Risant Health plans to acquire North Carolina hospital system

Risant Health, the new organization founded by Kaiser Permanente, is planning to add its second hospital system.

Risant has announced plans to acquire Cone Health, based in Greensboro, North Carolina. Cone includes four acute care hospitals, a behavioral health facility, a health plan, and an accountable care organization caring for nearly 200,000 patients. Risant and Cone announced the plans late last week.

The move comes just a couple of months after Risant announced it had completed the acquisition of Geisinger Health in Pennsylvania.

In announcing its plans, Risant Health CEO Dr. Jaewon Ryu lauded Cone Health’s commitment to value-based care.

“Cone Health’s impressive work for decades in moving value-based care forward aligns so well with Risant Health’s vision for the future of healthcare,” Ryu said in a statement. “Their longstanding success and deep commitment to providing high-quality care to North Carolina communities make them an ideal fit to become a part of Risant Health.”

“We will work together to share our industry-leading expertise and innovation to expand access to value-based care to more people in the communities we serve,” Ryu said.

The organizations will need to secure the approval of regulators to complete the deal.

Under the plans, Cone Health will operate independently but will take advantage of resources and support from Risant Health.

Cone Health will retain its name and brand identity, along with its current leadership team and board of directors, the organizations said. Cone employs 13,000 workers and has 1,800 physicians.

Dr. Mary Jo Cagle, president and CEO of Cone Health, said joining Risant Health “presents a unique opportunity to shape the future of healthcare in the Triad, the state, and across the nation.”

“As part of Risant Health, Cone Health will build upon its long track record of success making evidence-based healthcare more accessible and affordable for more people. The people across the Triad will be among the first to benefit,” she said.

Risant has said its goal is to acquire community-based hospital systems focused on providing value-based care.

A nonprofit organization, Risant is based in Washington, D.C. Greg A. Adams, Kaiser Permanente’s CEO, is the chairman of Risant Health’s board and stressed the need for moving away from fee-for-service care.

“Risant Health has put a stake in the ground that care focused on evidence, equity, population health and improved outcomes must be the future of healthcare,” Adams said in a statement. “Models like that of Kaiser Permanente, Cone Health and Geisinger will help make that possible.”

After completing its acquisition of Geisinger in the spring, Risant reiterated its plans to acquire “4 to 5 additional leading community-based health systems over the next 4 to 5 years.”

Cone Health serves an area with strong growth and benefits from a favorable payer mix, with Medicaid and self-pay accounting for less than a fifth of its 2022 revenue, according to Fitch Ratings. Fitch has given Cone Health a stable outlook. Cone Health’s Triad market also boasts some big employers, and Toyota recently announced plans to invest nearly $8 billion and add nearly 3,000 jobs to a battery production plant.

Mae Douglas, chair of the Cone Health board of trustees, said the North Carolina system’s leadership weighed the prospect of joining Risant for more than a year.

“Through this agreement, we will continue to improve upon our long tradition of providing health and well-being to those we serve,” Douglas said in a statement.

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

Kaiser Foundation Hospitals, a division of Kaiser Permanente, is designating up to $5 billion “to support core Risant Health capabilities, technologies, tools, and future investments,” according to financial documents filed last year.

Geisinger, which operates 10 hospital campuses and 134 healthcare sites, has kept its identity since being acquired by Risant Health.

Ryu served as president and CEO of Geisinger Health for five years before becoming the first CEO of Risant Health. Geisinger named Terry Gilliland, MD, as its new president and CEO.

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