It’s been just under a month since Reno, Nev.-based Renown Health and Oakland, Calif.-based Kaiser Permanente inked a joint venture, and Brian Erling, MD, president and CEO of Renown, feels this partnership marks an important step toward expanding access, affordability and choice for patients in northern Nevada.
The partnership, pending regulatory approval, will establish Kaiser Permanente Nevada, as a jointly owned health plan and new outpatient care delivery system. It will also pair Kaiser’s integrated care model with Renown’s existing Hometown Health plan and rebrand it.
“Kaiser has never done anything like this,” Dr. Erling said during a Becker’s Healthcare Podcast episode. “They’ve done a lot of cool things across the country. They have their classic Kaiser model. They have Risant Health on the East Coast. We thought Risant was intriguing, but we were really wanting to maintain our independence as a health system. We were really looking for a partner in the health plan, and, thankfully, Kaiser Permanente was willing to be creative and do something that they had never done before.”
Prior to the pandemic, Hometown Health had around 150,000 members, but now serves around 74,000. While the plan delivers strong clinical outcomes and has earned a four-and-a-half star Medicare Advantage rating, it has financially struggled.
Dr. Erling said without scale, the plan lacked the purchasing power, IT platforms or clinical delivery protocols to be successful.
“We really felt that one of our core tenets of our mission was to assure that we have access to healthcare for our community, that it is affordable and that we really need to maintain a presence in a managed care space,” he said. “Otherwise, all the work you do to control costs in healthcare frankly is just translated to profit for insurance companies.”
Dr. Erling said Renown then pursued a partnership to stabilize and grow its plan, only looking at non-profit health plans or ones that would have interest in helping Hometown Health become a high performer.
Fast forward to now, it’s been about 20 months since Renown decided to partner with Kaiser, a venture that Dr. Erling is very optimistic about.
“Our focus over the next several years will be northern Nevada …[with] the health plan essentially becoming a 50/50, with Kaiser having controlling interest,” he said. “We only transacted one of all of our clinics, but the plan is to grow and open three more clinics over the next three years …Kaiser is known for outstanding outcomes, preventive care, but as Renown continues to grow and Renown Medical Group continues to grow, now we have this new entrance into the market that’s going to continue to grow as well.”
Dr. Erling said one of the lessons learned during the joint venture process was humility.
“Kaiser Permanente’s purchasing power on pharmaceuticals, which is … the No. 1 cost that is driving up the cost of healthcare for the purchasers of healthcare, is something that is just difficult to compete with,” he said. “It took a lot of humility, frankly, for myself and my leadership team to take a step back and go, ‘Do we need help?’ That’s something that can be a challenge. We knew we needed help. The key was just to find a like-minded, mission-oriented partner.”
