STATE OF WASHINGTON
MIKE KREIDLER Phone: (360) 725-7000
STATE INSURANCE COMMISSIONER
OFFICE OF
INSURANCE COMMISSIONER
March 2, 2011
Dale Zender, Regional Vice President Beth Johnson, Senior Vice President
Financial & Medical Group (CFO) Provider Relations
PeaceHealth St. Joseph Medical Center Regence BlueShield
2901 Squalicum Parkway PO Box 21267 MS:. S909
Bellingham, WA 98225 Seattle, WA 98111-3267
Dear Mr. Zender and Ms. Johnson:
I want to thank you for working with Deputy Commissioner Beth Berendt in this joint effort to
have PeaceHealth st. Joseph Medical Center remain a participating hospital in the Regence
network. Ms. Berendt assures me you are both committed to resolving the contractual
disagreements and coming to reasonable terms before the March 31, 2011 termination date.
I would like to impress upon both parties the need to make meaningful concessions in order for
this to come to resolution. In the current economic climate, the loss of St. Joseph's Hospital
from the Regence network will create a significant disruption to the health care of many
Regence members, and they will not be able to afford to travel to other participating hospitals.
However, these same members, and their employers in Bellingham, cannot absorb additional
premium increases that are being driven by increasing health care trends that far exceed the
medical CPI.
As you are aware, I am authorizing an alternative delivery network for Regence members in the
Whatcom county area. I have no other choice in order to assure that members have adequate
notice to plan for their elective non-emergency medical services. Notices to members must go
out 30 days in advance. I am hopeful, however, that both parties recognize the potential harm
to their members and patients, and will work even harder to come to a resolution.
I also want to be sure that the decision-makers at St. Joseph's realize that many of their patients
cannot change health carriers. Unlike many large employers with multiple health care options
available to their employees, small employers and individual subscribers in Whatcom County do
not have similar choices.
The small group market in this area is generally limited to just one plan option from Premera
Blue Cross or Group Health Cooperative products. Individuals must pass a health screen in order
to change plans - something that is extremely difficult for anyone with a pre-existing condition.
Furthermore, as Group Health Cooperative has a more limited provider network, many
members may be forced to change their primary care physicians, ifthey change plans.
Mailing Address: P.O. Box 40258 • Olympia, WA 98504-0258
Street Address: Insurance Building • 302 14th Avenue SW • Olympia, WA 98504
OFFICE OF INSURANCE COMMISSIONER
Dale Zender, Peace Health St. Joseph Medical Center
Beth Johnson, Regence BlueShield
March 2, 2011
Page 2
I understand that the next meeting between the parties is scheduled for March 11, 2011. In the
meantime, I strongly urge that offers be exchanged and carefully considered. A contract
impasse is not acceptable for the consumers in Whatcom County. Both parties owe it to the
community to come to reasonable terms as soon as possible.
I have asked Ms. Berendt to make herself available for assistance during this process. But let me
be clear: It is the responsibility of Regence Blueshield and Peace Health St. Joseph Medical
Center to resolve this matter in the best interests of the consumers.
Insurance Commissioner