Kaiser Permanente to Acquire Geisinger

The deal must be approved by federal and state regulators. Kaiser, which did not disclose to Mr. Adams what other health systems it might be in talks with regarding acquisitions, said that they hoped to spend $5 billion on Risant in the next five year period, in addition its core operations. The company anticipates adding five or six new health systems to Risant during that time.

Kaiser has built its reputation on providing high-quality healthcare at affordable prices. Kaiser serves 13,000,000 people in eight states, including the District of Columbia. The organization is structured like a health-maintenance organization. It receives a set amount to provide care through a network of doctors and hospitals. It hasn't been able to spread its model across the entire country.

Risant Health is a chance for Kaiser to grow and become more influential. Kaiser had $95 billion of revenue in the last year.

The company was also formed in response to the rapid change taking place within the health care sector. The health insurance industry, pharmacy chains, and other for-profit corporations are grabbing up physician practices and urgent treatment centers to devour more dollars from the health care budget.

Mr. Adams stated that the Risant community health systems would follow Kaiser's model and invest in preventive and technology care to keep their patients healthy so they wouldn't need as much expensive hospital and specialty care.

He said that as national systems and players become more powerful, they are "removing themselves in certain respects" from local communities and community health systems.

M. Adams said that the new venture is "a way to ensure not-for profit, value-based health care is not only alive in this country but also thrives."

Many hospital groups are facing higher costs for labor and supplies as they emerge from the pandemic. Kaiser and Geisinger both reported operating losses for 2022.

Mr. Adams stated that "Covid's real-world experience has shown us the dangers of not having value-based, integrated relationships in our health system and communities."

Geisinger, which has focused for years on improving health care, would gain from the ability of Kaiser to invest in technology and preventive measures that are necessary to keep the population healthy. He said that this model was a good way to improve health in our communities and accelerate the development of these capabilities.

Kaiser, which has specialized in providing health care in arrangements in which it receives a set amount of money, has grown to be one of the biggest insurers on the lucrative Medicare Advantage market. Its private plans are offered as an alternative for traditional Medicare.

Kaiser is not immune from criticism. Some people claim that its financial model can make it slow to refer patients to expensive services. Kaiser has defended their billing practices, saying that its doctors work closely with patients to ensure the best care.