Risant Health, a nonprofit formed by Oakland, Calif.-based Kaiser Permanente, has acquired two health systems in the last 10 months and plans to acquire three to four more systems over the next five years to grow into a company with $30 billion to $35 billion in annual revenue.
Fourteen things to know:
1. Risant launched in April 2023 and completed its acquisition of Danville, Pa.-based Geisinger Health, a 10-hospital system, one year later. After the transaction closed, Jaewon Ryu, MD, former president and CEO of Geisinger, was appointed CEO of Risant, with Terry Gilliland, MD, becoming president and CEO of Geisinger.
2. Risant will make a minimum of $2 billion available to Geisinger — inclusive of any Geisinger internally generated and Risant funds — through Dec. 31, 2028, to support hospital, ambulatory facility, technology and other strategic and routine capital.
3. Effective Dec. 1, Risant acquired Greensboro, N.C.-based Cone Health, a five hospital system. Cone Health will maintain its name, brand and mission as well as its board, CEO, leadership team and medical staff, and will continue to work with other health plans, providers and independent physicians.
4. Risant will make a minimum of $1 billion available to Cone — inclusive of any Cone internally generated and Risant funds — through the fifth anniversary of the closing date. The funds will be earmarked for investments in facilities, health equity and other capital projects. Risant will also ensure up to $400 million in funding during the capital commitment period to support Cone's transition, including the initial implementation of the value-based platform. Risant will also ensure up to $300 million in funding in the 10 years following the closing date to support Cone's growth opportunities.
5. Neither deals were structured as traditional acquisitions, with no purchase price or exchange of cash, according to Risant. Both systems will retain their names, brands and missions.
6. Kaiser Chair and CEO Greg Adams told Becker's that competing with disruptors was part of the reason for launching Risant. "As healthcare emerges from the worst effects of the pandemic, we are not seeing sufficient movement toward coming together, but rather a resumption of the pre-pandemic business trends of consolidation, volume-driven care and a worsening of the fragmentation and gaps in our healthcare system," Mr. Adams said. "While some new players share our vision of integrated value-based care for all, we see other new and disruptive market entrants whose business models seem aimed at serving just the healthiest people, which increases fragmentation and ultimately increases the cost of care for everyone."
7. Risant members gain access to its value-based platform, which combines the value-based care tools, capabilities and services from Kaiser, Risant, Geisinger, Cone Health and future health systems to provide health-focused care in multipayer, multiprovider environments.
8. Kaiser Foundation Hospitals designated up to $5 billion to support core Risant capabilities, technologies, tools and future investments. Kaiser will invest at least $400 million for a five-year period after Risant's launch, inclusive of funds generated by Risant.
9. The value-based care platform aims to transform healthcare by shifting the focus from reactive, hospital-based care to proactive, preventive approaches. Its goal is to improve outcomes and streamline care processes by addressing needs upstream — before they become more serious issues. The organization's goal is to improve outcomes, expand care access and reduce healthcare costs, ultimately increasing the adoption of value-based care in the communities that it serves.
10. Risant said it will use new technologies, big data and its scale to help meet its value-based care goals. The platform has three key components: evidence-based care integration for consistent, high-quality outcomes; optimized patient access through digital tools, telemedicine, or urgent care; and provider simplification tools, such as ambient dictation, to reduce clinicians' administrative burdens.
11. Geisinger received the first release of the value-based platform, which began rolling out to the Pennsylvania health system during the third quarter.
12. Risant said it plans to add three to four more "leading community-based health systems" over the next four to five years.
13. Bryce Bach, partner at consulting firm Oliver Wyman, was appointed Risant CFO in August. Mr. Bach served as interim CFO for Risant since May, and began working with the organization in 2022 while at Oliver Wyman. As permanent CFO, he is responsible for financial operations and performance of the system, as well as evaluating new ventures and acquisitions.
14. Kaiser's membership was nearly 12.5 million as of September 30, 2024, including 552,000 members from Risant affiliates. Kaiser's health plan, hospitals and their respective subsidiaries reported $100.8 billion in revenue in 2023, up from $95.4 billion the previous year. Operating income was $329 million (0.3% margin) in 2023, improving on a $1.3 billion loss (-1.3% margin) in 2022.