Kaiser Permanente’s Risant Health, the nonprofit subsidiary created to accelerate the adoption of value-based care in community-based health systems, has finalized its acquisition of Pennsylvania-based Geisinger health system, which has 10 hospitals. The deal was first announced in April 2023. Risant said it expects to acquire four to five additional health systems over the next four to five years.
Through this first acquisition, Washington, D.C.-based Risant brings together Kaiser Permanente’s integrated care and coverage expertise and Danville, Pa.-based Geisinger’s experience in advancing value-based care in a model that includes various payers and a broad network of providers, while serving some of the most vulnerable and marginalized communities.
With the close of the Risant Health and Geisinger transaction, Jaewon Ryu, M.D., J.D., who has served as Geisinger’s president and CEO since 2019, will become the first CEO of Risant Health. As announced in March 2024, Terry Gilliland, M.D., will assume the role of president and CEO of Geisinger once Ryu’s transition to Risant Health is complete.
As the Scranton Times-Tribune noted, financial statements released last May showed that Kaiser Foundation Hospitals designated up to $5 billion “to support core Risant Health capabilities, technologies, tools and future investments” and will invest at least $400 million over the five-year period following closing, the financial statements said.
Risant and Geisinger will work together to create a new value-based care platform that includes best practices, tools, technology and services to support community-based health systems. Risant Health’s value-based platform will support its health systems with a set of technology, services and capabilities designed to deliver superior health outcomes and a lower total cost of care, in diverse business models.
“Risant Health and Geisinger share a vision for the future of health care. Through Risant Health, we will leverage our industry-leading expertise and innovation to increase the country’s access to high-quality and evidence-based health care, which we know improves care quality and the patient and member experience,” said Risant Health’s board chair, Greg A. Adams, in a statement. “We will also learn and benefit from Geisinger and the additional health systems that become part of Risant Health in the future, to help them grow in new ways, be more affordable and bring value-based care to more people.”
Geisinger will maintain its name and mission, continue accepting patients covered by other health plans and continue offering its members a broad network of care providers in addition to Geisinger, Risant said.
“Geisinger is proud to formally join Risant Health as its inaugural health system, which will accelerate our vision to make better health easier, more affordable and more accessible for the communities we serve,” said Ryu, in a statement. “Geisinger now can extend its vision, strategy and impact to more Pennsylvanians because of the access to an expanded set of tools, expertise and capital that joining Risant Health provides.”
When the deal was announced last year, Cindy Lee, chief strategy officer at the Chicago-based Chartis consulting firm and leader of the firm’s strategy practice, noted that “Kaiser and Geisinger have been on different value-based care journeys for quite some time, and coming together to franchise capabilities could make a lot of sense. Many health systems are taking another look at value-based care strategies given shifting demographics, continued increased Medicare Advantage penetration, and companies with deeper pockets seeking to gain access to these lives,” she added. “Shifting to a value-based care model of care can require significant investments in capabilities where scale does matter so partnering makes sense.”
