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Group Health Cooperative and Kaiser Permanente to Explore Closer Ties

SEATTLE and PORTLAND, Ore., Sept. 16 /PRNewswire/ -- Group Health Cooperative of Puget Sound and Kaiser Permanente's Northwest Division today announced they have begun discussions about a closer affiliation that could include expanded joint marketing agreements, co-development of business and clinical systems, or a merger of the two organizations.

Group Health Cooperative, its owned affiliate Group Health Northwest, and Kaiser Permanente together serve over a million people in the Northwest. They each have provided health care in the Northwest for decades, and were the first health plans in the region to be fully accredited by the National Committee for Quality Assurance.

The organizations will explore a closer relationship to meet the needs of Northwest consumers and health care purchasers. Today, employer groups who have employees working in several locations around the country are looking for plans which have broader geographic coverage. Employers also want to minimize the number of plans they deal with in order to save administrative costs.

"We will be looking at ways we could solidify and formalize the ability of our organizations to work more closely together, whether that be through specific working agreements or through a merger," says Phil Nudelman, PhD, president and CEO of Group Health Cooperative of Puget Sound.

Mike Katcher, president of Kaiser Foundation Health Plan's Northwest Division, says, "Increasingly, health care organizations are looking for ways they can work more efficiently. We believe that by working with each other, both Group health and Kaiser Permanente will enhance their quality and cost effectiveness even further."

The organizations have signed a memorandum of understanding that states they will be entering discussions, gathering additional information, conducting due diligence, and discussing options with their respective boards, members, consumer groups, community leaders and others.

The discussions will also include relationships between the respective medical groups. "Our organizations, " says Al Weiland, MD, executive medical director of the Northwest Permanente Medical Group, "are national models for high quality care and have very similar structures, values, and approaches to improving health."

The organizations have a long history of working together. Notable examples are some joint marketing agreements and a coverage reciprocity agreement that allows patients from one of the systems to get care at another.

"We have been working with Kaiser Permanente for decades and look forward to working more closely with them in the future," says Al Truscott, MD, medical director of Group Health Cooperative.

Both Kaiser Permanente and Group Health have formed alliances with hospitals in their communities. For example, in Portland, Kaiser Permanente has alliances with Providence Health System and Oregon Health Sciences University's Doernbecher Children's Hospital. In Seattle, Group Health Cooperative has a three-year-old alliance with Virginia Mason Medical Center. These alliances will continue.

Serving more than 650,000 people across Washington state and north Idaho, non-profit Group Health Cooperative is the nation's largest consumer-governed health care organization. Founded in 1947, the Cooperative operates 31 primary care medical centers, two hospitals, five specialty centers, a research institute, and a skilled nursing facility. Since 1993, Group Health has been in an alliance with Virginia Mason Medical Center. The two organizations have opened three joint clinics, introduced a successful joint insurance product and created the Institute for Healthcare Excellence. Last week they began reconfiguring Seattle-area hospital functions between the two organizations.

Kaiser Permanente is the country's largest health maintenance organization (HMO). Founded in 1945, it is a non-profit, group practice prepayment program with headquarters in Oakland, California. Kaiser Permanente serves the health care needs of 7.4 million voluntarily enrolled members in 17 states and the District of Columbia. Today, it encompasses Kaiser Foundation Health Plan, Inc.; Kaiser Foundation Hospitals; and Permanente Medical Groups. Nationwide they include more than 90,000 employees and 10,000 physicians, representing all specialties. In the Northwest, nearly 400,000 people choose Kaiser Permanente for their health care.

SOURCE Kaiser Permanente
 -0- 09/16/96

/CONTACT: Marc Osborn of Group Health Cooperative, 206-448-4148; or Jan Bellis-Squires of Kaiser Permanente, 503-813-4820/

CO: Kaiser Permanente ST: Washington; Oregon IN: HEA SU:

NL-DM -- LAM083 -- 6119 09/16/96 19:21 EDT
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Publication:PR Newswire
Date:Sep 16, 1996
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