The deal comes on the heels of the completed purchase of Geisinger Health.
Kaiser Permanente’s Risant Health will continue to build out its fleet of health systems with the addition of Cone Health.
In signing a definitive agreement to purchase Greensboro, North Carolina-based Cone for an undisclosed amount, Risant will bring on its second operator, pending regulatory approval, as part of a plan to acquire several systems to form a value-based care network.
Risant completed its first system deal in April when the transaction for Danville, Pennsylvania-based Geisinger Health closed, nearly one year after Kaiser’s subsidiary laid out its blueprint. Following the sale, the nonprofit said it was aiming to add “four to five” more systems over the next half-decade.
Jaewon Ryu, Risant’s CEO, had stated the organization was seeking out “like-minded entities” to acquire after announcing the affiliation with Geisinger. In Cone, Risant gets another system that opens the door to a new market while also operating a health plan.
“Cone Health’s impressive work for decades in moving value-based care forward aligns so well with Risant Health’s vision for the future of health care,” Ryu said in the news release. “Their longstanding success and deep commitment to providing high-quality care to North Carolina communities make them an ideal fit to become a part of Risant Health. We will work together to share our industry-leading expertise and innovation to expand access to value-based care to more people in the communities we serve.”
In Risant’s network, Cone would operate independently and maintain its brand, name, and mission, as well as its own board, CEO, and leadership team.
Cone operates four acute care hospitals, a behavioral health facility, an accountable care organization, and a health plan in North Carolina’s Piedmont Triad area. The system reported $2.8 billion in operating revenue and $197.6 million in net income for fiscal year 2023.
By joining Risant, Cone will reap the benefits of increased capital and access to technology, with Kaiser pledging a commitment of up to $5 billion to the network in the coming years and an expectation to reach a total revenue of $30 to $35 billion.
“Becoming part of Risant Health presents a unique opportunity to shape the future of health care in the Triad, the state, and across the nation,” said Mary Jo Cagle, Cone president and CEO. “As part of Risant Health, Cone Health will build upon its long track record of success making evidence-based health care more accessible and affordable for more people. The people across the Triad will be among the first to benefit.”
Regulators aren’t expected to trip up the deal due to Risant and Geisinger operating in markets outside of North Carolina.
For the first quarter, Kaiser’s earnings showed a hefty net gain of $7.4 billion thanks in large part to Risant’s deal for Geisinger, which brough in a one-time net asset gain of $4.6 billion.
Kaiser will be on the lookout for other systems to acquire, likely with similar characteristics as Geisinger and Cone.
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
Risant Health has signed a definitive agreement to acquire North Carolina-based Cone Health, adding to its value-based care network that includes Geisinger Health.
Like Geisinger, Cone also operates a health plan and allows Risant to enter a new market, while being financially stable as it profited $197.6 million for fiscal 2023.
Risant still has more systems to acquire to reach its intended goal of “four to five” purchases for its ambitious plan to transform value-based care.