The proposed acquisition of Akron, Ohio-based Summa Health by Health Assurance Transformation Corp., or HATCo, is slated to close by the end of 2024, Ideastream Public Media reported July 18.
Summa Health's President and CEO Cliff Deveny, MD, confirmed that the deal is on track to be finalized by year's end. Reported in January, the acquisition will transition Summa Health from a nonprofit to a for-profit hospital system.
Dr. Deveny acknowledged the community's concerns about the potential negative effects of the acquisition, such as rising costs, staff reductions and cuts in services that primarily benefit low-income populations and people of color. Howevers, Dr. Deveny believes the acquisition is the best way forward for Summa Health, which has been struggling with rising costs.
"After six months of conversations, we made the decision this is probably the best model for us long-term," Dr. Deveny told Ideastream. "The alternatives, we like to refer to it as plan B, is if we don't do something, what are we going to have to stop doing."
Dr. Deveny also noted that the board is not interested in another merger attempt following the failed merger with Michigan-based Beaumont Health in 2020.
"When we see health systems merge with other health systems and they get bigger, the care doesn't necessarily get better, the experience doesn't necessarily get better," Dr. Deveny said, "but one thing that for sure happens is the prices go up."
HATCo, owned by General Catalyst, currently has investments in several healthcare businesses but does not own any outright.
"We would be the first outright business that General Catalyst would actually own," Dr. Deveny said. "The good thing is they're going to be dependent on the 8,500 people in Akron, Ohio, to run it."
This dependency on local management sets HATCo's acquisition of Summa Health apart from previous venture capital acquisitions of nonprofit hospitals, according Ideastream.
"You're not going to make any money on Summa Health System," Dr. Deveny said. "But the way you would make money is developing these technologies, these things that can be applied to other hospitals and health systems in the United States."
Summa Health is currently working to finalize the definitive agreement with HATCo, which will need approval from the Ohio Attorney General and the Ohio Department of Insurance. If approved, the acquisition will proceed as planned.
"They would be buying the buildings, buying the equipment, hiring all 8,500 people," Dr. Deveny said. "The old company would wind down, and it would become a community charity."
According to the report, the specific details of the charity aspect of the acquisition are still being developed. A group of community members not affiliated with the hospital system is working on the plan, which will focus on addressing social determinants of health, such as transportation, housing and internet access.