What Does The Kaiser-GHC Deal Mean For Group Health Physicians

One of the most pressing challenges of any organizational integration is alignment of culture. The best strategic visions can be sidelined quickly if a company’s culture does not support it.

So with the news last week about the Kaiser acquisition of Group Health, the question of cultural alignment of the two organizations is crucial one.

Generally speaking, they don’t seem to be very far off from one another.

Group Health has built a culture around consumer-ownership and the patient-physician relationship.

Kaiser’s culture is similar, but not the same.  From their website:

We make lives better. Whether through technology, communication, innovation, or face-to-face care delivery, what we do makes a difference. Because at the end of the day, it’s all about people.

At GHC, physicians have become in many ways the personification of that GHC culture.  So, I’ve been particularly interested in how this transition might impact – or be impacted by – the physicians at Group Health.

I spent part of this morning talking with Diana Rakow.  Diana is the President of the Group Health Foundation
and Executive Vice President of Marketing and Public Affairs at Group Health Cooperative.  She’s also one of the smartest people in Puget Sound health care and a long time friend.

She explained that the board of Group Health Cooperative (GHC) and the board of its contracted physician group at Group Health Physicians (GHP) worked through the question of affiliation together, concurrently and in parallel.  And, both boards arrived at their conclusion together, “unanimous and in lockstep.”

This affiliation could not have happened without both organizations, Group Health Cooperative and Group Health Physicians, working through this together.

She also explained that the acquisition of GHC did not include GHP.  GHP will continue to remain an independent group, contracted with but separate from GHC.

Rakow informed me that each of the other 7 regions within Kaiser Permanente contract with separate and independent physician groups in an exclusive arrangement to serve as the primary KP physicians in the region.  This is the same model at GHC today where they contract with GHP, and will remain in place moving forward.

The KP physician groups in the other seven regions collaborate together in the Permanente Federation, a loose organization meant to share best practices and other ‘soft’ benefits.

GHP is an affiliate member of that organization.  It will become a full member as part of this transition.

At member town halls this week, GHC leadership discussed the change in control of delivery and care at GHC.  However, the benefits of closer alignment with an organization culturally aligned with GHC would more than offset those changes, they argued.

On the other hand, some have commented to me privately over the years that GHC’s physician leaders can sometimes be a challenge to keep aligned with the overall GHC vision.  Like many physicians, but particularly within the GHC and GHP culture, their independence is prized.

It remains to be seen how the growing pains associated with this deal will impact Group Health Physicians, and how well they will respond.  In the near term, one might expect a good deal of excitement and comity.

Over time, contracting with a large, national plan based in Oakland will likely bring different challenges to Group Health Physicians than those which arrive through working with their independent, member-governed health plan based in Seattle.