Experts on Geisinger acquisition: Great potential, big questions [The Times Leader, Wilkes-Barre, Pa.]

Apr. 30—The acquisition of Geisinger Health by a spin off of industry giant Kaiser Permanente may be one of the best things to happen in health care locally and nationally.

Or it may be a subtle grab at market share.

Or a preemptive defense against other large companies squeezing out Geisinger.

And by the way, what does "value-based" health care really mean?

Two local experts weighed in shortly after the announcement Wednesday: Justin Matus, Associate Professor at Wilkes University's Sidhu School of Business & Leadership, and John Ash, Misericordia University assistant professor in business and healthcare administration program director. Both have additional experiences on the topic outside of higher education.

Regarding "value-based," both agreed the initial media release about the acquisition failed to adequately define it, but also noted the idea has been around a while.

"It's nothing new," Matus said. "In plain English, it's not really about getting the most bang for your buck, it's about being parsimonious with our health care spending. And that's a good thing."

"I've been in health care for 43 years and have a strong background in emergency medicine," Ash said. "Value-based is something we've talked about for years." Ash pointed out that Geisinger President and CEO Dr. Jaewon Ryu "was not wrong" when, during a Zoom media conference, he said value-based health care "benefits the patient."

"It incentivizes prevention."

Both pointed to the older term "Health Maintenance Organization," and how "HMO" got a bad reputation as a system that restricted patients to a narrower network of providers to save money. But the basic idea is sound: Find ways to reduce costs while providing quality care. Increasingly that has meant including preventive care and home services.

Measuring the value of care

The problem with "value-based health care," Ash said, is measuring the "value."

If you go to Disney World for a vacation and have a great time, it's easy to decide if you got your money's worth. "But when we look at health care, other than having a child, no one wants to use health care unless they absolutely have to. So quality and value are very elusive."

This is one place the creation of non-profit Risant by Kaiser, with Geisinger as the first health system to join, shows a lot of promise, he added. Both organizations have shown a desire to approach health care with a stronger emphasis on prevention, home health services and community-based options, trying to take care of problems while they are avoidable or easily managed, rather than waiting until a person lands in an emergency room.

"I'm hopeful the Geisinger-Kaiser initiative will help create a footprint, a trail on how we handle health care," Ash said. "Right now no one is making health care accountable, and that's a tragedy for the consumer, and the taxpayer through Medicare."

"Geisinger and Kaiser are trying to treat people at home," he added, noting such treatment, especially for chronic illnesses such as diabetes, has been proven to sharply reduce emergency room use — by as much as 80% — thus reducing overall costs while shortening ER wait times for those who are in need of immediate attention. Home care also reduces a lot of traveling to and from hospitals, clinics, pharmacies and doctor's offices.

The role of 'Big Data'

Kaiser and Geisinger share other approaches to health care that are becoming big parts of the industry. Both men noted the industry increasingly turns to "Big Data" — the collection and detailed analysis of lots of patient information to find better, less expensive ways to keep people healthy and prevent serious conditions from developing.

"It's about investing in innovation," Matus said. "Not just equipment, but also big data, data analysis and all the tech to support that. And I don't want that to come across as a criticism. It's going to be a big investment (by Kaiser/Risant) into Geisinger, and that's certainly a good thing."

Similarly, a company of Kaiser's size can accelerate Geisinger's growing use of Artificial Intelligence to better get critical help to patients most in need — during the media conference, Ryu cited Geisinger's use of AI to take a first look at brain scans, spotting things like clots or strokes and directing those scans to doctor review first.

Unknowns remain

Yet while the potential for a lot of positive developments is there, both men said there are a lot of unknowns. For starters, Matus said. "It's an interesting marriage, but I haven't heard what's in it for Kaiser Permanente."

With some 12.6 million members and more than 305,000 employees, Kaiser's insurance business is ranked the largest in the country. Geisinger, by comparison, serves some 3 million customers and has about 25,000 employees.

Locally, the Geisinger Wyoming Valley campus employs more than 2,700 people, while all of Geisinger's Luzerne County locations employ more than 4,600, officials said.

It's possible, Matus said, that Risant and the acquisition of Geisinger is not only Kaiser's effort to find new ways to improve health care, but is also providing a foothold in the region's insurance market. The move could also be a way for Geisinger and Kaiser to preempt other large companies from moving into the area and swallowing up Geisinger. Or, Ash said, it could be a way for either company to position themselves to acquire the main competing hospitals in Lackawanna and Luzerne Counties, currently run by for-profit Commonwealth Health in the region, though he didn't think that likely.

Even if Kaiser and Geisinger are making the move with the best interest of consumers at heart, there's no guarantee things will go as planned. "The devil is in the details," Matus said. "There are plenty of examples of mergers and acquisitions that didn't go as planned."

Still, with the growing need for economies of scale in health care to produce greater innovations, and the need for a clear and effective way to measure quality outcomes so providers who produce them are rewarded and those who consistently have poor outcomes are left behind, this move looks like a smart one, both agreed.

"I truly believe this is for the public betterment," Ash said. "In a country where we spend nearly 18% of GDP (Gross Domestic Product) on health care, we have to do something, and this is a nice start."

Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish

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