Kaiser Foundation Hospitals, a regional subsidiary of nonprofit Kaiser Permanente in California, has announced plans to acquire Geisinger Health, in Danville, Pennsylvania, and make it the first provider to operate under its new, independent nonprofit organization, Risant Health, which will provide low-cost specialty and hospital care.

Kaiser told the New York Times that it will invest $5 billion in Risant over the next five years, by which time it expects to have five or six regional or community-based health systems that provide affordable, value-based care, something that it has not been able to replicate across the U.S. with its health maintenance model, in which it provides care to 12.6 million patients through a closed network of 39 hospitals and 24,000 doctors in eight states in exchange for a fixed sum.

Risant Health, which will operate separately from Kaiser, will keep prices low by investing in technology and preventive care to keep patients healthy.

A nonprofit, Geisinger cares for 300,000 members with a staff of 25,000 and 1,700 doctors, and will help develop Risant Health's strategy and operational model. It will retain its branding and name, and continue working with other health plans, employed physicians, and independent providers.

Geisinger chief executive Dr. Jaewon Ryu, who will also serve as chief executive of Risant Health, says that by joining it, Geisinger will be better able to improve its care model design, pharmacy, consumer digital engagement, health plan product development, and purchasing decisions, without having to change any of its offerings.

“The beauty of this [model] is that it preserves all the localness of Geisinger. The name, brand, headquarters. What we bring to our patients, members and communities will stay exactly the same,” he told local news outlet, The Daily Item.

He also said that Risant Health will “turbo-boost” its ability to offer value-based care, adding more resources to Geisinger programs such as 65 Forward and Fresh Food Farmarcy.

Greg Adams, chair and CEO of Kaiser Permanente, told The NY Times that the idea behind Risant Health was partially formed in response to higher expenses for supplies and labor, partially caused by COVID-19, which has led physician practices and urgent care centers struggling financially to merge with large-for-profit health insurers, pharmacy chains and other companies, which often drive up the cost of care following these deals.

“Covid has really shown not having integrated, value-based relationships puts our health systems and our communities at risk,” he said.

The deal is subject to federal and state regulatory approval, the timeline for which has not been revealed.

No financial details of the acquisition were disclosed.

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