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KPS, Group Health make deal

The long-established Kitsap Physicians Service (KPS) Health Plans was purchased this week by Seattle-based Group Health Cooperative, providing the infusion of cash that not only allowed the locally owned operation to continue in business but also to compete in the volatile insurance and healthcare provider market.

While the new alliance seeks to be more effective and competitive, the acquisition will not affect KPS subscribers, who will continue to receive care from the same physicians as they have in the past.

“KPS has a lot of customer loyalty,” said Group Health Chief Financial Officer Jim Truess.“With adequate financial backing, it has become a more compelling company.”

KPS currently has 170 employees and 50,000 enrollees. Group Health, which also operates in Kitsap County, operates three medical centers with approximately 40,000 enrollees.

The two companies will not merge, but will continue to offer different options, according to Truess.

”We have different customers who want different things,” he said. “Now we will always have a plan that will fit a customer's needs.”

The new alliance will compete with Regence and Premara for business, but will use its local orientation as an advantage.

“The people who work at KPS are your neighbors,” said KPS President Elizabeth Gilje. “They go to your church and your schools. They care about the community.”

KPS has been in receivership since 1999, after its reserves dipped below acceptable levels. Gilje said the organization has gradually stabilized its finances since that time.

The infusion of capital will allow KPS to pay off outstanding notes and become completely solvent, according to a spokesperson.

The ownership change occurred on Oct. 1.

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