Risant Health, the nonprofit entity created by Kaiser Permanente, has signed a definitive agreement to acquire North Carolina’s Cone Health, the nonprofit systems said Friday.
Cone would be the second system to join Risant, subject to regulatory approval, following Geisinger Health earlier this year. Financial details of the deal were not disclosed. It is expected to close in early 2025.
Cone would operate independently but draw resources and support from Washington, D.C.-based Risant. It would maintain its brand and have its own board, CEO and leadership team.
Dr. Mary Jo Cagle, Cone’s president and CEO, would continue in her role and report to Risant CEO Dr. Jaewon Ryu.
Cagle said she doesn’t plan to make changes to Cone’s existing leadership team at the moment. If the deal is approved, two Risant board members would join Cone’s board, and one Cone board member would join Risant’s board, she said.
The two organizations were in talks for about a year. Cone enlisted a panel of 14 physician leaders to help with due diligence, Cagle said.
“They were skeptical at first, but when they came back from doing [due diligence], they went to our board of trustees and said, ‘We have to do this deal. This is how we will accelerate our work and broaden the impact of our work,’” Cagle said.
Ryu said he is not expecting pushback from regulators, since neither Risant nor Geisinger operate in North Carolina. Cagle said contact with the state’s governor and attorney general so far has been positive.
Greensboro, North Carolina-based Cone, which reported $197.6 million in net income in its fiscal 2023, has more than 13,000 employees and more than 700 physicians, plus 1,800 partner physicians. It includes four hospitals, a behavioral health facility, an accountable care organization and a health plan.
Contracts or partnerships related to the health plan and accountable care organization will remain in place, Cagle said. Cone hopes to increase the number of value-based contracts in its health plan, most of which are for Medicare Advantage, and grow membership on those contracts, she said.
Ryu said Risant is in discussions to acquire other health systems. The system is looking for “like-minded, mission-aligned” organizations that focus on value-based care, health equity and bringing services closer to where people live, he said.
Greg Adams, Risant’s board chair and Kaiser’s CEO, has said Risant is looking to acquire a handful of other health systems in the next five years.
“Much like Geisinger, I think Cone has walked this talk for many years, and as a result, plays a pivotal role in the health of the community, so the match was absolutely there,” Ryu said.
Cone and Norfolk, Virginia-based Sentara Healthcare ended merger discussions in 2021, saying their communities would be better served by the health systems remaining independent.
Oakland, California-based Kaiser acquired Danville, Pennsylvania-based Geisinger in April and folded it into Risant, a new nonprofit formed to create a national value-based care network. The Risant and Geisinger teams have been working together to implement best practices and build upon the organizations’ capabilities, though it is still early in that process, said Ryu, who was president and CEO at Geisinger.
Risant plans to invest at least $100 million in Geisinger through 2028 to expand care delivery and health plan services in Pennsylvania, in addition to $115 million a year over the next decade to support research and education initiatives.