As it continues to rise from the financial ashes, KPS Health Plans President Elizabeth Gilje says her company is looking forward to the future. The company enters 2001 with fresh financial strength, solid community support, renewed relationships with local doctors and the talent and energy of an enthusiastic staff and executive team.

After being forced into receivership by the state Insurance Commissioner due to years of losses, KPS recorded solid improvement in the first three quarters of 2000. Net income is in the black for the first time in nearly five years.

Other similar insurers around the state have failed repeatedly in modern times with their numbers shrinking from 22 to two over the last decade. The only other survivor is currently negotiating to be acquired by a larger carrier.

According to Gilje, in many ways, the path that led KPS into receivership in 1999 can be traced back to its historic roots. The original company was founded as a medical bureau in 1946 when logging companies and their employee families needed physician-sponsored health care services in small communities on the Olympic Peninsula. That commitment between carrier and community has been strong throughout KPS’ history.

It was that same community support that kept the insurer operating in the late 1960s and again in 1980 when financial problems surfaced. In 1999, after the company was placed in receivership, the community once again stepped up for a third time, helping develop the rehabilitation plan that put KPS back in the black.

“Without local purchasing and community support, there would be no KPS Health Plans,” Gilje said. “The true credit for our current success is found in the participation of local businesses and government in our community planning group. The fact our subscribers want to stay with a local health plan, and the strong commitment local hospitals, physicians and other providers have always made to their patients “

Gilje also noted that community support was reflected in other areas over the years. For example, KPS never left individual markets as larger health carriers have in recent years. “Our corner of the state has remained insured,” she said.

The financial problems KPS suffered in the late 1990s were shared by the entire industry, and large carriers as well as small seemed unable to break the cycle of fluctuating profits and losses. Gilje pointed out that smaller carriers too often tried to emulate the practices of the big carriers by turning to managed care and adopting a philosophy that market share was more important then returns. For small carriers like KPS, that translated into losses that could not be sustained.
“Today, we can look back and say that KPS survived the managed care of the 1980s and the 1990s even though those same kinds of losses forced most of the other small carriers in the state under. Why did KPS survive?” she asked. “Through helping one another in the time of crisis.”

“In fact, it was local hospitals, physicians and providers who stood behind our local health insurance plan and supported our company in bad times as well as good times,” Gilje said ‘’That faith has most recently been demonstrated in a $6 million long term commitment that allowed us to build a new business plan and focus in again on the communities we serve.”

The Office of the Insurance Commissioner, which continues to oversee the receivership process, said KPS is already a success story.

“The community stepped forward in a time of need,’” Commissioner Deborah Senn said. “We have a good team in place and they are on course. KPS Health Plans intends to offer health insurance to local businesses and individuals throughout the Kitsap and Olympic peninsulas for a long time to come.”.