Kaiser Permanente is acquiring Geisinger Health, the companies announced Wednesday. In tandem with the move is the development of a new organization.

Together, the two are creating Risant Health, a new nonprofit group that will operate independently.

“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,” Greg Adams, chairman and CEO of Kaiser Permanente, said in a statement. “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.”

The goal for Risant Health is to expand value-based care to community-based health system environments.

Organizations with at-home care focus

The California-based Kaiser Permanente has increasingly invested in at-home care services over the last several years through its own home health arm, a hospital-at-home program and other technology innovations.

On its end, Geisinger’s at-home service arm — Geisinger at Home — has served more than 11,000 patients across 17 counties in the last four years.

The health system has invested in a number of home health partnerships including ones with startup Tomorrow Health, the virtual reality therapeutics company AppliedVR and LHC Group.

In 2019, LHC Group purchased a majority share of Geisinger Home Health and Hospice and AtlantiCare Home Health and Hospice. LHC Group — meanwhile — was recently acquired by UnitedHealth Group’s (NYSE: UNH) innovation arm Optum Health.

Kaiser is committing to invest up to $5 billion to launch Risant — including investments in technology, tools and services — to fund operations and integrate other systems, according to an investment note from Stephens.

The acquisition could be the tip of the iceberg. In addition to Geisinger, Risant Health has plans to acquire other like-minded health systems once it is up and running.

Future M&A will follow a similar structure. Health systems that become part of Risant Health will operate as is, serving their respective communities with the support and resources of Risant Health’s value-based platform.

Risant Health will also operate separately and independently from Kaiser Permanente’s “core integrated care and coverage model,” according to the company.

Geisinger’s CEO, Jaewon Ryu, will serve as Risant’s CEO when the deal is finalized.

“Geisinger is excited about what joining Risant Health will mean both for our system and for the communities we serve in Pennsylvania,” Ryu said in a statement. “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.”

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