KPS Health Plans embraced the challenges of 2001 with fresh financial strength, solid community support, renewed relationships with Kitsap and Olympic peninsula physicians, and the talent and energy of a lean staff and new executive team.

Between December 1999 and January 2001, KPS reduced the size of its administration by 50 percent. Current KPS administration has developed resilience and are training to be flexible and accountable stewards of KPS resources. The executive team has been reinforced through the addition of long term industry personnel who are experienced in managing modern day health care issues.

John Wallen, insurance broker for DiMartino Associates and a former employee of KPS, credits the company’s unwillingness to give up in the face of what many thought would be the end of the venerable KPS name. “Their survival is a credit to the leadership and to the staff who simply would not throw in the towel,” Wallen said.

The year 2001 began with solid financial improvements at KPS. In 2000, KPS recorded a net income of $85,000 on premiums of $73.5 million. KPS was in the black for the first time in nearly five years. The year 2001 has produced additional financial strides. The 2001 financial projections add substantially to statutory reserves. The sales department is selling new accounts throughout the Kitsap and Olympic peninsulas bringing an increased KPS patient base to physician and providers offices. The 2001 budget estimates a 10 percent gain in membership appear achievable.

KPS has established a new advisory board of directors that represent the peninsulas’ hospitals, physicians and businesses. KPS executives are providing open information of KPS practices to this board of directors and appreciate that the company is being managed with sound community support.

In 2000, KPS restarted regional physician meetings throughout the Kitsap and Olympic peninsulas. This two-way communication stream is serving KPS and area physicians well. These regional meetings give KPS the personal opportunity to listen to the needs of the service area. This open communication forum takes KPS back to the roots of the Kitsap Medical Bureau. As a result, physicians are once again referring potential members to KPS and KPS is sending new patients to area physician offices. KPS listened to the comments of service area physicians and in 2001 increased the KPS physician reimbursement schedule by 9 percent, while moving from an antiquated pay scale to a more modern physician pay scale.

In many other ways, KPS is listening to the communities it serves. Another example of KPS community support is remaining in the Individual health insurance market when all of the statewide and national carriers pulled out last year.

Today, KPS can look back and claim that it 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? Through helping one another in the time of crisis. In fact, it was local hospitals, physicians and providers who stood behind this local health insurance plan and supported the company in bad times as well as good. That faith, most recently demonstrated in the recapitalization of KPS, allowed the company to build a new business plan and focus once again on the communities KPS serves.

KPS is most grateful for the support and local purchasing interest of this region. Based on this support, 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.