Public Employees Benefit Board

4/22/2009

As you may know, Regence was a finalist for the Public Employees Benefit Board (PEBB) account, and Tuesday we learned that this business, which currently represents about 120,000 members, was awarded to Providence Health Plans.

Regence has served PEBB members for more than 20 years. Because of the superior day-to-day service that we provided to them – which they acknowledged throughout Tuesday’s meeting – this outcome is very disappointing. Their decision is even more disappointing given the tremendous investments that we have made to align with their vision for health care transformation.

As a result, we are deeply concerned that the board’s decision is based on incomplete and inaccurate information. In short, we believe the selection process was flawed, and we have notified the PEBB board of our intent to formally protest their decision. We believe that our actions will ultimately demonstrate to the board that its decision to move the business from Regence to Providence will result in higher costs to PEBB, significant disruption to PEBB members and the providers who serve them, and stall PEBB’s vision.

We will continue to keep you apprised of this situation. In the meantime, today’s outcome provides us with an opportunity to intensify our focus and re-double our efforts to grow the heart of our business. I am confident that the lessons we will learn – and apply – from this experience will make us a much stronger company and competitor.

Thank you.

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