Kaiser Permanente’s Risant Health completes acquisition of Cone Health, and more deals are likely

For the second time in less than a year, Risant Health has completed the acquisition of a hospital system.

A subsidiary of Kaiser Permanente, Risant Health finalized the deal to acquire Geisinger Health, the Pennsylvania system, in March.

And on Tuesday, Risant Health announced that it has completed the transaction to acquire Cone Health, based in Greensboro, North Carolina. The systems say the deal has secured all regulatory approvals and was closed on Dec. 1.

Cone Health operates four acute care hospitals, a behavioral health facility, a health plan, and an accountable care organization with nearly 200,000 patients. Risant and Cone announced the deal in June.

But Risant Health isn’t done. Leaders of the organization say the plan is to acquire additional hospital systems.

Even in the announcement of the Cone Health acquisition, Jaewon Ryu, MD, the CEO of Risant Health, alluded to the plans to bring other systems into the fold.

“We are proud to be building a strong group of health systems committed to value-based care in their communities,” Ryu said in a statement. “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.”

Greg Adams, CEO of Kaiser Permanente, said at the HLTH Conference in October that Risant is looking to add more community hospital systems. Adams said Risant is looking to acquire five or six community hospital systems in the coming years. He also said that Risant is in talks with other systems about potential acquisitions, but he wouldn’t disclose potential deals.

Adams said Risant is looking to acquire community hospitals that have demonstrated a commitment to value-based care. He also said that Risant is eyeing organizations that are “financially sound.”

“We’re looking for organizations that are committed to value-based care … we’re looking for organizations that are leaders in their community,” Adams said.

In the acquisition of Cone Health, Risant achieves its goals of adding a value-based care organization with solid finances. Fitch Ratings has given Cone Health a stable outlook, noting that the system enjoys a favorable payer mix and serves an area with strong growth.

Mary Jo Cagle, MD, president and CEO of Cone Health, pointed to the organization’s focus on value-based care.

“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,” Cagle said in a statement.

With the transaction, Risant is the sole corporate member of the North Carolina system, and there was no exchange of cash or purchase in the transaction, officials said.

Cone Health will retain its name and brand, and the system’s local leadership will remain in place. The system will continue working with other health plans, providers, and independent physicians, officials said.

Risant says it has developed a value-based platform to deliver better outcomes, which Cone Health will now be able to utilize. Ristan says Geisinger received the initial release of the new value-based platform in the past few months.

With the deal, Risant Health adds more than 1,100 hospital beds to the young organization.

Cone’s flagship hospital, Moses H. Cone Memorial Hospital in Greensboro is a teaching hospital with 628 beds. Alamance Regional Medical Center in Burlington offers 238 beds, Wesley Long Hospital has 175 beds, and Annie Penn Hospital offers 110 acute care beds.

The North Carolina system has more than 13,000 employees and more than 1,800 physician partners.

At the HLTH Conference in October, Adams said he thinks other health systems would be interested in joining Risant Health because they can expand value-based care and help hospitals improve their financial strength. He said the goal is to improve the cost structure of organizations by 2-3%, and he said he thinks that could be “conservative.”

While those hospitals can benefit from Kaiser Permanente’s strengths, he said the benefits could flow both ways.

“We want to bring those innovations back into Kaiser Permanente,” Adams said.

The Risant acquisition of Cone Health reflects the uptick in hospital deals this year. There were 27 announced hospital mergers and acquisitions in the third quarter of 2024, the biggest number in seven years, according to Kaufman Hall, the healthcare consulting firm.