Kaiser Permanente’s acquisition of Geisinger Health has the potential to create a quicker path to value-based care and lead to significant shared learning. The deal may positively impact patients and help ensure that patients who are in the hospital are those who should be there. Hospital mergers and acquisitions have had mixed effects on patient care, but the acquisition of Geisinger by Kaiser Permanente poses little risk of hurting competition. Proposed acquisitions always have the potential to change or lead to unforeseen impacts on healthcare stakeholders.
Kaiser Permanente’s acquisition of Geisinger Health has the potential to open new opportunities in value-based care. The deal may create a quicker path to value-based care and lead to significant shared learning. The acquisition would be the first for Kaiser’s new nonprofit organization, Risant Health, which aims to expand value-based care through health system acquisitions. Geisinger would be the first health system to join Risant Health. While large health system transactions have raised concerns in the past, this deal may not face the same hurdles.
Linda Finkel, CEO of AVIA, a two-sided healthcare innovation network, believes that the fact that both organizations are committed to fee-for-value care rather than fee-for-service care will help ensure that they do not face regulatory barriers. According to Finkel, the creation of Risant Health creates a platform that has potential for other systems looking to move towards value-based care. Finkel believes that regulators will see this as an opportunity to jumpstart the move toward value-based care.
Kaiser Permanente and Geisinger operate in different geographies with different care models but are united in their mission to further value-based care. Through their different backgrounds, the two organizations will benefit from shared learning. Finkel believes that Geisinger’s focus on remote patient monitoring and addressing patients’ social determinants of health, specifically food insecurity, would be areas they could share with Kaiser. Similarly, Geisinger could benefit from Kaiser’s experience.
Although the two organizations seem to have good intentions for the deal, proposed acquisitions always have the potential to change or lead to unforeseen impacts on healthcare stakeholders. The acquisition awaits federal and state review before it can be finalized. The deal may positively impact patients and help ensure that patients who are in the hospital are those who should be in the hospital.
Hospital mergers and acquisitions have had mixed effects on patient care. Harvard Medical School data found that hospital acquisitions were associated with decreased performance on the patient experience measure of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey and no changes in 30-day readmission or 30-day mortality rates. On the other hand, patient outcomes improved at rural hospitals that underwent mergers, one study found.
The American Hospital Association (AHA) has asserted that mergers and acquisitions lower hospital costs. However, transactions that reduce market competition could lead to increased healthcare prices. Being on opposite sides of the country, the acquisition of Geisinger by Kaiser Permanente poses little risk of hurting competition. In an industry where fee-for-service is still the dominant care model, larger health systems can take on more financial risk and may be better suited to lead the way to value-based care.
The difficulties that Kaiser and Geisinger would encounter are the same difficulties that any two organizations with distinct histories and histories of success would have when they joined together. The complexity of the merger is one that Finkel believes can be overcome. Finkel believes that the deal between Kaiser and Geisinger will positively impact patients, and the focus of both will be to ensure that patients who are in the hospital are those who should be in the hospital.