Sept. 4, 2001
Healthcare Plan Announces Closure
GWUHP Will Stop Soliciting New Customers, Current
Members Directed To GW Web Site for Details
The George Washington University Health Plan
(GWUHP) announced that, after 30 years serving the DC, Maryland, and
Virginia area, it will cease soliciting new customers and begin an orderly
process to discontinue all operations. The final date of Health Plan
operations is expected some time after the end of the year.
The not-for-profit managed-care company, which was formed in 1972 and
maintains a network of more than 4,500 doctors serving the metropolitan
area, announced the decision to close its doors Aug. 22. More than 70,000
members and 175 GWUHP employees are affected by the closure.
The decision follows several years of investigating a variety of options
for the GW Health Plan. The benefits and coverage for GW employees enrolled
in GWUHP through the University will continue through the end of this
year. These employees will receive a letter from the University shortly
after the announcement, providing some details regarding the Fall Open
Enrollment process. Additional information is available through a GW
Health Plan link on the front page of the GW Web site (www.gwu.edu).
“Our options were dictated by the changing climate in the health
industry,” says GW Health Plan Chairman of the Board John F. Williams.
“During the past several years, many health plans, typically smaller
ones or university-sponsored plans such as ours, have gone out of business
or been dissolved. The GW Health Plan has not been immune to these pressures.”
Dr. Williams explains GWUHP found it increasingly difficult to generate
the resources necessary to compete with larger managed care plans. Other
health plans that have closed recently include those owned by Yale,
the University of Rochester, and the Mayo Clinic.
“The Health Plan does not have access to other outside sources
of capital that are required to adequately expand and compete with larger
managed care plans,” explains Dr. Williams. “In addition,
the GW Medical Center is focusing on enhancements to education and research
while divesting its direct ownership of clinical healthcare delivery
operations.”
To that end, the GW Medical Center began implementing a restructuring
strategy in 1997 when it entered into a partnership agreement to operate
GW Hospital. This partnership has paved the way for the construction
of a new hospital, scheduled to open in 2002. In 2000, the Medical Center’s
faculty practice group was reorganized into a separate corporation for
greater flexibility.
While the final date of health plan operations has not been determined,
advance notice will be provided to all members as decisions are made.
The Health Plan intends to maintain its physician, hospital, and other
provider networks through this period, so members will have the opportunity
to continue to see their physicians and receive covered benefits and
services.
“We are a community leader in the Washington metropolitan area,”
Dr. Williams says. “We will continue to provide high-quality service
to our members and will assist them during this transition.”
Send feedback to: bygeorge@gwu.edu
