Newly Launched Kaiser Permanente Venture Risant Health Acquires Geisinger

Kaiser Permanente is launching a new nonprofit provider organization branded as Risant Health, kicking it off with the acquisition of a fellow integrated health system — Geisinger Health.

Risant Health’s prime directive is to “expand access to value-based care in more communities nationwide,” according to a statement from the two companies. The financial terms of the Geisinger transaction are undisclosed.

“Our mission calls on us to find new ways to promote high-quality, affordable, and evidence-based care with equitable and improved health outcomes,” Greg A. Adams, chairman and CEO at Kaiser Permanente, said in the statement. “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.”

Risant to build nonprofit network

The Geisinger transaction, which is subject to customary regulatory approvals, is only a first step for Risant. In time, the company expects to pick up additional hospitals and health systems. Among their objectives is to construct a network of nonprofit, value-oriented community-based health systems.

Kaiser serves more than 12.6 million members in eight states and the District of Columbia. The nonprofit’s operating revenue reached $93.1 billion in 2021.

Like Kaiser, Pennsylvania-based Geisinger is a massive operation. It includes 10 hospital campuses, a health plan with more than 500,000 members, a research institute and the Geisinger College of Health Sciences, which includes schools of medicine, nursing and graduate education.

The health system employs more than 25,000 people, including more than 1,700 physicians.

“Geisinger is seen within the industry as one of the most forward-thinking non-profit health systems as it relates to infusing value-based care and will participate in shaping the organization’s strategy and operational model,” Scott Fidel, analyst for Stephens, indicated in a research note.

Health systems acquired by Risant will continue to operate as regional or community-based providers within the fledgling company’s value-based platform. Risant Health will operate separately and distinctly from Kaiser Permanente’s core integrated care and coverage model, and Geisinger will not rebrand.

“We know fully replicating [Kaiser’s] closed integrated care and coverage model is not viable in all communities,” Adams said. “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.”

Kaiser has pledged to invest up to $5 billion to launch Risant, including investments in technology, tools and services, to fund operations and integrate other systems, according to Fidel.

The Risant platform is oriented around “value-based care practices and capabilities,” including care model design, pharmacy, consumer digital engagement, health plan product development and purchasing, the company indicated.

“Geisinger is excited for what joining Risant Health will mean both for our system and for the communities we serve in Pennsylvania,” said Dr. Jaewon Ryu, president and CEO of Geisinger Health. “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.”

Post-acquisition, Ryu will become CEO of Risant Health.

Commitments to home-based services

Though Risant’s potential role is uncertain at this point, both Kaiser and Geisinger have made prior commitments to expand their home- and community-based services.

For instance, Kaiser Permanente in 2021 consolidated its home-based care services in Southern California and Hawaii into a single division, branded as Care at Home, with Vice President Angel Vargas at the helm. The division offers home health care, palliative care and hospice in addition to high-acuity services like hospital-at-home.

“We continue to focus on growth and becoming a reliable alternative to the hospital setting in any way regulatorily possible,” Vargas told Hospice News. “Our growth path is still there. We’ve had near double-digit growth over the last two years in volume.”

Geisinger, meanwhile, is a large joint venture partner for the home health and hospice provider LHC Group, which was recently acquired by UnitedHealth Group’s (NYSE: UNH) innovation arm Optum Health.

In 2019, LHC Group purchased a majority share of Geisinger Home Health and Hospice and AtlantiCare Home Health and Hospice, serving patients in New Jersey and Pennsylvania — a JV expected to earn $35 million annually.

Both Kaiser and Geisinger are participating in the hospice component of the value-based insurance design (VBID) payment model demonstration this year.

“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,” John C. Bravman, president of Bucknell University and chair of the Geisinger Health Board of Directors, said in a statement. “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.”