April 14, 2024

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Kaiser Permanente Is Acquiring Geisinger Health, Betting Big On Value-Based Care

Earlier today, two of the country’s most prominent health systems, Kaiser Permanente and Geisinger Health, announced a landmark initiative to promote better health outcomes and increase access to affordable care. Kaiser Foundation Hospitals has created a new non-profit named Risant Health, which will acquire Geisinger Health as the inaugural organization (pending regulatory approval). The goal behind this initiative will be to promote and expand access to value-based care (VBC) throughout the country.

As the press release explains, though Geisinger is the first, many other systems could potentially benefit from this initiative: “Health systems that become part of Risant Health will continue to operate as regional or community-based health systems serving and meeting the needs of their communities, providers and health plans while gaining expertise, resources, and support through Risant Health’s value-based platform. Risant Health will operate separately and distinctly from Kaiser Permanente’s core integrated care and coverage model while building upon Kaiser Permanente’s 80 years of expertise in value-based care.”

CEO, Chair, and leader of Kaiser Permanente, Greg Adams, explains further: “Our mission calls on us to find new ways to promote high-quality, affordable, and evidence-based care with equitable and improved health outcomes. 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…We know fully replicating KP’s closed integrated care and coverage model is not viable in all communities. 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. And, given its history in this space, we can think of no better organization than Geisinger to be the inaugural health system to join Risant Health.”

Value-based care is a growing trend among healthcare organizations, as leaders are increasingly focusing on providing value to patients and improve outcomes, in contrast with other, outdated models. As mentioned in an article by the New England Journal of Medicine, VBC is a “healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.” Indeed, this is a fundamental shift in the way healthcare is delivered.

In fact, VBC is trending so much that venture capital and funding from all sources are flowing into what is poised to be the “next era” of healthcare. Reports indicate that the VBC model is set to grow at nearly 10% annually, and will likely reach a market valuation of more than $6 billion by 2032.

This has lead to a significant proliferation of startups and organizations trying to move into and optimize the arena such as Pearl Health, a technology company which helps independent physicians transition to VBC, or UpStream Health, which provides support services for VBC focused practices.

Dr. Jaewon Ryu, MD, JD, who is the President and CEO of Geisigner Health and has been selected to become CEO of Risant Health, further exclaimed: “Geisinger is excited for what joining Risant Health will mean both for our system and for the communities we serve in Pennsylvania…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. Kaiser Permanente and Geisinger share a vision for the future of health care, and as the Risant Health name indicates, we believe by working together we will reach new heights in health care and raise the bar for better health for all communities.”

Without a doubt, as VBC increasingly becomes a more prominent facet of the industry, more partnerships and collaborations such as this can be expected, with the hope that healthcare delivery one day becomes more accessible, affordable, and ultimately, impact driven.