Risant Health Acquires Cone Health in Latest Expansion of Value-Based Care Strategy

The acquisition amount was not disclosed and the transaction was conducted through a non-cash exchange.

Risant Health, a subsidiary of Kaiser Permanente, has officially acquired Cone Health, expanding its footprint in the healthcare sector.

This acquisition follows Risant’s earlier purchase of Geisinger Health, continuing its mission to create a large, regional, value-based care network.

Cone Health, a nonprofit health system operating in North Carolina’s Piedmont Triad metro area, includes four acute care hospitals, a behavioral health facility, a health plan, and an accountable care organization (ACO).

The ACO alone serves nearly 200,000 patients. The system, with over 13,000 employees and 700 physicians, generated more than $2.8 billion in operating revenue in its 2023 fiscal year.

Under the terms of the deal, Risant Health will take over Cone Health as its sole corporate member, although Cone Health will retain its name, brand, leadership, and medical staff. The acquisition amount was not disclosed and the transaction was conducted through a non-cash exchange.

Risant Health’s strategy focuses on expanding value-based care, where health outcomes are improved while keeping costs down.

“We are pleased to officially welcome Cone Health into Risant Health with the close of this transaction. We are proud to be building a strong group of health systems committed to value-based care in their communities. I am eager for Cone Health to bring ideas and expertise to the table to continue to scale access to value-based care and improve the health of millions,” said Risant Health CEO Dr Jaewon Ryu.

Risant Health’s value-based platform will now include capabilities from Cone Health, Geisinger, and Kaiser Permanente, aiming to improve patient care and reduce costs through shared services and advanced healthcare management tools. “Cone Health has been a leader in value-based care for more than a decade. Becoming part of Risant Health accelerates our mission to deliver on the promise of better care at lower costs for all,” said Dr Mary Jo Cagle, CEO of Cone Health.

Financial Investments & Strategic Plans

Risant Health has committed substantial funding to ensure the success of Cone Health’s transition. Over the next five years, Risant will invest at least $1 billion in capital, including both internal and external funding.

Additionally, the acquisition includes a $400 million capital commitment for Cone Health’s initial integration into Risant’s platform, which will include the roll-out of value-based care technologies. Risant Health also pledged up to $300 million to support Cone Health’s growth over the next decade.

Risant Health’s overarching goal is to reach a total revenue of between $30 billion and $35 billion by acquiring regional health systems and bringing them together on a shared technology platform aimed at improving efficiency and patient outcomes.

The company’s value-based care model emphasizes cost reductions through better coordination and technological support.

“We’re estimating a cost reduction of about 2% to 3% through our platform, with around 60% of that coming from the technology and 40% from shared services,” explained Greg A Adams, Chair and CEO of Kaiser Permanente.

He also noted that Risant is in talks with additional health systems for future acquisitions, targeting between five to six systems over the coming years.

The strategic acquisitions by Risant Health signal a growing trend in the healthcare industry towards value-based care, where organizations aim to deliver better patient outcomes while controlling costs.