Kaiser Permanente's Risant Health completes Geisinger Health acquisition

Kaiser Permanente’s Risant Health has closed its acquisition of Geisinger Health, notching the first step on its ambitious plan to form a multisystem, multiregional value-based care organization.

Oakland, California-based Kaiser Permanente announced the deal alongside the formation of Risant Health and its broader strategy nearly a year ago. The acquisition has been approved by state and federal regulatory agencies and closed March 31, Kaiser Permanente said in a Tuesday release.

Danville, Pennsylvania-based Geisinger, which runs 10 hospitals, was highlighted as an ideal inaugural partner for the budding value-based care platform due to the system’s experience running a roughly 600,000-member health plan.

“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,” Kaiser Permanente CEO Greg A. Adams, who is also the board chair of Risant Health, said in Tuesday’s announcement. “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.”

Jaewon Ryu, M.D., Geisinger’s president and CEO since 2019, is now stepping into the role of Risant Health CEO, according to the announcement. Terry Gilliland, M.D., will fill Ryu’s post at Geisinger once the transition is complete.

Risant Health is a nonprofit subsidiary of Kaiser Permanente, though it operates separately from the system’s core model of a closed integrated care network.

It has a big-picture goal of bringing multiple regional health systems under a single umbrella—“four to five” more over the same number of years—and tapping the expertise of each to build a technology-supported care platform that would improve outcomes and reduce patient costs. Kaiser Permanente promises that the entity will also “help health systems and their patients know how to easily understand, access and navigate to the right care at the right time and place.”

Industry experts have theorized that the broad scale of Risant Health would serve as a bulwark against other large players like UnitedHealth Group, Amazon or Aetna CVS Health. That scale would also give it a leg up when, unlike Kaiser Permanente’s core model, it would need to work with multiple other payers and providers.

Prior financial filings have outlined a commitment from Kaiser Permanente of up to $5 billion, which would support Risant Health’s core capabilities, technologies, tools and future investments.

Risant Health is then making a minimum of $2 billion from that pool available to Geisinger through the end of 2028 to “support necessary hospital, ambulatory facility, technology and other strategic and routine capital," according to the filings, which also outline nine-figure investments in Geisinger’s health plan, care delivery services and research.

Tuesday’s announcement reaffirmed the plan to funnel resources from Risant Health to Geisinger. It highlighted continued expansion of Geisinger Health Plan and plans to give its members “enhanced health insurance options” alongside wider access to clinical programs and health management offerings for patients.

“Geisinger is proud to formally join Risant Health as its inaugural health system, which will accelerate our vision to make better health easier, more affordable and more accessible for the communities we serve,” Ryu said in the announcement. “Geisinger now can extend its vision, strategy and impact to more Pennsylvanians because of the access to an expanded set of tools, expertise and capital that joining Risant Health provides.” 

Kaiser Permanente has not yet shared additional acquisition targets for Risant Health.

Kaiser Permanente logged more than $100 billion in both operating revenues and expenses during 2023. In contrast to 2022’s losses, the nonprofit notched $329 million of operating income (0.3% operating margin) and about $4.1 billion in net profit.