Health care in this country has improved and saved the lives of millions, often eliminated pain and found cures for the foulest maladies. Ironically, the one thing it can't seem to cure is itself.

The health insurance system in America continues to bloat - commanding more dollars from employers, weighing more on the minds of its beneficiaries and morphing into a morass of excuses and esoteric jargon from its providers and the doctors handcuffed to it. And it's getting worse. The only remaining questions are, when will the system rupture and what will health care look like in the aftermath?

"The way things are going will drive insurance out of the system - people will just not be able to pay for it," says Elizabeth Gilje, CEO of KPS Health Plans, a 60-year-old health insurer in Bremerton. "Coverage for an entire family is often more than a house payment. I never imagined as a health insurance analyst that the cost of health insurance would be over 10 percent (of earnings). Now it's 25 to 30 percent. So they [families] drop out or they go to single coverage."

Prior to Gilje's arrival, KPS was an example of the hemorrhaging system. The company found itself $6.2 million in debt, in part the result, Gilje (pronounced "GIL-lea") says, of a sagging stock market, a lack of control of its physician network and too many entities claiming a piece of the pie.

"Out of every health care dollar, there was an expectation that 85 cents would go to health care delivery," she says. "But the network administration took a slice, the carrier administration took a slice, the broker administration took a slice and there wasn't 85 cents left."

The company was losing $500,000 a month. KPS owed doctors money, and it had fallen under the state's requirement that it have a minimum net worth of $3 million.

INTO RECEIVERSHIP
State insurance commissioner Mike Kreidler brought the company into receivership in August of 1999. The KPS administration and board were removed. A new board was installed, as was a hiring committee, of which Gilje was a member. The hiring committee was looking for a CEO.

"My 82-year-old mother said I should take the job," says Gilje, who has been a health care consultant and analyst for 27 years. She took the job. Gilje, instructed by the insurance office to run the company conservatively, gradually nursed KPS back to health, cutting costs and eliminating staff. KPS had at one time 217 employees; Gilje took it down to 92. She restarted regional physician meetings on the Kitsap and Olympic Peninsulas. She repaired company culture by putting every employee on an equal standing by starting casual dress and open-door policies.

"I knew that if I had 92 sales people responsible for the company that we would survive," Gilje says. "We grew 8 to 10 percent a year."

By 2002, she had increased its physician reimbursement schedule and pay scale. In 2004, the commissioner's office granted her permission to think of ways to make more money - and she did.

"They said, 'Do what you need to do,'" Gilje says. "So really, at that time, we were able to start doing business like we needed to."

By 2005, the company was paying off its debts and had developed a model to generate and keep revenue. But it didn't have enough cash reserves or that minimum $3 million in net worth. As a result, Kreidler sold KPS in October of 2005 to Group Health Cooperative of Seattle. Premera Blue Cross of Mountlake Terrace was the runner-up bidder. For nearly a year, KPS has been a wholly owned subsidiary of Group Health.