Cone Health CEO says merger partner Risant aligns with the medical system's values

For the second time in three years, Greensboro-based Cone Health is planning to become part of another health system — but Cone President and CEO Dr. Mary Jo Cagle says this time will be different. 

The current deal is for Cone Health to become part of Risant Health, an offshoot of Kaiser Permanente. A planned merger with Sentara Health ended by mutual agreement in 2021. Cagle says trying to complete the deal during the pandemic was difficult, as many of the negotiations were handled virtually.

Since that time, she says other companies have approached Cone about merging, but one of the things learned in the Sentara deal was the importance of finding a good fit.

“It really had clarified if we were to ever do that again what would be the reasons for doing it?'" she says. "We'd have to have clear alignment of mission, vision and values. And we learned that unless you have great alignment on those three things, it's hard to move forward.”

The deal is going through both a federal and state regulatory process. Some state leaders — notably Treasurer Dale Folwell and Attorney General and gubernatorial candidate Josh Stein — have raised questions about health care mergers and their potential to lead to price increases. 

Cagle says she’s confident that the Risant acquisition will be helped by its focus on lowering costs for patients.

"When they review the documents, they'll see that," she says. "And I think that, in and of itself, sets it apart from other health care mergers that have happened," 

Cagle says If things go as planned, the deal for Risant to acquire Cone will likely close early next year.

Interview Highlights:

On her belief that the deal will lower prices:

"I think that's how (the Risant deal) really is different than others. What we really have believed in and been working on for the past 13 years, before Risant was even in the picture, was this whole idea of you can deliver high quality at a better price. And if you do it in what's been called the 'value-based care model,' it's not paying for every single encounter, but that we become your partner, and we go at risk for your care with you."

On why doing the deal is important for Cone:

"The nurses that you see will remain the same. The name on the buildings stay Cone Health. You'll go to the same places to see your doctors. So in that regard, it will feel like it's Cone Health ... So I'll just share a personal story. My father, my grandfather, my family were a family of brick masons, and so they were self-employed. If you weren't working, you weren't making money, and they had to pay for their own insurance if they had insurance. My grandfather never saw a doctor because he didn't feel like he could afford to. The first time he ever saw a doctor was when he had a heart attack on the job the second time he saw a doctor was his second heart attack from which he died in the doctor's office. So here's the sad news: There are still people like that in Greensboro, in Reidsville and Burlington. And you know what? We can do better than that."

On how Risant's capital can help Cone's mission:

"We're very, I'll say frugal, in that we manage our capital with a five-year plan. And while we're a strong $3 billion company, the amount of capital that we can spin off is not negligible, but this will empower us to move faster. It will allow us to take our five-year capital plan and our five-year strategy and accelerate some of the plans we had."