UPDATE: May 29, 2020: Beaumont Health and Summa Health have officially nixed plans to merge the two organizations, according to a joint statement released Friday. The two did not provide any greater details about the breakup, though they had previously put the deal on pause as they and health systems around the country battled the outbreak of the novel coronavirus.
- Michigan's largest health system, Beaumont Health, is delaying its merger with Ohio-based Summa Health as the two continue to battle the coronavirus pandemic. "We didn't plan this, but we are deferring that [the merger] until we have a little more clarity about the impact of this crisis," Beaumont Health CEO John Fox said Wednesday.
- Beaumont said it is temporarily laying off more than 2,400 employees, or nearly 7% of its workforce, as the pandemic has forced the system to halt inpatient and outpatient surgeries, cutting off an entire revenue stream. Among the job cuts, 450 positions have been permanently eliminated, while most of the other 2,400-plus positions involved administrative staff and others who are not directly caring for patients. Administrators have also said they're taking pay cuts and Fox's pay has been reduced by 70%.
- The deal was recently approved by state and federal regulatory agencies, Summa Health told Healthcare Dive.
The deal is still on the table and the two are working on finalizing a path forward, Summa Health told Healthcare Dive.
"That said, the immediate priority is for both Summa and Beaumont to focus first and foremost on caring for our patients, employees, physicians and communities as we are impacted by the COVID-19 pandemic," a spokesperson said.
The marriage between the two health systems is supposed to give Beaumont Health a foothold in Northeast Ohio, putting it in closer competition with Cleveland Clinic. In addition to its four hospitals, Summa also operates its own health plan, SummaCare, which provides coverage to 46,000 people.
Beaumont operates eight hospitals with 145 outpatient sites and has 38,000 employees.
Earlier this year, the two signed a definitive agreement and, together, Beaumont and Summa, are expected to create a $6.1 billion system in terms of total annual revenue with $4.7 billion from Beaumont and $1.4 billion from Summa.
However, the fallout from COVID-19 is likely to hamper those figures.
Beaumont reported a net loss of about $278 million during the first quarter of 2020, compared to about $408 million during the prior-year period. The system reported the virus only started affecting it in the last two weeks of March.