May 24—A Kaiser Permanente-created nonprofit would make substantial funding available to Geisinger Health under a pending acquisition, recent financial statements suggest.
The California health care giant and the Danville-based health system with a pronounced presence in Northeast Pennsylvania announced in April plans for the newly formed Risant Health, a nonprofit created by Kaiser Foundation Hospitals, to acquire Geisinger under a deal subject to regulatory approval.
Geisinger would become the first system to join Risant, which will operate independently and plans to grow by acquiring and connecting additional nonprofit health systems with a goal of expanding access to value-based care in more communities. Officials noted Geisinger will operate independently under Risant and retain its name and brand.
Financial statements released earlier this month for Kaiser Foundation Hospitals, Kaiser Foundation Health Plan Inc. and their subsidiaries reference the pending transaction and provide more detail on what the deal may deliver for Geisinger, which reported an $842 million loss last year amid significant industry headwinds, inflationary pressures and struggling investment markets. Kaiser expects the transaction to close in 2024.
Kaiser Foundation Hospitals designated up to $5 billion “to support core Risant Health capabilities, technologies, tools and future investments” and will invest at least $400 million over the five-year period following closing, the document notes.
Risant will make available at least $2 billion as needed through 2028 to “support necessary hospital, ambulatory facility, technology and other strategic and routine capital,” it continues. The $2 billion would include any funds generated internally by Risant or Geisinger.
Additionally, Risant will assure at least $100 million in funding over that time period “to support the expansion of Geisinger’s health plan and care delivery services into contiguous communities in Pennsylvania.” It also will ensure that at least $115 million in annual funding, adjusted for inflation and other factors, is available to support Geisinger’s research and education enterprises for at least a decade following closing.
Those financial commitments are also inclusive of internally generated funds.
Geisinger largely declined to comment, noting in response to several inquiries that it has nothing to add beyond what Kaiser reported in the financial disclosure.
It did note “Geisinger will continue to fund an array of important capital projects and improvements including major investments in its care facilities, health plan, digital technologies, automation and other consumer-focused tools to keep its communities healthy and to accelerate and expand its impact to more communities across Pennsylvania and beyond.”
Local projects planned or underway include a new inpatient behavioral health facility in Moosic, a new state-of-the-art cancer center in Dickson City and the eventual expansion of Geisinger Community Medical Center in Scranton’s Hill Section.
Geisinger President and CEO Dr. Jaewon Ryu, who’ll become Risant’s CEO and transition to that role as the transaction closes, said last month the acquisition won’t hinder those projects.
“I think if anything … it enhances and bolsters, augments, probably accelerates our ability to do those things,” he said at the time.
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