What You Should Know:
– Health Assurance Transformation LLC (HATCo), a General Catalyst company has reached an agreement to acquire Summa Health, an Ohio-based health system for $485M.
– The $485M acquisition combined with Summa Health’s current cash reserves, will enable the health system to eliminate $850 million in existing debt. Furthermore, the remaining funds will establish a new community foundation dedicated to improving community health in the Greater Akron area.
Financial Stability and Community Investment
The acquisition represents a significant investment in Summa Health and a commitment to creating a more proactive, affordable, and equitable healthcare system. The agreement outlines a purchase price of $485M, for which, HATCo has also pledged substantial capital investments:
- $350M within the first five years: This funding will support essential operations and investments in technology to drive growth.
- $200M over the first seven years: This investment will focus on strategic initiatives, transformative projects, and fostering innovation.
Commitment to Community and Workforce
Despite the transition to a for-profit structure, Summa Health will maintain its commitment to community benefit programs, charity care policies, and essential services. The focus remains on sustainable growth and enhancing access to care for the entire region. As part of the acquisition, Summa Health’s employees, providers, and leadership team will transition to the new entity. Maintaining and growing the workforce is a key priority for both organizations.
Stabilization and Transformation Plan
Summa Health and HATCo are collaborating on a comprehensive plan with two key phases:
- Stabilization: This phase will involve transitioning to a for-profit structure, optimizing processes and best practices, and enhancing the experiences of patients, providers, and staff.
- Transformation: Working groups with representation across Summa Health will identify and develop opportunities for long-term transformation, including investments in technology and innovative care models.
Regulatory Approvals
The proposed transaction is subject to regulatory review and approval from various bodies, including the Ohio Attorney General, the Ohio Department of Insurance, the Federal Trade Commission, and other relevant authorities.
“Our respective leaders and teams worked together through a thoughtful, thorough due diligence process to define the terms of this agreement, which further cemented our trust and confidence in HATCo’s commitment to Summa Health, our culture, and the Greater Akron region,” said George Strickler, Chair of Summa Health’s Board of Directors. “This opportunity with HATCo puts us in a stronger position to navigate headwinds, transform the health system and create a sustainable path forward to better serve our people, our patients and our communities.”
