Kaiser Permanente Discloses Timeline, Financial Commitments For Its VBC Megadeal With Geisinger Health

Disclosures included in Kaiser Permanente’s quarterly financial statements offer new details on the timeline for its major value-based care deal with Geisinger Health, as well as the upper and lower limits of its investment commitments toward the new entity and expanding Geisinger’s Pennsylvania market presence.

The statements, released late Monday, recap the definitive agreement announced by the integrated health systems in late April—Kaiser will create a separate non-profit called Risant Health, that would then acquire Geisinger and become its sole member.

Risant would, according to the statements, strategically aim to “expand and accelerate the adoption of value-based care in diverse, multi-payer, multi-provider and community-based health system environments.” Kaiser leadership has also said that Risant would accomplish those goals with “five or six” additional health system acquisitions.

Monday’s filing, however, shares that Kaiser doesn’t expect its deal to close until some time in 2024.

Additionally, the system’s financial commitments into Risant are slated to be made “over the five-year period following closing,” while committed investments and support by Risant into Geisinger will be made through Dec. 31, 2028, according to the filing.

As for the investments themselves, Kaiser leadership previously said it planned to shift $5 billion of the system’s funds into support for the new entity. Per the filing, that $5 billion toward “core Risant Health capabilities, technologies, tools and future investments” represents the upper limit of Kaiser’s potential support, with Kaiser also committing to a minimum investment of $400 million over five years “inclusive of funds generated by Risant Health.”

Risant would then be on the hook to make available to Geisinger a minimum of $2 billion (inclusive of funds generated internally by Geisinger and Risant) through the end of 2028 to “support necessary hospital, ambulatory facility, technology and other strategic and routine capital,” Kaiser wrote.

Further, Risant must assure funding “of no less than $100 million” through 2028 to support expansions of Geisinger’s health plan and care delivery services into bordering Pennsylvania communities (again inclusive of internally generated funds), according to the statements.

Finally, Kaiser wrote that the agreement requires Risant to keep a minimum of $115 million available annually (inclusive of internally generated funds, and adjusted for inflation and other factors) to fund Geisinger’s research and education efforts for at least 10 years after the deal’s close, the system wrote.

Kaiser and Geisinger’s deal is still subject to regulatory approvals, though antitrust agencies have so far been hesitant to challenge deals involving healthcare entities operating in different markets.

Monday’s disclosures came alongside a more fleshed-out report of Kaiser’s first-quarter financials. The integrated giant said it brought in $1.2 billion in net income and $233 in operating income, a welcome turnaround after it lost $4.5 billion across 2022.

The Oakland, California-based nonprofit reports over $95 billion in annual operating revenues and spanned 624 medical offices, 39 hospitals and 43 retail and employee clinics as of March 31. It counted a total of 12.7 million members as of March 31.

Danville, Pennsylvania-based Geisinger reported $6.9 billion in revenue, a $239 million operating loss and a $842 million net loss across 2022. Its 133 care locations, including 10 hospital campuses, are primarily focused in central and northeastern Pennsylvania. It counted roughly 612,050 members as of Dec. 31 and had cared for nearly 1.2 million people across 2022.


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