SEATTLE, Sept. 8 /PRNewswire/ -- The Washington managed care plans of Sisters of Providence Health System will be sold to Regence BlueShield, the two non-profit, community-based health care organizations announced today. The transaction is expected to be effective on January 1, 1999. For Providence health plan members, there are no immediate changes in customer service, provider networks or costs of coverage between now and the effective date of the agreement. The acquisition includes about 75,000 members in the following managed care plans: * Providence Health Care, which includes three plans: Choice Option, PPO Option and Providence Coordinated Care, a plan for employees of The Boeing Company. (This transaction does not include Providence Preferred, a provider network.) * Providence Health Plan, a health maintenance organization (HMO) which includes three plans: HMO Option, HMO Choice and Providence Medicare Extra (a Medicare HMO, also called a Medicare "risk" plan). "This agreement allows the Providence Health System in Washington and Regence BlueShield to serve their customers better by focusing on what each does best," said John Koster, MD, Providence Health System senior vice president. "Providence can concentrate on providing quality health care for patients, while Regence BlueShield can concentrate on providing quality health insurance to Washington residents." "This acquisition illustrates our commitment to managed care, and to ensuring that customers in our state continue to have access to quality health care coverage at a reasonable cost," said Rich Nelson, Regence BlueShield president and CEO, whose company covers more than 1.1 million members in Washington. Koster and Nelson also said the acquisition agreement underscores the need for organizations like Providence and Regence BlueShield to work collaboratively in finding solutions that make sense for customers and the health care industry. The decision by Providence to seek a buyer for its managed care plans came after more than a decade of health plan ownership -- and substantial investment -- in its Washington insurance plans. After significant analysis, the Providence Health System decided that the most appropriate way to approach the future was to sell its plans in Washington state. "We've determined that we can make the greatest contribution toward improving community health through the direct provision of care in our statewide network of hospitals, Medalia physician groups and other health care facilities," Koster said. "Providence also remains committed to advancing access for all individuals to quality health care." The No. 1 concern for Providence and Regence BlueShield is ensuring a smooth transition for Providence Health Plan members as they move to Regence BlueShield, beginning January 1, 1999. "It's important to Providence that we transition our members to an organization with similar values. For that reason, we selected Regence BlueShield," said Koster. "Both Regence BlueShield and Providence are deeply rooted in the communities we serve. We share a commitment to improving the health in our communities and to the value of reinvesting what we earn in quality health care -- whether it's in health plans or a delivery system -- for the benefit of people here in the Northwest." Once Providence health plan members have transitioned to Regence BlueShield plans, they will be able to continue receiving care from Providence hospitals, clinics and other facilities, including the Medalia HealthCare network in western Washington. "We are working closely with all of our provider groups to ensure that contracting arrangements transition quickly next year," Nelson said. The plans are also working closely with all current employers and groups who purchase managed care plans from Providence to ensure a smooth transition during 1999 open enrollment periods. The two organizations have developed a process to allow employees affected by the sale the opportunity to apply for job openings within Regence BlueShield and its affiliated health plans, and within Providence Health System. About 170 Providence employees working in Seattle, Yakima and Spokane, and some Oregon-based employees that support Providence members in Washington through a Portland operations center, are affected by the acquisition. Nelson and Koster said that both organizations have met with state and federal regulatory officials to brief them on the agreement. Boards from both the Providence Health System and Regence BlueShield have approved the agreement. Regence BlueShield is the leading health plan in Washington and provides health care coverage to more than 1.1 million subscribers in 16 state counties. Regence BlueShield is a non-profit health plan, one of 55 independent licensees of the national Blue Cross and Blue Shield Association. It is also an affiliate of The Regence Group, an alliance of Northwest health plans which includes: Regence BlueCross BlueShield of Oregon, Regence BlueShield of Idaho and Regence BlueCross BlueShield of Utah. Providence Health System serves communities along the West Coast from Alaska to California. Within Washington, the System operates eight acute care hospitals, four long term care facilities, and five low income and assisted living facilities. Providence Health System also operates two outpatient treatment facilities, comprehensive homecare and hospice services, and more than 50 primary clinics which belong to the Medalia HealthCare network, operated in conjunction with the Franciscan Health System. Fact Sheet Regence BlueShield Acquisition of Providence Health Plans in Washington Acquisition Components: Includes the following managed health plan products and enrollment: * Providence Health Care, which includes three plans: Choice Option, PPO Option and Providence Coordinated Care, a plan for employees of The Boeing Company. (This transaction does not include Providence Preferred, a provider network.) Current enrollment: about 27,000. * Providence Health Plan, a health maintenance organization (HMO) which includes three plans: HMO option, HMO Choice and Providence Medicare Extra (a Medicare HMO, also called a Medicare "risk" plan). Current enrollment: about 48,000. Acquisition Does Not Include: * Providence's Oregon and Southwest Washington (Skamania, Clark and Cowlitz counties) healthplans. Those are covered by Providence Health Plans in Oregon. Acquisition Price: Terms of the sale will not be available until the transaction is finalized, on or after January 1, 1999. Acquisition Timeframe: * The agreement is expected to be effective on or about January l, 1999. * All current members of Providence Health Plans are expected to transition to Regence BlueShield plans beginning January 1, 1999. Providence Health Plans Employees Affected: * 170 Washington-based employees, and some Oregon-based employees (customer service operations center). Providence Health Plans Service Areas: * Clallam, Mason, Thurston, Lewis, Pierce, King, Snohomish, Skagit, Whatcom, Yakima, Chelan, Okanogan, Douglas, Grant, Walla Walla, Adams, Lincoln, Ferry, Stevens, Pend Oreille and Spokane. * This does not include Providence members in Clark, Cowlitz and Skamania counties, who are covered by Providence Health Plans in Oregon. Washington Health Plans Leadership: * Regence BlueShield; Rich Nelson, President and Chief Executive Officer. * Providence Health System: John Koster, MD, Senior Vice President. Non-profit Status: * Both Regence BlueShield and Providence Health System are private, non-profit companies. Regence BlueShield Managed Care Enrollment: * RegenceCare, a health-maintenance organization (HMO): 18,000 members * Selections, a point-of-service (POS) managed care plan: 385,000 members Member Impacts: * As members of Regence BlueShield plans, former Providence health plan members will have access to the Blue Cross Blue Shield Association's network of health care providers in the U.S. and worldwide. * Providence Health System members can call 800-603-2346 if they have questions.
SOURCE Regence BlueShield