Dive Brief:
- Group Health Cooperative, based in Seattle, received the approval of its voting members to be acquired in a deal with California-based Kaiser Permanente, The Seattle Times reports.
- The vote was a landslide victory of 8,824 to 1,586 and moves the acquisition process forward to the point of a review by state insurance regulators.
- Group Health, which has a local history of nearly 70 years, will now likely be called Kaiser Permanente of Washington.
Dive Insight:
The deal is expected to expand Kaiser's footprint in the Northwest and bring the system an additional 600,000 patients and $3.5 billion in annual income. Kaiser currently has 10.3 million customers and annual revenues of $60 billion.
The acquisition deal was signed in December 2015 and the review process is now expected to take another six months or more, The Seattle Times reports.
The plan involves Kaiser paying almost $1.8 billion to create a new Group Health Community Foundation to oversee the deal and then providing an additional $1 billion over the next 10 years to fund upgrades and expansions to facilities, staff, technology, and research.
Group Health providers have supported the deal, which they say will ensure the system's survival as others also grow larger.
Proponents of the proposal — which is backed by Group Health doctors and local union members — argue the acquisition is necessary to ensure the future of the co-op in an era of growing hospital and health-system mergers. Opponents question the need for the deal and suggest most of the co-op's 27,000 members who were eligible to vote were excluded from discussions.