In a bold move, executives at the Oakland, California-based Kaiser Foundation Hospitals and the Danville, Pennsylvania-based Geisinger Health on Wednesday, April 26, announced the creation of a superstructure organization that will allow Kaiser and Geisinger patient care organizations to work together under that corporate umbrella.
The announcement, as posted to the Kaiser Permanente website, began thus: “In an innovative move designed to improve the health of communities, achieve better health care outcomes, and improve health care affordability, Kaiser Foundation Hospitals and Geisinger Health are announcing the launch of Risant Health and a definitive agreement to make Geisinger the first health system to join Risant Health to expand access to value-based care in more communities across the country. Upon regulatory approval, Geisinger becomes part of the new organization through acquisition.”
The announcement went on to state that “Risant Health is a new nonprofit organization, created by Kaiser Foundation Hospitals, to expand and accelerate the adoption of value-based care in diverse, multi-payer, multi-provider, community-based health system environments. Risant Health’s vision is to improve the health of millions of people by increasing access to value-based care and coverage and raising the bar for value-based approaches that prioritize patient quality outcomes. In addition to Geisinger, Risant Health will grow its impact by acquiring and connecting a portfolio of like-minded, nonprofit, value-oriented community-based health systems anchored in their respective communities.”
Further, “Health systems that become part of Risant Health will continue to operate as regional or community-based health systems serving and meeting the needs of their communities, providers and health plans while gaining expertise, resources, and support through Risant Health’s value-based platform. Risant Health will operate separately and distinctly from Kaiser Permanente’s core integrated care and coverage model while building upon Kaiser Permanente’s 80 years of expertise in value-based care.”
Greg A. Adams, chair and CEO of Kaiser Permanente, said in a statement contained in the press release, that “Our mission calls on us to find new ways to promote high-quality, affordable, and evidence-based care with equitable and improved health outcomes. Through Risant Health, we will make our value-based care expertise, technology and services available to community-based health systems, like Geisinger, to strengthen their ability to provide value-based care models with a focus on high-quality and equitable health outcomes. We know fully replicating KP’s closed integrated care and coverage model is not viable in all communities. By helping other health systems achieve our value-based quality outcomes and savings in multi-payer, multi-provider environments, we believe Risant Health can deliver a transformative new solution to America’s systemic health care problems. And, given its history in this space, we can think of no better organization than Geisinger to be the inaugural health system to join Risant Health,” Adams said.
Meanwhile, the press release went on to note that, “In becoming part of Risant Health, Geisinger, headquartered in Danville, Pennsylvania, will strengthen its ability to enhance its services to its patients, members and communities across Pennsylvania, while expanding its impact on health care broadly. Geisinger will maintain its name and mission, and will continue to work with other health plans, employed physicians, and independent providers. At the same time, Geisinger will build on its foundation by benefitting from Risant Health’s value-based platform that offers the best in value-based care practices and capabilities in areas such as care model design, pharmacy, consumer digital engagement, health plan product development, and purchasing. As the first health system to become part of Risant Health, Geisinger will participate in developing the organization’s strategy and operational model.”
“Geisinger is excited for what joining Risant Health will mean both for our system and for the communities we serve in Pennsylvania,” said Jaewon Ryu, M.D., J.D., president and CEO of Geisinger Health, in a statement contained in the press release. “Geisinger will be able to accelerate our vision and continue to invest in new and existing capabilities and facilities, while charting a path for the future of American health care, through Risant Health. Kaiser Permanente and Geisinger share a vision for the future of health care, and as the Risant Health name indicates, we believe by working together we will reach new heights in health care and raise the bar for better health for all communities.”
The press release noted that “Jaewon Ryu, M.D., J.D., has been selected to serve as CEO of Risant Health. Dr. Ryu will transition from his current role as president and CEO at Geisinger Health as the transaction between Risant Health and Geisinger closes.” And it noted that “Geisinger and Kaiser Foundation Hospitals are nonprofit health care organizations with similar missions. Both are respected in the industry for their innovation, care quality and focus on improving health in their communities.”
“Our nation and the health care industry have long waited for an organization to step up and lead by bringing forward meaningful solutions to improve health care in America,” said John C. Bravman, PhD, president of Bucknell University and chair of the Geisinger Health Board of Directors. “It is clear now that Kaiser Permanente is that leader, and the launch of Risant Health will make better health easier, more accessible and more affordable for the people and communities we serve in Pennsylvania.”
The press release stated that “Risant Health is a nonprofit affiliate of Kaiser Foundation Hospitals, which will be headquartered in the Washington, DC, metro area. The definitive agreement between Risant Health and Geisinger Health is subject to state and federal regulatory review.”
As the press release noted, “Geisinger is committed to making better health easier for the more than 1 million people it serves. Founded more than 100 years ago by Abigail Geisinger, the system now includes 10 hospital campuses, a health plan with more than half a million members, a research institute and the Geisinger College of Health Sciences, which includes schools of medicine, nursing and graduate education. With more than 25,000 employees and 1,700+ employed physicians, Geisinger boosts its hometown economies in Pennsylvania by billions of dollars annually.” And “Kaiser Permanente is committed to helping shape the future of health care. We are recognized as one of America’s leading health care providers and not-for-profit health plans. Founded in 1945, Kaiser Permanente has a mission to provide high-quality, affordable health care services and to improve the health of our members and the communities we serve. We currently serve approximately 12.6 million members in 8 states and the District of Columbia. Care for members and patients is focused on their total health and guided by their personal Permanente Medical Group physicians, specialists, and team of caregivers.”
In a breaking-news report on the business deal, The New York Times’s Reed Abelson wrote on Wednesday afternoon that “Kaiser will not absorb Geisinger, which will keep its name. Instead, Geisinger, which is headquartered in Danville, Pa., will be folded into Risant Health, a new nonprofit group that will operate independently. Geisinger’s chief executive, Dr. Jaewon Ryu, will serve as Risant’s chief executive when the deal is closed. Federal and state regulators must approve the deal. While Mr. Adams did not say what other health systems he might be talking to regarding acquisitions, Kaiser said it hoped to invest $5 billion in Risant over the next five years, in addition to its spending on Kaiser’s core operations. The company expects to add five or six health systems to Risant in that time,” she added.
Abelson went on to write that “Kaiser, which serves 13 million people in eight states and the District of Columbia, has built a reputation for delivering high-quality care at low costs. The organization operates like a health maintenance organization, in which it is paid a fixed sum to care for someone through a closed network of hospitals and doctors. But it has not succeeded in offering its model broadly across the country. The creation of Risant Health represents an opportunity for Kaiser, which had $95 billion in revenue last year, to become an even bigger and more influential organization by working with other hospital groups and health plans.” And, she added, “The formation of the company is also a response to the rapid changes taking place in the health care industry. Large for-profit companies like health insurers, pharmacy chains and other corporations are scooping up physician practices and urgent care centers and devouring more of the country’s health care dollars.”
This is a developing story. Healthcare Innovation will update readers as new developments emerge.
