Kaiser Permanente has acquired Geisinger Health and folded it into Risant Health, a new nonprofit formed to create a national value-based care network.
The deal between Kaiser Foundation Hospitals, part of Kaiser Permanente, and Geisinger closed Sunday, almost a year after it was announced. It may be more years before it's known whether Kaiser's ambitious strategy, which hinges on the acquisitions of multiple health systems into Risant, is achievable.
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Tuesday's announcement of the transaction's closing provided few details about Risant's plans beyond what was known a year ago.
Risant isn't looking to fully replicate Kaiser's operating model. Oakland, California-based Kaiser, a $101 billion organization, is distinct in its risk-based contracting strategy. It operates a closed integrated care model in which its 12.5 million health plan members can access coordinated services through a network of 40 hospitals and more than 600 medical offices.
Geisinger President and CEO Dr. Jaewon Ryu, who will transition into the role of Risant's CEO in the coming weeks, said Geisinger will keep its name. Dr. Terry Gilliland, formerly an executive at healthcare artificial intelligence company Cogitativo, was named Ryu's successor in March.
Risant plans to acquire four or five other health systems within the next five years. When asked whether discussions are underway for additional acquisitions and what markets Risant is targeting, Ryu said he has not been privy to that information.
Ryu will report to Risant's board of directors, which is chaired by Kaiser CEO Greg Adams and will include three other Kaiser representatives, plus two from Geisinger and one independent director.
Geisinger's financial results will be reported under Risant. Risant's performance will be included in Kaiser's results as a separate operation, a Kaiser spokesperson said.
Executives have said Risant will be based in Washington, D.C., but have not shared a headquarters location. A trademark application for "Risant" filed early last year lists Kaiser’s corporate office address in California. With the deal closed, Risant will start hiring for corporate employees and leadership positions, the spokesperson said.
“It’s very exciting to finally be at this day and really be able to set forth in earnest on all the work,” Ryu said. “The goal, first and foremost, is to transform health.”
Risant plans to invest at least $100 million in Danville, Pennsylvania-based Geisinger through 2028 to expand care delivery and health plan services in Pennsylvania, according to financial statements. It plans to also set aside at least $115 million a year over the next decade to support research and education initiatives at Geisinger.
Risant plans to operate in a “pluralistic environment,” meaning it will support a network of multiple payers and providers working together to expand value-based care capabilities through best practices, tools and technology, Ryu said.
“Those areas … end up being fairly expensive, and you need a certain size to be able to properly invest and develop those capabilities,” Ryu said.
In 2023, Kaiser reported net income of $4.1 billion, compared with a $4.5 billion loss the previous year.
Geisinger, which has 10 hospitals and its own 600,000-member health plan in three states, reported $366.6 million in net income for 2023, compared with a $833.6 million loss in 2022.