Kaiser-backed Risant Health completes Cone Health acquisition

Kaiser Permanente-backed Risant Health acquired Cone Health on Sunday, making it the second health system to join Risant in less than a year.

Cone is following in the footsteps of Geisinger Health, which was folded into the newly-formed Risant in March. Kaiser created Washington, D.C.-based Risant earlier this year as a nonprofit entity to buy systems and form a national network for value-based care.

Related: Kaiser-backed Risant Health to acquire second hospital system

Risant said in a Tuesday news release there was no purchase price or cash exchange. No additional financial details of Sunday's deal were disclosed.

"Having two of these close in one year has made for a pretty busy year," said Dr. Jaewon Ryu, CEO at Risant. "It's great to get on the other side of the regulatory approvals and finalize welcoming [Cone] into Risant Health."

Ryu said there are ongoing discussions with other health systems to bring them into the Risant network. He said Risant is on track to have five or so member systems within the next five years but did not provide further details.

Risant is looking for systems that are financially sustainable and have a legacy of quality, Ryu said.

"They have to be walking the talk around value-based care, if you will," he said. "This kind of transformative work is never easy, and it goes better when systems are already building from a solid core reputation within their respective communities."

Planning is underway for integrating Cone's clinical and IT operations with Risant, in addition to plans to meet with colleagues at Geisinger, said Dr. Mary Jo Cagle, president and CEO at Cone. Cone's leadership team, including Cagle, will remain in place, as will the Greensboro, North Carolina-based health system's branding, according to the news release.

Risant will appoint two members to Cone’s board, and Cagle said one Cone board member will join Risant’s board. She said she doesn't foresee layoffs tied to the transaction.

"It's very normal when change occurs for people to have uncertainties or fears, and my biggest concern is that I do a good job in communicating to the local team what is going on," Cagle said.

Cone will operate independently but have access to resources from Risant. Risant pledged a minimum of $1 billion in capital to Cone over the next five years to support facility investments and other capital projects. Risant also agreed to provide up to $400 million to support Cone's integration process, in addition to $300 million over the next decade to support growth opportunities, according to Kaiser's second-quarter unaudited financial report, which included information about Risant.

Cone, which operates four acute care hospitals and more than 150 outpatient sites in North Carolina, reported a 5.3% operating margin leading up to the Risant transaction. Cone posted $364.8 million in net income in the first three quarters of 2024, compared with $197.6 million in the year-ago period, according to its most recent financial report.

Adding Cone to the network boosts Risant's plans to build a value-based care platform for its member systems.

Risant began rolling out the platform at Geisinger earlier this year. It is implementing care guidelines for primary care providers and will expand those guidelines to specialty care in the coming weeks, Ryu said. The guidelines will eventually roll out at Cone as well, he said.

He said Risant is also assessing ambient listening technology and patient triage capabilities as part of the platform.

"It's very much intended to be an iterative platform where we take the best practices and the greatest learnings across ... these systems and incorporate it to yield better outcomes for people in communities," Ryu said. "There's a lot to be said for finding like-minded systems that are on this journey toward value-based care."

Correction: An earlier version of this story incorrectly said two Risant Health board members would join Cone Health’s board.