Group Health Approves Acquisition by Kaiser Permanente

Rejecting critics and community concern, voting members of Seattle’s Group Health Cooperative have overwhelmingly agreed to join with the California health-care giant Kaiser Permanente.

Voting 8,824 to 1,586 in mailed-in ballots, the members approved the move that essentially dissolves the iconic, home-grown cooperative, founded nearly 70 years ago with the mission of providing integrated health care and health coverage to Northwest residents.

The results of the vote were announced Saturday at a meeting at Seattle’s Smith Cove Cruise Terminal that was attended by about 300 co-op members out of an expected 1,000.

The vote was a required next step in the acquisition, which will make Group Health’s 600,000 patients part of Kaiser Permanente’s 10.3 million customers in eight states and Washington, D.C.

“The motion is adopted and the plan is approved,” said Susan Byington, chair of the Group Health Cooperative Board of Trustees, adding later: “I feel an immense sense of gratitude.”

The new entity will likely be known as Kaiser Permanente of Washington.

Approval allows a review by state insurance regulators to go forward. The Kaiser Foundation Health Plan filed required documents this month detailing the deal. Under the plan, Kaiser officials said they would pay nearly $1.8 billion to establish a new nonprofit Group Health Community Foundation and promised to spend an additional $1 billion in the next decade to expand facilities, staff, technology and research in Washington state.

The review, expected to take at least six months, will include regional public meetings about the proposal and a public hearing once the examination is final.

The plan, announced in December, allows Kaiser, with annual revenues of $60 billion, to acquire Group Health, with $3.5 billion in annual income.

Proponents of the proposal — which is backed by Group Health doctors and local union members — said the acquisition is necessary to ensure the future of the co-op in an era of growing hospital and health-system mergers.

Critics said Group Health officials conducted negotiations in secret and actively worked to exclude most of the co-op’s members from weighing in on the decision.

They questioned the goals and oversight of the new, nearly $1.8 million foundation and whether such a dramatic change was necessary now.

About 27,000 members were eligible to cast votes, but only 10,456 were received in the mail, including 46 that were deemed invalid, Byington said.

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