Kaiser Permanente's Risant Health signs deal to acquire Cone Health

Kaiser Permanente’s Risant Health has named North Carolina’s Cone Health as the second acquisition target on its path toward a multisystem, multiregional value-based care entity.  

Financial terms and a potential timeline of the deal announced Friday were not disclosed, though it still requires regulatory approvals and other customary closing conditions. The organization said they have signed a definitive agreement for the acquisition, and that Cone Health would continue to operate independently should the deal close.

The announcement comes about two and a half months after Kaiser and Risant closed the acquisition of its first health system partner, Pennsylvania-based Geisinger Health.

“Cone Health’s impressive work for decades in moving value-based care forward aligns so well with Risant Health’s vision for the future of healthcare,” Risant Health CEO Jaewon Ryu, M.D., said in a joint announcement. “Their longstanding success and deep commitment to providing high-quality care to North Carolina communities make them an ideal fit to become a part of Risant Health. We will work together to share our industry-leading expertise and innovation to expand access to value-based care to more people in the communities we serve.”

Risant Health is a nonprofit subsidiary of Kaiser Permanente unveiled in the spring of 2023. It operates separately from the system’s core model of a closed integrated care network and instead aims to bring together a small handful of regional health systems to collaborate on a tech-backed care platform it says will improve outcomes and cut costs. Though the member systems would keep their operations separate, experts have suggested that their combined scale would bolster negotiations with larger commercial payers.

Kaiser Permanente, the country’s largest nonprofit health system, has pledged commitments of up to $5 billion in Risant Health over several years. Shortly after the Geisinger deal, the subsidiary’s leadership said it was aiming for “four to five” more health system acquisitions over the next half-decade.

Cone Health is smaller than Geisinger, but still fairly substantial within North Carolina’s Piedmont Triad metro area and the surrounding counties. The nonprofit operates four acute care hospitals, a behavioral health facility, a health plan and an accountable care organization, the latter of which works with nearly 200,000 patients.

Cone Health employs more than 13,000 people as well as over 700 physicians. For its 2023 fiscal year ended Sept. 30, it reported over $2.8 billion in total operating revenue, a $112.3 million operating income (4% operating margin) and a $197.6 million excess of revenue over expenses.

“As part of Risant Health, Cone Health will build upon its long track record of success making evidence-based health care more accessible and affordable for more people,” Cone Health President and CEO Mary Jo Cagle, M.D., said in the announcement. “The people across the Triad will be among the first to benefit.”

Mae Douglas, chair of Cone Health’s board of trustees, said in a statement that the vote to sign a definitive agreement followed “more than a year of work.” The system will maintain its existing brand, leadership team and board, and will keep working with its existing payer and provider partners.

“Cone Health customers will see the same doctors, the same nurses and the same staff in the same locations they do today,” Cagle said. “We do not anticipate changes in the types of care we provide as a result of becoming part of Risant Health.”

Rather, the organizations are promising that the deal will provide Cone Health with Kaiser and Geisinger’s “leadership in value-based care.” Though the announcement did not outline any specific investments in Cone Health stemming from the deal, the organizations said the system will gain “expertise, resources and support through Risant Health’s value-based platform.”

“Risant Health has put a stake in the ground that care focused on evidence, equity, population health and improved outcomes must be the future of health care,” Greg Adams, chair and CEO of Kaiser Foundation Health Plan and Hospitals, as well as Risant’s board chair, said in the announcement. “Models like that of Kaiser Permanente, Cone Health and Geisinger will help make that possible.”