Kaiser Acquires Group Health

This morning, Kaiser Permanente announced it was acquiring Group Health Co-Operative, and its affiliated entities, for a sum of $1.8 billion.

Those funds will be spun off in the “creation of a new, not-for-profit community foundation, with the goal of improving community health. The goal of the foundation is aligned with Kaiser Permanente’s mission and commitment to community benefit and improving community health.”

The transaction is expected to close late in 2016.

Group Health CEO Scott Armstrong had the following statement.

“Throughout our history we have made decisions driven by a commitment to advance our mission and serve those who trust us with their care. 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. Through this acquisition, we’ll better be able to tackle rising health care costs and implement even more powerful technologies to serve our members.”

Armstrong references an RFP process wherein Group Health was soliciting acquisition partners over the last 5 months.

The RFP was an open-secret in the Washington State insurance marketplace, and something we referenced ambiguously in a recent 5 Things We’re Watching.

It’s not entirely clear what benefit this will bring to Group Health members.  The fact sheet and announcement don’t make a strong case for consumer benefits.

The primary benefit to GHC members could come in the form of additional technology applications.  However, Group Health has already been considered ahead of the curve there.

More remains to be seen on this score.  Expect the regulatory process via the OIC to ask questions related to this as well.