How Risant Health aims to outshine disruptors

When Kaiser Permanente agreed to acquire Geisinger and form a new value-based care organization, Risant Health, it had competition in mind: for-profit healthcare disruptors.

In recent years, companies such as CVS Health and Optum have been positioning themselves for the potential shift from fee-for-service to value-based care. Their moves include merging with payers and acquiring providers, transitioning toward the "payvider" model that the Oakland, Calif.-based health system pioneered.

Greg Adams, chair and CEO of Kaiser Permanente, told Becker's that competing with disruptors was part of the reason for starting Risant Health.

"As healthcare emerges from the worst effects of the pandemic, we are not seeing sufficient movement toward coming together, but rather, a resumption of the pre-pandemic business trends of consolidation, volume-driven care and a worsening of the fragmentation and gaps in our healthcare system," Mr. Adams said. "While some new players share our vision of integrated value-based care for all, we see other new and disruptive market entrants whose business models seem aimed at serving just the healthiest people, which increases fragmentation and ultimately increases the cost of care for everyone."

Most health systems' primary care networks are made up of different operations models that serve patients of a variety of ages and demographics, said Jolynn Suko, senior vice president and chief innovation officer of Fort Wayne, Ind.-based Parkview Health. Disruptors, meanwhile, often care for a "narrower segment of patients" and have more standardized operating systems.

When Amazon purchased One Medical in February for $3.9 billion, it bought a company that provides concierge primary care for a yearly subscription (on top of billing patients' insurance). The tech giant's new Amazon Clinic telehealth platform is self-pay only. Disruptors often don't accept Medicaid.

"Many organizations, including national for-profit disruptors, focus their value-based care efforts primarily on reimbursement models, or on specific segments of the population where they can achieve higher margins," Mr. Adams said. "This isn't enough."

CVS, after paying nearly $19 billion for Oak Street Health and Signify Health this year, is concentrating its value-based care model on Medicare-insured seniors. Walmart Health, which plans to have more than 75 healthcare centers in 2024, signed a 10-year deal with UnitedHealth Group to treat its Medicare Advantage patients. UnitedHealth subsidiary Optum and Walgreens are also going big on treating seniors — in the home.

Coming effects on the industry

Despite his 39-hospital system inking a deal to buy a 13-hospital group, Mr. Adams said Risant Health's goal is not consolidation but, rather, "supporting nonprofit community health systems." Its name, he said, comes from helping others "rise" while remaining "constant" in its mission and values. That would be done through data-driven population health, addressing social determinants, and aligning financial incentives with quality to drive down costs. He said smaller health systems' move toward value-based care could stall if they "don't have access to the best practices, tools, technology, and systems — all of which Risant Health can bring."

"In the face of exponentially increasing competition in the healthcare landscape, it is critical for healthcare organizations to be trailblazers," said Shari Rajoo, MD, vice president and chief medical officer for population health at Johnson City, Tenn.-based Ballad Health. "At this point, I remain very optimistic about what this could mean for new partnership possibilities for healthcare organizations and am excited to see what Risant Health yields."

Payers are often reluctant to enter into value-based care contracts because so much of what they do is set up for fee-for-service, said Catherine MacLean, MD, PhD, senior vice president and chief value medical officer of New York City-based Hospital for Special Surgery. Kaiser Permanente and Danville, Pa.-based Geisinger might be big enough to change all that. They also have something else the disruptors don't — at least not yet.

"CVS and Optum are focused on ambulatory care and do not own or control any hospitals," Dr. MacLean said. "Given that 40 percent of U.S. healthcare expenditures occur in the hospital, I think Risant will have greater control over total care costs through judicious use of hospitals and by managing hospital efficiencies."

Hospital leaders watching

Other health system executives say they're taking a wait-and-see approach on whether Risant Health is an approach that can be emulated.

"That type of model allows you to have financial and operational alignment with our industry’s mission — which is to take great care of our community and patients by keeping them healthy and well," said Jennifer Stephens, DO, chief value and ambulatory care officer for Allentown, Pa.-based Lehigh Valley Health Network. "However, the key to any of these ventures is to deliver outcomes aligned with that mission in an operationally efficient, patient-centric, and value-add manner. If they can't do that, they won't be successful."

The optimistic view is that Kaiser Permanente "will be able to amalgamate their treasure trove of best-in-class electronic tools into a unified, enterprise-infrastructure platform for population health management," said Jeffrey Guterman, MD, chief research and innovation officer for the Los Angeles County Department of Health Services.

He noted that the health system's EHR, KP HealthConnect, uses Epic as its core. "However, it has significant differences from other implementations of the country's most popular EHR," he said. "That, combined with the other unique structures found at Kaiser, is where the challenge for this development will be."

Dr. Guterman said he hopes the "optimist in me" wins out and Risant Health speeds the "recognition that fee-for-service sick care has little to do with improving the health of a population." "If Risant can serve as the first nationwide platform to begin this journey of data-driven integrated outcomes, we all have a stake in its success," he said.

Mr. Adams acknowledged that many disruptors have been better than health systems at responding to changing consumer expectations "but should not come at the price of further deteriorating our healthcare system."

But that doesn't mean Risant is only competing with healthcare's newer entrants. Mr. Adams said it's also open to collaborating with them.

"Our primary focus is on pushing back against fragmented, disconnected, sick-care-based healthcare in America today, and making the best of Kaiser Permanente available in more communities through new models," he said. "Over time, we will partner with other organizations that share our ambition."

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