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Friday, September 29, 2000



Queen’s Health
dropping 4 plans

About 65 of 184 employees
will lose their jobs over
the next few months


By Russ Lynch
Star-Bulletin

Queen's Health Systems said today it is selling two of its health plans to a mainland company and shutting down two others, a move that will affect more than 160,000 members of the four plans.

Queen's Medical Center About 65 of the plans' 184 employees will lose their jobs over the next few months, starting with about 20 positions by the end of this year, said Richard Griffith, president and chief executive of Queen's Health Systems.

Queen's said the remaining staff will likely be hired by Lifemark Corp., the Phoenix, Ariz.-based company that has agreed to buy the Queen's Health Care Plan and Queen's Hawaii Care. Together those plans cover 130,000 people.

Local health care company University Health Alliance, meanwhile, has obtained the rights to sign up the roughly 30,000 members in the other two closing plans, Queen's Preferred Plan and Queen's Island Care.

Dr. Max Botticelli, chairman and chief executive of UHA, said UHA is working with Queen's through the transition and hopes to hire some laid-off workers. UHA currently has 60 employees.

UHA is not buying the closing plans but has an agreement with Queen's to solicit the businesses where the plan members work and expects to offer competitive and comparable plans, Botticelli said. UHA will pay Queen's an unspecified commission for members it signs up.

UHA's business has grown 60 percent over the last 18 months.

The sale of Queen's Health Care Plan and Queen's Hawaii Care to Lifemark, for undisclosed terms, is expected to take place by the end of this year.

Queen's said health coverage for those plans' members will continue uninterrupted and without changes.

The people under the other two plans will lose that coverage as the programs will be shut no later than March 31. However, the arrangement with UHA gives them a chance to pick up comparable coverage.

Taking on the Queen's customers will be a big move for UHA, which was founded by faculty members at the John A. Burns School of Medicine at the University of Hawaii and has grown to provide health coverage for about 50,000 residents.

The agreement with Queen's gives UHA the right to solicit about 1,500 employers who have roughly 20,000 workers enrolled in Queen's Preferred Plan and about 10,000 enrolled in Queen's Island Care.

Queen's "vote of confidence in UHA affirms our similar values as well as our desire to see healthy competition in the health insurance industry," Botticelli said.

Queen's expects to be entirely out of the health-plan business by the end of March, something it has been trying to achieve for more than a year, so it can concentrate on running its hospital and other activities.

Queen's lost money for three years, culminating in a $19 million deficit in 1999, and has been trimming costs and eliminating positions.

UHA is profitable and expects to continue to be, Botticelli said. Information about its health plans was mailed today to the employers who will be affected by the Queen's shutdown of the two plans, he said. UHA has a network of 2,600 participating physicians and health care providers statewide.

Lifemark, with about 600 employees, has regional offices in six states.


Affected health plans

Health plans affected by the changes are:

Bullet Queen's Health Care Plan, formed in 1985. It services more than 90,000 military dependents and retirees who are covered by the Department of Defense Tricare/CHAMPUS program and nearly 26,000 people covered by national health plans. Being sold to Lifemark Corp.
Bullet Queen's Hawaii Care, formed in 1994. A health maintenance organization serving nearly 16,000 people eligible for the state of Hawaii's Med-QUEST program. Being sold to Lifemark.
Bullet Queen's Preferred Plan, a mutual benefit society serving 20,600 people in more than 1,000 companies. Sign-up rights assigned to University Health Alliance.
Bullet Queen's Island Care, a health maintenance organization founded in 1980, which covers 10,200 people. Sign-up rights assigned to UHA.




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