Kaiser’s subsidiary has finalized the deal for the Pennsylvania-based health system. Here are some important points about the much-discussed transaction.
A little less than a year after the deal was announced, Kaiser Permanente’s subsidiary, Risant Health, has finalized the acquisition of Geisinger.
Risant Health announced April 2 that the deal to acquire the Pennsylvania-based health system has been finalized. The transaction generated a great deal of attention and conversation in the healthcare industry when Kaiser Permanente and Geisinger first disclosed the plans in April 2023.
There are several noteworthy developments with the deal, as well as the implications going forward.
Here’s a look at key takeaways.
About Risant Health
When Kaiser Permanente first announced its plans for Geisinger, the California-based organization also announced the creation of a new health system called Risant Health.
In announcing the completion of the deal, Risant Health said it would work with Geisinger to develop “a new value-based care platform that includes best practices, tools, technology and services to support leading community-based health systems.”
Risant, a nonprofit organization, is based in Washington, D.C. Greg A. Adams, Kaiser Permanente’s CEO, is the chairman of Risant Health’s board.
Risant says its goal is to “expand and accelerate the adoption of value-based care.”
More acquisitions coming
Risant Health is beginning with the acquisition of Geisinger, but the plan is to bring other hospital systems into the fold.
With the announcement last week, Risant reiterated that the system plans to acquire “4 to 5 additional leading community-based health systems over the next 4 to 5 years.”
Risant says it will support its health systems with the technology and services to deliver high-quality care at a lower cost.
In addition, Risant also says it will help health systems make it easier for patients to access and find care when they need it.
“Through Risant Health, we will leverage our industry-leading expertise and innovation to increase the country's access to high-quality and evidence-based health care, which we know improves care quality and the patient and member experience," Adams said in a statement. "We will also learn and benefit from Geisinger and the additional health systems that become part of Risant Health in the future, to help them grow in new ways, be more affordable and bring value-based care to more people."
Investing billions
Kaiser is making a substantial investment in Risant.
Kaiser Foundation Hospitals, a division of Kaiser Permanente, is designating up to $5 billion “to support core Risant Health capabilities, technologies, tools, and future investments,” according to financial documents filed last year. Of this amount, Kaiser Foundation Hospitals plans to invest a minimum of $400 million over the five-year period.
Risant Health will provide a minimum of $2 billion as needed through Dec. 31, 2028 to support hospital, ambulatory facility, technology and other needs, according to the documents.
Risant will assure funding of a minimum of $100 million through Dec. 31, 2028 “to support the expansion of Geisinger’s health plan and care delivery services into contiguous communities in Pennsylvania,” according to the statements. And Risant will also ensure a minimum of $115 million annually to finance Geisinger’s research and education enterprises for a minimum of 10 years, following the closing of the deal.
Leaders taking new roles
With the deal now complete, Risant and Geisinger are moving ahead with some changes in the leadership ranks.
Jaewon Ryu, MD, who has served as president and CEO of Geisinger Health for five years, becomes the first CEO of Risant Health. Kaiser Permanente and Geisinger said last year when the deal was first announced that Ryu would lead Risant.
Geisinger has named Terry Gilliland, MD, as the new president and CEO of Geisinger Health. Gilliland will move into his role when Ryu completes the transition to Risant Health, the systems said.
“Leading an organization with this type of history, mission and reputation is the opportunity of a lifetime,” Gilliland said in a statement last month.
Name remains the same
Geisinger, which operates 10 hospital campuses and 134 healthcare sites, isn’t losing its brand.
Risant said Geisinger, whose roots trace back 109 years, will retain its name. The system will continue to accept patients covered by other health plans. Risant also said it would continue to invest in and expand the Geisinger Health Plan.
‘The best technology’
In a post on LinkedIn, Ryu noted a quote from Abigail Geisinger, the founder of the Pennsylvania health system, who said, “Make my hospital right; make it the best.”
Today, Ryu noted that having the best hospital means having “the best technology, digital tools, data and analytics” to improve care and the patient experience.
“That is why Geisinger is proud to formally join Risant Health as its inaugural member, which will accelerate our vision to make better health easier for the communities we serve here in Pennsylvania and to be a part of a solution that we believe can transform health care in America,” Ryu wrote. “And we are excited to join in that path with Kaiser Permanente, a world-class organization and kindred spirit that has long been the gold standard in positively impacting the health of populations and communities.”
Improved finances
Kaiser Permanente’s finances have improved considerably over the past year.
Buoyed by improved performance in the financial market, Kaiser Permanente’s net income was $4.1 billion for 2023, compared to a net loss of $4.5 billion in 2022.
After seeing tens of thousands of union workers go on strike last fall, Kaiser Permanente secured a four-year contract offering raises of 21% over the deal, along with concessions to improve staffing.
Based in Oakland, Calif., Kaiser Permanente operates 40 hospitals and more than 600 medical offices, along with a health plan with more than 12 million members.
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