Geisinger to be acquired by Kaiser Permanente

Yes, Geisinger President and CEO Dr. Jaewon Ryu said, it is “technically an acquisition” when Geisinger Health becomes part of the newly formed Risant Health, created by Kaiser Permanente. But because all three entities are non-profits, this is “not your typical acquisition.”

Ryu took center stage in a Zoom media conference Wednesday, hastily organized after a roughly 500-word announcement of the move seemed to spur more questions than answers. The jargon-laden media release issued earlier in the afternoon used the phrase “value-based” 13 times counting the headline and a subhead, without defining it.

The move will make Geisinger part of the newly-formed Risant — in fact, it is the first health system to become part of the organization, and Ryu will become Risant CEO — but Geisinger will retain its identity, employees, and various operations, including the insurance arm of the regional health care giant. “It preserves the name, brand, what we bring to the community and what the community can expect from us.”

Ryu said the move should have no negative impact on regional Geisinger projects already in the works, including a new behavioral health facility in Moosic and cancer treatment center in Dickson city. If anything, Ryu said, the partnership with Kaiser could accelerate ongoing plans.

The acquisition model “is designed to enhance and boost our capabilities, specifically in the value-based space,” Ryu said.

Asked to define that frequently-used term, Ryu said “it means we’re focused on the total health” of people. Traditional health care has long operated on a fee-for-service basis, administered only when patients seek help by visiting an emergency room, clinic or doctor’s office. In most cases, the problem has already developed beyond any preventative care.

Geisinger “has long been on a journey to improve total health,” looking for ways to help prevent and manage health issues, thus reducing the use of acute or emergency care, Ryu said “You’ve got to be able to mange total health care, even when they don’t come to you.”

He cited Geisinger’s at-home diabetes care system, which uses data analysis to determine the people in the system at highest risk or sickest, then brings care into those homes. “We’ve seen the ER use rate for that population drop by 25%” as a result of improvements in home care, Ryu said. “Inpatient care also drops by a similar percentage.

“It’s more valuable to the patient, the community and their employer.”

The move does not mean any direct infusion of new cash to Geisinger. “All health care systems need to be able to stand on their own two feet,” Ryu said, and Geisinger still “needs to be able to support all the plans we have for growth and investment.” Nor should it be thought of as a financial transaction with Risant or Kaiser paying for the acquisition, since they are all non-profits without shareholders but with a similar approach to health care.

Risant will likely bring additional assets and its own investments in ways that improve Geisinger’s work, Ryu said, particularly in data collection, analysis and sue, with more digital capabilities.

For example, he said, Geisinger is “literally at the industry-leading level at how effectively we get people screened” through colonoscopies. But the COVID-19 pandemic prompted many delays in such procedures considered elective or non-urgent, and when the pandemic restrictions subsided, “the question was who do you start with? Who is at highest risk? Data analytics can help you answer that question.”

Ryu also pointed to Geisinger’s system for brain CT scans, in which many scans are initially analyzed by a computerized system to look for high-risk conditions like bleeding or a stroke, prioritizing which scans are seen first by a doctor. Risant should help make such systems more efficient and accurate.

While Geisinger is the first health system to become part of Risant, Ryu said Kaiser anticipates “something like five to seven health systems across the country that are like-minded and share this vision” joining over the next five years.

The move involves government approvals at the state and federal levels, Ryu said, so no concrete timeline has been developed. Asked if he would stay in the area, he said Geisinger will remain headquartered in Danville and “I’ll still be located in this area. I may have to do a little bit more traveling.”