AKRON, Ohio — Summa Health announced Wednesday that it had signed a letter of intent to be acquired by the company HATCO (Health Assurance Transformation Corporation), which the venture capital firm General Catalyst owns.
"We believe that HATCo shares our vision to drive Summa Health’s growth and success. HATCo’s immediate investment into Summa Health will drive not only near-term benefit to the organization and all those Summa Health serves but also sustainable, long-term transformation," Summa Health said.
According to Summa Health, it will continue to provide patients already within its system, as well as focus on "continued growth and enhanced access to care." After the acquisition goes through, patients will still have access to the care providers they are already seeing.
The healthcare system said current services, such as oncology, cardiology, emergency services and other things patients are used to will remain intact. Summa will still be based out of the Akron area.
Additionally, the Summa name and logo will not change.
The deal is part of a larger trend of hospital systems merging or being sold to larger companies so they can remain competitive in a changing healthcare landscape. Summa said its acquisition will help preserve its position in the community.
“We’ve been looking for a way to really transform this organization and continue to improve the affordability, the access to care and the patient experience,” said Summa President and CEO Dr. Cliff Deveny.
Some Summa patients told News 5 that the prospect of a transition from nonprofit to for-profit makes them nervous about affordability.
“The for-profit worries me because it makes me think it’s going to make all the insurance companies change their minds about what they’re paying, who they’re going to,” said Virginia Barnes, who lives near the hospital in Akron and has been using its care for decades.
Summa and HATCo leaders told News 5 that won't be the case.
"We've always been a steward of the dollars," Devey said. "We've been shrinking our expensive hospital footprint for years and expanding our ambulatory footprint or post-acute footprint. So we continue to be focused on that and making it even more affordable."
HATCo plans to use a unique model to streamline care and improve patient outcomes.
“At HATCo we actually seek to function at the intersection of technology and face-to-face care,” said HATCo CEO Dr. Marc Harrison.
The details of the deal have not been released, but Summa plans to use the proceeds of the sale to create a foundation. It would focus on addressing social determinants of health, such as housing, transportation and food insecurity.
“Can you get better value with the same cost or lower by doing things differently? Mainly by technology, things of that nature, so that’s the gamble here,” said JB Silvers, a professor of healthcare finance at the CWRU Weatherhead School of Management.
Silvers explained the deal differs from a venture capital investment because it's focused on long-term results. Its value-based payment model will reward the hospital system based on the quality of care and other goals.
“Healthcare is a human business. It’s about people taking care of other human beings,” Harrison said.
Silvers said both Deveny and Harrison, who practiced medicine themselves, have a reputation for innovation within the healthcare field. He anticipates the transition at Summa could serve as a model for other hospital systems.
“You’ve got to bet on the people. And if I had to pick anybody in that for-profit sector that I would bet on, he’d be the one,” he said of Harrison.
Summa and HATCo will need to go through a number of regulatory steps before the sale is complete. They anticipate finalizing the deal by summer.
Summa plans to hold a number of town hall meetings for employees and has included an FAQ pageon its website.
Akron mayor Shammas Malik released the following statement Wednesday in response to the acquisition:
“The City of Akron’s partnership with Summa will remain strong. My family, like much of our community, has depended on Summa for healthcare in difficult moments. My hope and belief is today’s announcement will ensure Akron families can continue to rely on Summa for excellent care for decades to come.
Change has been a constant in healthcare across the country and here at home. 35 years ago, Akron City Hospital and St. Thomas Hospital merged to form Summa, and now the system is looking to transform again. As a community, we will face these new changes head on, prioritizing patient health, community wellbeing, and support for Summa’s amazing employees.
I want to thank Dr. Cliff Deveny, his leadership team, and every Summa employee for their service to the community, as well as the Summa Board. We look forward to working with the Health Assurance Transformation Corporation (HATCo) on the future of healthcare in Akron.”
One change, however, would be the transition of Summa's current nonprofit status to that of a for-profit hospital system.
“This alliance provides Summa Health with comprehensive opportunities to grow our organization in ways we can’t achieve alone. Many other health systems are navigating the very same challenges we must transcend,” said George Strickler, chair of Summa Health’s board of directors. “We are excited about this opportunity to work hand-in-hand with HATCo to increase investment in Summa Health and our communities and drive meaningful, transformative change that will benefit the entire healthcare industry.”
The details surrounding the cost of the deal haven't been released.
More information about the future of Summa Health can be found by clicking the links below:
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