Is Healthcare finally coming up with a competitor to United Healthcare?
Today in Health IT Geisinger and Kaiser Permanente coming together under a new organization. We're gonna talk about that today and try to answer the question, where does this go? What does it look like when it's done in the next five years or so? My name is Bill Russell. I'm a former CIO for a 16 hospital system.
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It's not, Hey, Kaiser bought Geisinger. It, it appears that way even from the headline in Becker's. It appears that way, but let me read it to you cuz it's, it's, it's really interesting. Oakland, California based Kaiser Permanente has agreed to acquire Geisinger Health and a deal that will make the Danville, Pennsylvania based health system the first.
To join Risen Health, a new nonprofit organization created by the Kaiser Foundation Hospitals. Okay. Risen Health aims to expand and accelerate the adoption of value-based care in diverse, multi-payer, multi provider, community-based health system environments. According to an April 26th news release from Kaiser Permanente and Geisinger, the deal is subject to regulatory approval.
The transaction is not, , structured as a traditional purchase, but Kaiser Permanente is expected to provide about 5 billion in funding for Rise Health. The Wall Street Journal reported rise in health plans to acquire four or five more health systems. And get a total revenue of 30 billion to 35 billion over the next five years.
Officials told the Journal Health Systems that become a part of Rise Health will continue to operate as regional or community-based health systems. While gaining support through Verizon's value-based platform, according to the release, Geisinger will maintain its name and mission according to the release, as the first system to become a part of Rise Health.
It will be involved in developing the organization's strategy and operational model. Geisinger President and ceo, Jwan Ru. , doctor, , will transition to the role of Rising Health CEO once the transaction closes according to the release. Okay, so this is about value-based care. It's really about, , it's about moving the Kaiser model forward.
And Geisinger is a perfect partner cuz Geisinger's model is very similar. , I think it's also interesting here that you have two organizations that are similar in this regard. They're both payer providers, they're both successful payer providers. Geisinger has a very strong health plan and Geisinger's health plan is the, the misnomer here is people think, oh, Geisinger's Health Plan is just for that community in between Pittsburgh and.
, Harrisburg, , Philadelphia, in between Pittsburgh and Philadelphia. I think it's the best way to say it. , but that's not true. The Geisinger Health Plan reaches beyond those borders, and it goes into Pittsburgh, it goes into Philadelphia, and that's not a place where Geisinger has facilities. And so they operate as a true health plan.
And when I first read this, I thought, this is interesting. This is a first of many moves. For Kaiser to create a competitor to UnitedHealthcare, CVS Aetna. , even Cigna to a certain extent, but really those first two being the, , primaries. , when you look at UnitedHealthcare's model and how they're acquiring all the, the physician practices, it would make sense that someone like a Kaiser would do an acquisition strategy or even a.
A, a new entity like Verizon and move these kinds of organizations in to compete against the United Healthcares of the world and create a, a national, , reach for this. Now, that's not what they're saying in this, but that's how I first read this. I first read this as, this will be interesting if I were going to pick who the next five acquisitions would be, , it, they could have a similar model.
I would look at somebody who's a payer provider. And if for this reason, if you think about it, a payer provider is more, most likely to already have a value-based care model because they make more money when care is efficient, when care is, , designed, , around that value-based care model. Therefore, , if I were to guess who the next five are, I, I'd have to do a little bit of research, but.
, you know, someone like a sharp healthcare sort of pops into my head who, , operates, , you know, a plan or has a lot of covered lives and, , whatnot. Now Kaiser's already down in that market, so that, that would be a lot harder from a regulatory standpoint to see happen. But regardless, those, that's the kind of player I would be thinking about as I sort of looked out at the overall landscape.
, it would never happen, but someone like Intermountain. Would, would make sense if that were the model, and that's the approach. But somebody who's pursuing value-based care because they are also a payer provider is probably where this is going to go. And I think it's also interesting, you're looking at an organization in and of itself, Verizon Health, that'll be 30 to 35 billion over the next five years.
That's a significant entity. And if they're able to drive value-based care in that entity, I think that will be, , also a major push and a major impetus in the rest of the industry to, , to adopt value-based care to, , adopt payer provider type models, which I think is already there. Health systems that aren't adopting a payer provider type model.
, I, I think, are writing their own obituary at this point. I'm not sure what it takes for you to realize that. There's a need to be in this space to compete in the future, , or you're just gonna be acquired. So, , so anyway, that's how I'm, I'm sort of looking at it. I'm looking at the market. Let me tell you how I think about it.
From a technology standpoint, value-based care requires a fair amount of technology. It requires. A lot more touchpoints than we're used to in the traditional fee for service type model and the fee for service type model. It is transactional. It's sort of like, Hey, you need us now? Come on in. We have this really cool digital engagement cuz you're coming in, you're gonna get your knee replaced, this is great.
Boom, boom, boom, you're out. And then away you go. And then we don't talk to you for the next. Two years, , or until the next time you need us. Value-based care, that's not the way it approaches it. It is about a relationship, an ongoing relationship, and therefore you're looking at technologies that are going to keep that relationship going.
Value-based care also requires you to go beyond the 20% that is healthcare. And look at the social determinants and to start to participate in the social determinants to create a healthier community. So there is an ongoing relationship. There's a technology ongoing relationship. That you establish with people.
And this is where, , things like that, digital front door and engagement and, , utilizing the devices in the home to create an ongoing dialogue between the community of patients and the community of people who need care. And the health system becomes so important. And so I, I think the move to value-based care is exciting from a technology standpoint.
I think it, it gives us a, a, another platform to think about. We've seen some of this done by the parish, but to be honest with you, they still haven't gotten it. They still haven't, haven't crushed it in this area. And, , and I, my. , employees have UnitedHealthcare. In fact, I have a UnitedHealthcare bill right here on my desk in front of me.
, and they, they like the experience. It's still not perfect though. I mean, we can imagine a lot of different ways that it can be better. But they like the fact that, you know, they go to the website, they can see their coverage and what's there, what's not. They can engage in a telehealth visit with, I guess a UnitedHealthcare, , primary care physician.
, and so they can get, they can be talking to a clinician very quickly, by the way, and then they can refer you to somewhere else and whatnot. , so the portal is sort of everything they need to get care. It's just. Fairly clunky still. , you know, you, you, as you're going in, you could almost feel it like pulling all these ancient systems, all these legacy systems data together and struggling under the load, but it finally gets it to a point where you can see it.
I, I'm, I'm, I don't know. I don't know how to describe it, but that's what it feels like to me. There's this massive legacy. , set of technologies and it's like somehow, like pulling it all in and trying to make a digital experience because, , that's how I feel. Because as I look at it, I go, man, this, this could be a lot better.
And they're just, they're just not there yet. And I think it's, I think it's the load and the legacy they have to bring, bring along. Anyway. Kaiser Permanente acquiring Geisinger to Launch Rise Health. I think this is going to be exciting. This, I think will fly through the regulatory. , situation pretty quickly.
, I think the question we're gonna be asking over the next month is who are the next couple? I think we're gonna have to wait for that. I think this guy's gonna, one will go all the way through before they start making acquisitions at a later date. Now, I also think there's some health systems that are gonna line up to be acquired that aren't going to be good candidates.
And again, I think it's that payer provider and people who have made. Some progress around value-based care. All right. That's all for today. If you know of someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week, health.com, or wherever you listen to podcasts.
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