Executives at Kaiser Permanente and Geisinger Health are awaiting word from regulators on whether they can proceed with their proposed deal to create Risant Health.
Oakland, California-based Kaiser announced plans in April to acquire Danville, Pennsylvania-based Geisinger and create a nonprofit entity called Risant that would include Geisinger, along with other health systems, and establish a national network for value-based care. The goal is to acquire five or six health systems over the next five years, forming a $30 billion to $35 billion organization.
Anticipating a 2024 closing of the deal, Kaiser and Geisinger are preparing for the possible integration and building a framework for the new organization. Dr. Jaewon Ryu, president and CEO at Geisinger who would become Risant's CEO, spoke with Modern Healthcare about what the Risant model could accomplish and how it might affect healthcare. The interview has been edited for length and clarity.
Have regulators asked for more information about the deal?
It’s been pretty par for the course, in terms of they want to learn more about the deal. Of course, we're providing all the information that we have, and I think that there's been good conversation and open lines of communication.
Why go with the Risant model as opposed to traditional M&A?
This came on the heels of a four- to five-year strategic planning process. [Geisinger was] looking at how do we … tap into next-generation capabilities, but to do so with a mindset of a fellow nonprofit organization—like-minded, mission-driven, community-based. We think there's a great fit as far as that's concerned with Kaiser.
Why do it through the separate, new nonprofit? A couple of reasons. One is Kaiser and its legacy model. They have always had a pretty integrated model, meaning the patients they see in their delivery system, in their clinical enterprise, tend to carry Kaiser insurance, and the Kaiser members who have that insurance tend to receive the bulk of their care in those Kaiser facilities.
In our model, we have long had something that looks a little more hybrid and mixed. We do operate a health plan but we partner with other health plans, and we take care of their members. We also partner with other health systems and independent physician groups to take care of our members and our health plan. Running that hybrid, pluralistic, multi-payer, multi-provider model was important for us.
Reason No. 2 was to preserve the local “ownership” over the regional strategy, execution, operations, all of those things. When it comes to health care, as the old adage goes, it's so local. The closer your ties to the community, the better the kinds of health outcomes you can yield.
What types of health systems are you looking at for Risant?
[Kaiser CEO] Greg Adams and the Kaiser team, I think they've been pretty consistent on this front, which is really organizations that are nonprofit, mission-minded, community-oriented health systems that are setting out to do things in a value-based care kind of model. I think a hallmark feature of that is not being so hospital-centric. This is a model that seeks to get upstream, whether it's upstream into the clinic and outpatient space or into the home or the virtual space. That’s the goal and purpose of this.
It's also folks in systems that manage populations and focus on things through the lens of what improves the health of this segment of people. It’s folks that have really seen and appreciated and probably been a step or two ahead in terms of data, analytics and technologies to improve the health of populations.
Where are the opportunities for cost savings?
Is there a way to see somebody, address their needs in the ER and discharge them, as opposed to having to admit them? Is there a way to get ahead of that and take care of their needs in a clinic, so they never even have to come to the ER? Is there a way to take care of something in primary care, so that an issue doesn't blossom into something that needs specialty care? Is there a way to move care out of the clinic and into the virtual environment or directly in the home with care management? Anytime you do that, that's going to decrease the total cost of care.
In addition, there are more traditional cost savings, whether it's in supplies and pharmaceuticals and things like that you would see with many other transactions.
What will the integration process look like?
The day-to-day for our communities and for our patients, our members ... I don't think there would be much change.
For employees, I don't think there'll be much impact at all, other than to have access to some of these tools and capabilities over time as they're developed. There's been a lot of focus—and albeit we're still fairly early in the process—just in terms of developing that platform. We're able to participate in some of that work with the preparation for what's to come.
Will Geisinger's branding change?
The Geisinger brand name still stays intact. That's the name that we know is very familiar around here, so it's important to keep that exactly the way it is. The names on the buildings and the brand that you would see—I think none of that changes.
Do you think Risant will have industrywide implications for how care is delivered?
There is going to be a lot of interest for systems that are similarly aligned. They're like-minded in the sense that they're not as hospital-centric. They do want to think longitudinally. They do want to think about communities and populations. They've developed some capabilities but want to invest more deeply in those next-gen capabilities that will make value-based care easier.
It won't be for everybody. If you're a more traditional hospital system, I don't know that this will make the best sense for you, and I don't know that the fit will be there.
What do you hope to see from Risant in the next five to 10 years?
If you listen to [Greg Adams] and the Kaiser folks, I think their vision of Risant is about creating stronger communities that are healthier and seeking [other systems] that are interested in achieving that similar kind of endpoint. We're excited to be the first into this model, so that we're able to participate and contribute some of the capabilities that we've developed over the years.