Kaiser Permanente, a large healthcare group with 39 hospitals and 24,000 doctors in California, announced Wednesday that it has invested in Pennsylvania-based Guy to develop a new company that will operate a nonprofit community health system. He said he plans to acquire Zinger Health.
Kaiser Chairman and CEO Greg Adams said in an interview: “We reach more people. We are driving the affordability of healthcare in this country.”
Both organizations are non-profit organizations.
Kaiser does not absorb Geisinger, and Geisinger retains its name. Instead, his Danville-based Geisinger will be merged into Risant Health, a new independently-run nonprofit. Dr. Jaewon Ryu, CEO of Geisinger, will serve as CEO of Risant once the transaction closes.
Federal and state regulators must approve the transaction. Adams didn’t mention other health systems he may be talking about in terms of acquisitions, but Kaiser will give Risant $5 billion over the next five years, in addition to spending on Kaiser’s core business. The company plans to add five or six health systems to Risant in the meantime.
Serving 13 million people in eight states and the District of Columbia, Kaiser has a reputation for providing low-cost, high-quality care. This organization operates like a health maintenance organization, where a certain amount of money is paid to care for someone through a closed network of hospitals and doctors. However, it has not succeeded in providing the model widely throughout the country.
The creation of Risant Health represents an opportunity for Kaiser, which had $95 billion in revenue last year, to become a larger and more impactful organization by collaborating with other hospital groups and healthcare plans.
The formation of the company is also a response to the rapid changes occurring in the healthcare industry. Large commercial companies such as health insurers, pharmacy chains, and other corporations are buying up doctors’ offices and urgent care centers, further eating into the nation’s healthcare budget.
In line with Kaiser’s model, the local health system under Risant will invest in technology and preventive care to keep patients healthy, so they need less expensive specialist and hospital care. Mr Adams said.
As the country’s system and new players get bigger, “they’re pulling away from our communities and community healthcare systems in some ways,” he said.
This new venture is “a way to truly ensure that non-profit, value-based community health is not only alive, but thriving in this country,” Adams added.
As hospital groups recover from the pandemic, many are struggling with rising material and labor costs. Both Kaiser and Geisinger have reported operating losses in his 2022.
“The novel coronavirus shows that our healthcare systems and communities are at risk without integrated, value-based relationships,” said Adams.
While Geisinger has long focused on improving care, Ryu said health systems will benefit from Kaiser’s ability to invest in the kind of technology and preventative care needed to keep people healthy. I was.
“This model makes sense for us as a way to accelerate and enhance these capabilities and bring better health to our communities,” he said.
Kaiser’s specialization in providing care under fixed-payment arrangements has made it one of the largest insurers in the lucrative Medicare Advantage market. In this market, private plans are sold as an alternative to traditional Medicare.
But Kaiser has not escaped criticism for overcharging the federal government, and some say Kaiser’s financial model means it may take longer to provide expensive services to patients. Kaiser defends its billing practices, saying doctors work with patients to provide the most appropriate care.
This article was originally published in The New York Times.