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Joaquim Cardoso MSc
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April 26, 2023
ONE PAGE SUMMARY
Kaiser Permanente, a not-for-profit health system that serves 13 million people in eight states and the District of Columbia, plans to acquire Geisinger, a community-based health system in Pennsylvania.
- The acquisition is pending approval from federal and state regulators.
The move is part of Kaiser’s plan to create Risant Health, a new company that will invest $5 billion in community health systems over the next five years.
The new venture aims to provide not-for-profit, value-based community health and to address the rapid changes taking place in the health care industry.
- Risant Health will invest in technology and preventive care to keep patients healthy and reduce the need for expensive specialty and hospital care.
- The acquisition will also help Geisinger improve its technology and preventive care capabilities.
The creation of Risant Health represents an opportunity for Kaiser to become an even bigger and more influential organization by working with other hospital groups and health plans.
Covid has really shown not having integrated, value-based relationships puts our health systems and our communities at risk.
DEEP DIVE
Kaiser Permanente to Acquire Geisinger
The New York Times
Reed Abelson
April 26, 2023
Federal and state regulators must approve the deal. While Mr. Adams did not say what other health systems he might be talking to regarding acquisitions, Kaiser said it hoped to invest $5 billion in Risant over the next five years, in addition to its spending on Kaiser’s core operations.
The company expects to add five or six health systems to Risant in that time.
Kaiser, which serves 13 million people in eight states and the District of Columbia, has built a reputation for delivering high-quality care at low costs.
The creation of Risant Health represents an opportunity for Kaiser, which had $95 billion in revenue last year, to become an even bigger and more influential organization by working with other hospital groups and health plans.
The formation of the company is also a response to the rapid changes taking place in the health care industry.
Large for-profit companies like health insurers, pharmacy chains and other corporations are scooping up physician practices and urgent care centers and devouring more of the country’s health care dollars.
In keeping with Kaiser’s model, the community health systems under Risant would invest in technology and preventive care to keep patients healthy, so they would need less expensive specialty and hospital care, Mr. Adams said.
As national systems and new players grow larger, “they are pulling away in some respects from our communities and from our community health systems,” he said.
The new venture “is a way to really ensure that not-for-profit, value-based community health is not only alive but is thriving in this country,” Mr. Adams added.
As hospital groups emerge from the pandemic, many are struggling with higher expenses for supplies and labor.
Both Kaiser and Geisinger reported operating losses in 2022.
“Covid has really shown not having integrated, value-based relationships puts our health systems and our communities at risk,” Mr. Adams said.
“Covid has really shown not having integrated, value-based relationships puts our health systems and our communities at risk,” Mr. Adams said.
While Geisinger has long focused on improving care, Dr. Ryu said the health system would benefit from Kaiser’s ability to invest in the kind of technology and preventive care necessary to keep people healthier.
“This model made sense to us as a way to accelerate and further bolster those capabilities and bring better health into our communities,” he said.
Because it has specialized in providing care under arrangements where it is paid a fixed amount, Kaiser has become one of the largest insurers in the profitable Medicare Advantage market, where its private plans are sold as an alternative to traditional Medicare.
But Kaiser has not been immune to criticism for overbilling the federal government, and some people say its financial model means it can be slow to refer patients for costly services.
Kaiser has defended its billing practices and says its doctors work with patients to provide the most appropriate care.
Originally published at https://www.nytimes.com on April 26, 2023.
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