Correction:
The purchase amount for Summa Health was corrected to reflect the total purchase price of the deal, based on records from the office of the Ohio Attorney General.
The nonprofit hospital system Summa Health has officially been acquired by a venture-capital-funded, for-profit company.
The $515 million sale to General Catalyst’s Health Assurance Transformation Company, known as HATCo, will mean more artificial intelligence and other technology will be used at Summa, as General Catalyst plans to use the hospital as a “test kitchen” for the more than 100 healthcare companies it’s invested in.
It means the end of Summa’s $850 million in debt, the end of a foundation that supported Summa and the beginning of the Trailhead Community Health Foundation. That foundation will be funded with an additional $15 million on top of the purchase price and with leftover proceeds from the sale after Summa’s debt has been retired — a total figure that is not yet known.
And it also means employees who were eligible for federal loan repayment programs because they worked for a nonprofit organization are no longer eligible. That the hospital system will start paying taxes. And that, soon, patients will begin to have greater access to schedule their own appointments and receive care more quickly.
Next months will help stabilize Summa, determine what’s next
The setup is unique to Akron, and what the roll-out will look like remains to be seen. Chief Operating Officer Ben Sutton said in an interview that he expects the next 12 to 18 months to be about stabilizing Summa in order to determine what the hospital system looks like in the future.
He has a list of 300 initiatives that should be core to Summa’s work over the next few years. Those include efforts to help patients access appointments faster and ensure healthcare providers have more capacity.
Already, he said, an ambient listening program has been rolled out to primary care physicians that’s intended to save them an average of 45 minutes each day.
“They’re saving capacity for patients who need it,” Sutton said.
It’s already been well received by doctors, he said.
Sutton said the health system isn’t yet at the point where they’ll be looking to implement other products. But he said everyone is “incredibly excited to get started.”
The sale, he said, is an opportunity to be part of something unique that has an impact on health care. It will give Summa access to capabilities no one else has access to and put the hospital system in an advantageous position to improve equitable distribution of care in the region.
“We’ll really be at the forefront of everything we’re doing,” Sutton said.
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A new chapter for Summa Health
In a statement, Summa Health President and CEO Cliff Deveny said the deal marks the start of a new chapter for Summa Health.
“With HATCo, we can preserve our community roots, invest in our team, and take bold steps to modernize and expand access to ensure Summa remains strong for decades to come,” he said.
The announcement of the closing said the deal would provide “a more proactive, accessible and affordable system of community-based, lifelong healthcare” in the area. It added that the purchase “will ensure the sustainability of the system while also enabling strategic, transformative initiatives and innovation.”
HATCo has agreed to invest at least $350 million in capital expenditures within the first five years after the deal closes and at least $200 million more within the first seven years following closing.
“This investment will ensure Summa Health remains a strong, resilient pillar of the community that endures to serve for generations,” Daryl Tol, HATCo president, said in a statement.
He added that that would mean more consistent, reliable care for patients and new technology and resources for employees.
The deal also required guardrails to ensure Summa continues to operate in the community. Those include giving the Trailhead foundation a stake in Summa that it cannot sell for three years and requirements that HATCO maintain the health system’s headquarters in Akron as well as maintain the employment and benefits of all employees for at least a year.
And the agreement prevents HATCo from selling facilities to lease them back to the hospital or from otherwise getting rid of “key facilities.” It also requires Summa to continue to serve Medicare and Medicaid patients. And it puts three community members on the hospital system’s board, then requires a supermajority of the board to change some policies — notably, Summa’s current charity care policy, which will continue; the continuation of trauma, behavioral health, obstetrics and emergency services; and the current level of support for graduate medical students and clinical research programs.
HATCo has agreed that it won’t cease to operate any hospital or any other major portion of the business for a decade without the prior written consent of the foundation. It also won’t change control of the hospital without the foundation’s approval for that same 10-year period. And any future owner of the hospital must agree to keep the headquarters in Akron as well as to continue the hospital’s charity care policies, essential services, and commitment to education and training.
“While the structure and model of Summa Health are changing, our priorities are not,” George Strickler, the immediate past chair of Summa Health’s board of directors, said in a statement. “We remain deeply committed to the communities we serve and will maintain our charity care policy, community benefit and essential services while pursuing sustainable growth and expanded access to care across the region.”
Critic plans to ‘keep a close eye’ on nonprofit hospital
The deal has its detractors. Jeff Barge, a member of the group Summa Is Not For Sale, which opposed the acquisition, said in an email he was concerned that the hospital would try to raise profits by denying care.
“That’s a particular danger when a hospital owns its own insurer as with Summa,” he said. “We need to keep a close eye to make sure that does not happen in Akron.”
Barge also said he wanted Summa to “quit stalling” about how well the Trailhead foundation will be funded, saying the system had been secretive to this point. Sutton said it would likely be months before the funding total is known.
At a public meeting this summer, more than two dozen nonprofits lined up to ask the foundation to consider their causes, though its first grants are likely more than a year away.
What’s next at Summa in Akron
For now, the companies are working to stabilize Summa, the statement said, including making investments that support staff and ensure patient care. Summa has more than 8,500 employees across the system and at SummaCare.
Sutton said people shouldn’t expect to see anything change at first. But early efforts will include work to remove barriers to access and make patient access more efficient. He said that would include giving patients access to schedule their own appointments instead of calling a scheduler.
Still, he said, he expects technology to help people have the experience they want, freeing up capacity for those who want to talk to humans.
“I don’t envision a future where there aren’t options,” he said. “We’ll leverage technology smartly, when we can.”
Kate Walsh, the new chair of the Summa Board of Directors, said in a statement that she intended to ensure Summa’s continued offering of high-quality, accessible care.
The result, General Catalyst CEO Hemant Taneja said in the statement, would be “a more resilient, affordable and proactive healthcare system that empowers people to live their healthiest lives.”
“We are making a generational investment in community health infrastructure,” Taneja said. “Our partnership with Summa in Akron will serve as a blueprint for the healthcare industry.”