FHS TO ACQUIRE PACC, 116,000 MEMBER OREGON HEALTH PLAN; Acquisition Significantly Strengthens FHS's Strategic Position in the Northwest.and CLACKAMAS, Ore.,--(BUSINESS WIRE)--April 9, 1997--Foundation Health Systems, Inc. (NYSE NYSE See: New York Stock Exchange : FHS FHS - Filesystem Hierarchy Standard ) today announced that it has reached a definitive agreement to acquire PACC PACC Programa Avançado de Cultura Contemporânea (Portugese; Universidade Federal do Rio de Janeiro) PACC Professional Association of Custom Clothiers PACC Pratt Area Community Council (Brooklyn, NY) , a 116,000 member health plan based in Oregon. Specific terms of the transaction were not disclosed. The transaction is subject to receipt of all applicable regulatory approvals. FHS expects the transaction to close sometime this summer. PACC has health plan operations in Oregon and Washington, with a heavy concentration in the Portland area. FHS has approximately 190,000 members in its Northwest region
The Northwest Region which includes Idaho, Oregon and Washington. In addition, FHS serves more than 227,000 beneficiaries of the Civilian Health and Medical Program -- Uniformed Services (CHAMPUS CHAMPUS Civilian Health & Medical Program for Uniformed Services A health care plan for military dependents and retirees operated by the DoD Types of service HMO, PPO, and fee-for-service, through a single health plan known as TriCare ) in Washington and Oregon. "It is a central feature of FHS's corporate strategy to expand in the regions where we already operate. When we complete the PACC transaction we will have the largest for-profit plan in Oregon and, including CHAMPUS, more than 500,000 medical members in the Northwest. This acquisition sends a clear signal to all our customers and provider partners that we intend to be a leader in this region for some time to come," said Malik M. Hasan, M.D., president and chief executive officer of FHS. FHS was formed by the April 1, 1997 merger involving Foundation Health Corporation and Health Systems International, Inc. FHS is the fourth-largest publicly traded managed health care company in the United States with projected 1997 revenues of more than $7.5 billion. The purchase price, subject to certain adjustments, will be used to endow the Northwest Health Foundation, a permanent charitable organization established by PACC to receive the proceeds of the sale. The foundation will be chaired by former U.S. Senator Mark O. Hatfield and its board will include many prominent Oregonians. "It is very gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. to again play an important role in the formation of a charitable foundation. We are confident it will make many significant contributions to health care efforts in Oregon," Dr. Hasan added. Approximately 15 percent of FHS's outstanding equity is owned by the California Wellness Foundation, a charitable foundation funded when FHS's largest subsidiary, Health Net, converted to for-profit status in 1992. PACC, founded in Portland in 1938, has 116,000 medical members with 108,000 in the Portland area. PACC recorded more than $133 million in revenues in 1996. Approximately 67,000 are in PACC HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, , a commercial health maintenance organization (HMO) with the balance in PACC Health Plans, primarily a preferred provider organization pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. (PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there ). Most of these members are in the greater Portland area while a small number are located in southern Washington. The existing FHS HMO in Oregon, Qual-Med Oregon Health Plan The Oregon Health Plan is the Oregon state healthcare program for low income residents of Oregon. Eligibility Basic eligibility requires that the applicant be a resident of Oregon, as a citizen or otherwise. , Inc., will merge into PACC with the resulting company to be known as FHS of Oregon. It will be housed at PACC's headquarters in Clackamas, Ore., a suburb of Portland. The southern Washington membership of PACC will be transferred to FHS's QualMed Washington Health Plan, Inc. operations. "Clearly, PACC greatly strengthens our position in the Northwest. It will strengthen our product line, thereby enhancing consumer choice. The PACC management is embracing FHS's medical management systems including our new Healthline call center, and we can achieve improved efficiency and customer service through this merger," said Michael D. Pugh, president of FHS's Western Division. "Our board looked for just the right partner so that PACC could build on its 60 years of market experience," said C. Edward Skeeters, M.D., chairman of the PACC board of directors. The combination that will become FHS of Oregon will create a financially strong competitor offering an even broader product line to local, regional and national clients. Martin A. Preizler, current president and chief executive officer of PACC, will become president of FHS of Oregon. FHS is the nation's fourth-largest publicly traded managed health care company. Its mission is to enhance quality of life for its customers by offering products distinguished by their quality, service and affordability. The company's HMO, insured PPO and government contracts subsidiaries provide health benefits to nearly five million individuals in 17 states through group, individual, Medicare risk, Medicaid and CHAMPUS programs. FHS subsidiaries also offer managed health care products related to workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. , PPO networks, behavioral health, dental, vision and prescription drugs, and offer managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs. The company's principal offices are in Woodland Hills and Rancho Cordova, Calif., and Pueblo, Colo. CONTACT: Foundation Health Systems, Inc. Kurt Davis, 916/631-5288 (media contact) e-mail: Kurt_D_Davis@ccmail.fh.com or David Olson, 818/719-6978 (investor contact) e-mail: dolson@hsintl.com or KVO KVO Keep Vein Open KVO Key-Value Observing KVO Kunstvakonderwijs (Dutch) KVO Keeler, Vandyke, O'Brien (KVO Industries; Santa Rosa CA) Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most Rebecca Brandt, 503/721-4257 (PACC contact) |
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