Sisters of Providence Health System Announces Sale of Washington Managed Care Plans to Regence BlueShield

    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
     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
     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

SOURCE Regence BlueShield

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