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Seattle-Based Group Health To Be Acquired By The Larger Kaiser Permanente


Group Health, the Seattle-based cooperative founded nearly 70 years ago, has announced it is being acquired by the much larger California-based Kaiser Permanente.

Group Health says nothing is likely to change right away for its employees or its 590,000 policyholders, as the transition is expected to take about a year. After that, Group Health would be operated as a new, eighth region of Kaiser Permanente.  

Kaiser CEO Bernard Tyson said the two health systems, both non-profits and pioneers in managed care, are natural partners.

“We could not have asked for a more strategic fit between two organizations,” he said.

The expected $1.8 billion in proceeds from the sale would be directed to a new not-for-profit community foundation, devoted to “improving health for all.”

The deal still has to be approved by Group Health’s voting members and by regulators, including Washington State Insurance Commissioner Mike Kreidler. Kreidler himself is a former longtime Group Health employee, and a current Group Health policyholder.

“Looking at what they say, it sounds good, but will it bear out? That has to be proven to me before we can make that judgment,” Kreidler said.

The companies say no near-term layoffs are planned, but they did refer to the eliminating redundant costs.

Stephen Tarnoff, president of Group Health Physicians, says he personally endorses the deal.

“I’ve described Group Health as an island of rationality in a sea of chaos that’s health care in America,” he said.

“With this transaction, this acquisition, we’re more than an island now. I think we’re a continent of rationality in a sea of chaos.” 

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