USA — Risant Health has finalized its acquisition of Pennsylvania-based health system Geisinger, signaling the official launch of the new hospital operator formed by California nonprofit giant Kaiser Permanente.
The transaction, which closed approximately a year after its initial announcement and subsequent approval by state and federal agencies, marks the beginning of Risant’s expansion strategy.
Geisinger is the inaugural health system to join Risant, with plans for four to five additional acquisitions over the next five years.
Kaiser officials envision total revenue reaching between US$30 billion and US$35 billion through these acquisitions.
Risant’s mission is to enhance access to value-based care across the United States, a strategy reflecting a broader trend among nonprofit health systems seeking to stabilize operations amidst rising costs and fluctuating patient volumes.
The acquisition of Geisinger provides Risant’s nonprofit participants access to capital and technology, facilitating facility investments and service expansions amid challenging economic conditions characterized by elevated labor and supply expenses.
For Kaiser, Risant presents an opportunity to extend its presence nationally through targeted acquisitions of nonprofit community health systems.
With up to US$5 billion allocated to support Risant, Kaiser aims to broaden its footprint beyond the eight states and Washington, D.C., where it currently operates.
Financial specifics of the Geisinger deal were not disclosed, but it is structured as a member substitution, with Risant assuming ownership and financial responsibilities.
Risant has pledged at least US$2 billion to support Geisinger’s hospital operations through 2028, reflecting a substantial investment in the health system, which reported a net income of US$367 million in 2023 following a loss of US$834 million in 2022.
In addition to financial support, Kaiser has earmarked funds for expanding Geisinger’s health plan and investing in its research and education ventures, further solidifying Geisinger’s position within Risant’s integrated network.
Risant’s emphasis on alternative payment models aligns with Geisinger’s value-based care strategy, which prioritizes patient outcomes and financial sustainability.
However, widespread adoption of such models faces challenges, as fee-for-service reimbursement remains prevalent even in systems committed to value-based care.
With the completion of the acquisition, Geisinger CEO Jaewon Ryu assumes the role of Risant Health CEO, while Terry Gilliland becomes CEO of Geisinger. Risant’s board of directors, comprising representatives from Kaiser and Geisinger, will oversee the operations of both entities.
Despite concerns raised by some stakeholders regarding potential anticompetitive effects, regulatory approval was granted, as Risant and Geisinger operate in distinct markets.
Risant affirmed its commitment to retaining Geisinger employees following the acquisition, contrasting with Geisinger’s previous layoffs, which were unrelated to the acquisition.
Risant’s acquisition of Geisinger underscores a broader trend of nonprofit health systems exploring innovative strategies to address industry challenges, including access to capital and technological advancements.
As Risant begins its journey, its focus remains on delivering evidence-based care and facilitating patient navigation to promote optimal health outcomes.
Notably, Risant has pledged to retain all Geisinger employees following the acquisition, distinguishing its approach from Geisinger’s prior decision to lay off 47 technology workers last summer, a move unrelated to its impending acquisition by Kaiser
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