OLYMPIA, Wash. -- A $25 million takeover of financially fragile KPS Health Plans of Bremerton by Group Health Cooperative has been approved by a Thurston County Superior Court judge despite opposition by doctors.
With the decision by Judge Richard D. Hicks, the group formerly known as Kitsap Physicians Services could be owned and operated by the Seattle-based health maintenance organization within 31 days.
KPS, the last independent medical bureau in the state out of numerous similar nonprofit operations formed mostly by doctors at the county level after World War II, was placed in court receivership under supervision of the state insurance commissioner's office on Aug. 2, 1999.
About 300 doctors are the underlying owners of the group, which operates in 10 counties but remains strongest in Kitsap.
In a ruling Friday, Hicks said he was sympathetic to arguments by doctors and Kitsap County officials who said it would leave Group Health free to move KPS headquarters and 175 well-paying jobs out of the county after a four-year stabilization period.
Nonetheless, Insurance Commissioner Mike Kreidler was within his authority in arranging the deal after his agency managed to dig KPS out of an $8 million hole, leaving no grounds for Bremerton, the county, the county's medical society and three local doctors to intervene in an attempt to block the sale, the judge ruled.
Kreidler has said the group remains on shaky financial footing with a net worth of $4 million as of June 30 and needs the $19 million cash infusion Group Health promised as part of the deal.
Bremerton City Attorney Roger Lubovich said opponents would confer before deciding whether to ask Hicks to reconsider, appeal his decision to a higher court or let the ruling stand.
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