Healthcare industry experts have turned their attention to the budding Risant Health, a nonprofit formed by Kaiser Foundation Hospitals and Geisinger Health, and what it could mean for value-based care.
On Wednesday, Oakland, California-based Kaiser and Danville, Pennsylvania-based Geisinger announced the launch of Risant, which plans to acquire health systems and create a national network focused on value-based care. If approved by state and federal regulators, Risant will acquire Geisinger as its first member health system.
Kaiser, a $95 billion system spanning eight states and Washington, D.C., pledged to invest up to $5 billion in Risant over five years for technology, tools and services.
"Everybody's focused on the fact that that is the direction healthcare is moving, in particular the reimbursement model. And, as a result, they're trying to plan now for what they need to be doing to take advantage of value-based care focus," said Sarah Ernst, partner at law firm Alston & Bird.
Much of the industry still operates on a fee-for-service basis, where the provider is paid for each service rendered. With value-based care, providers are incentivized to offer high-quality care at a lower cost, and they are paid based on a patient's health outcomes.
Kaiser operates a closed integrated care model, in which its 12.6 million health plan members pay to access coordinated services in inpatient, outpatient and other care settings. Similar to Kaiser, Geisinger offers health plan options to patients and organizes its care model to focus more on population health and preventative care.
The Risant strategy builds on the Mid-Atlantic presence Kaiser already has in Maryland and Virginia. Geisinger's 10 hospitals and 500,000-member health plan spans central and eastern Pennsylvania, complementing Kaiser's footprint.
States such as Pennsylvania and Ohio are good areas to test value-based care, considering the well-established ecosystem of hospitals and health systems, said Nathan Ray, a partner in healthcare and life sciences at consulting firm West Monroe. Risant will be able to build on those connections and take on more risk at scale, he said.
"Nothing that I'm hearing here says that this uniquely lights a fire that they weren't already stoking," Ray said. "Kaiser and Geisinger hopefully ... have been operating some value-based playbook of their own. They both continue to understand the pressures on systems today and are adapting to that. [Kaiser] has always had a special model. That, in and of itself, has often been seen as a unique way of delivering services."
Primary care is often the easiest entry point into value-based care. Its payment models are more aligned with the cost of care, and primary care providers typically manage a wider scope of patient care. Specialty care can be more unpredictable, with varying costs and levels of acuity.
Ray said he sees potential opportunities for Risant and its members to expand into more medical specialties and incorporate the value-based model into those types of care.
Creating a value-based network that aligns providers' and payers' priorities is not easy. Many systems run into challenges when they move past their core operations, such as changes to legal structures or compensation policies, said Neal Shah, shareholder at law firm Polsinelli.
A Kaiser spokesperson said the system's care model may not work in every region, in addition to being slow to scale and requiring substantial capital to enter a new market.
Whether the new Risant strategy will move the needle on value-based care remains to be seen, Shah said.
"These are two systems that have had a lot of success in this area, but it's unclear whether that's something that's transferable," he said. "Does this create a platform for helping other kinds of health systems adopt similar kinds of integrated models, or is this just something that's unique to the cultures and the organization of Kaiser and Geisinger?"
Both systems have adjusted their mindset to consider the whole care continuum, and they have a track record of keeping hospital utilization costs relatively low, Shah said.
As part of the deal, the newly formed Risant and its members can draw on resources from Kaiser, but it will continue to operate as a separate organization. Having the backing of a nationwide brand like Kaiser will likely be a tailwind for the health systems that join Risant, Ray said.
Lauren Berryman contributed.