the future of the regional co-op, which serves nearly 600,000 members in Washington state and Northern Idaho. It would allow Kaiser, with annual revenues of nearly $60 billion, to acquire Group Health, with $3.5 billion in annual income.
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Backers of the plan agree.
“We see Kaiser as a very compatible, like-minded health system,” said Diane Sosne, a former Group Health nurse and president of Service Employees International Union (SEIU) Healthcare 1199N.
The union, which includes more than 2,000 Group Health nurses and other health workers, has endorsed the acquisition, saying Kaiser is the best choice in an environment of almost inevitable consolidation among hospitals and health-care systems.
“When we weigh on balance, the sale to Kaiser vs. staying where we are, we think that the scale tips,” Sosne said.
Skeptics, however, say they haven’t been given nearly enough information to evaluate the proposal — and too little voice in the process.
“I simply cannot make an informed decision about this because they refuse to give us the documentation that they used in coming to the conclusion that we should dissolve the cooperative,” said state Sen. Maralyn Chase, D-Edmonds, a longtime Group Health member. “I don’t believe I’ve been provided much more than a PR program.”
Chase is among 27,000 registered voting members of the co-op who must approve the deal by a two-thirds majority by March 9 for it to go forward.
Remaining members were barred from weighing in on the proposal, which was announced Dec. 4 — three days too late for them to register under Group Health rules.
Under the plan, officials say Kaiser would pay nearly $1.8 billion to establish a new nonprofit Group Health Community Foundation, with a promise of an additional $1 billion in the next decade for new facilities, staff, technology and research in Washington state.
Group Health’s official name would change to Kaiser Foundation Health Plan of Washington, but it likely will be known as Kaiser Permanente of Washington, spokesman Jackson Holtz said.
Chase, who was tapped by Group Health to represent opposition to the deal, has sponsored a bill in the Legislature, SB 6323, that would require 60 days’ notice of any offer to acquire a nonprofit insurer in Washington state. It’s not clear if such a bill could become law quickly enough to disrupt the Group Health deal.
Dennis Julnes, a former financial analyst for Washington’s Office of the Insurance Commissioner, said he shares Chase’s concerns. A longtime Group Health member who cannot vote, Julnes said he would expect more transparency about such a significant transaction.
“Accreditation standards require prior review, prior approval and prior notice before a change of ownership occurs,” he said.
But Sally Yates, executive vice president and chief counsel for Group Health, said the co-op has been as transparent as possible about the deal.
Group Health has posted the entire acquisition contract on the firm’s website, in addition to an in-depth explanation and answers to common questions. The co-op has held eight town-hall meetings attended by about 1,000 people across the state. Executives and doctors and other staffers have had “thousands of conversations” with patients, colleagues and community members, Holtz said.
“Given the size and complexity of this transaction, there is an abundance of information available,” Yates said.
Julnes countered that Group Health members know nothing about competing bids submitted to acquire the co-op or the financial data underlying the business plan for the proposed deal.
Yates said it would be neither right nor customary for the Group Health Board of Trustees to divulge that kind of information.
“All of the detail our board evaluates over months is not something we or any other organization would provide,” she said. “The board does not invite all enrollees and all members into that process. That would be an abdication of the board’s responsibility.”
Results of Saturday’s advisory vote by the 2,000 attendees will be announced Saturday. All voting members will receive ballots in early February for a decision expected to be announced March 12.
The insurance commissioner’s office will begin review when it receives a formal proposal, known as Form A, from Kaiser officials, who have indicated they’ll file in mid-February, spokesman Steve Valandra said.
After that, it could still take up to a year for the review to be complete, he added.