- Michigan-based Beaumont Health and Ohio-based Summa Health have signed a letter of intent to begin the process of Summa becoming a wholly owned subsidiary of Beaumont, the nonprofit organizations said Tuesday.
- Summa first announced it was seeking a partnership or merger in September. In a statement Tuesday, the company's board chairman said Summa "looked at many potential partners and believe Beaumont Health is the best fit."
- A Beaumont spokesman said the organizations will buy out Mercy Health's minority stake in Summa, but exact terms of the deal are not being disclosed. It is expected to be finalized by the end of this year.
Summa executives said last year they were not seeking a merger for financial stability reasons, but because they saw it as their "responsibility and obligation to continue seeking opportunities to position Summa Health for future success."
The organization reported a more than $40 million turnaround in the first half of 2018 after a series of losses the year prior that led to cuts and consolidations. Summa will maintain local control if the merger is completed.
The relatively small, regional merger isn't expected to raise any red flags with antitrust regulators, but states are paying more attention to deals that could corner markets. Some larger horizontal provider deals, such as the formation of Ballard Health and the merger between Beth Israel Deaconess Medical Center and Lahey Health, have been approved only with conditions imposed by states.
The merger would give Beaumont its first foothold in Ohio, where it will have to compete with Cleveland Clinic. The behemoth nonprofit has more than a dozen hospitals in the state. It will also face former minority stake owner Mercy, which recently merged with Maryland-based Bon Secours to create the fifth-largest Catholic health system in the country.
Beaumont is Michigan's largest healthcare system, with eight hospitals, 145 outpatient sites and about 38,000 employees. It reported operating revenue of $1.15 billion in the first quarter of this year, up slightly from the first quarter of 2018.
Beaumont Health was formed in 2014 with the merger of Beaumont Health System, Botsford Hospital and Oakwood Health System. At the beginning of the year, the organization announced a joint venture to expand home health and hospice service in Michigan and the system is planning to build 30 urgent care centers in the area this year.
Summa is an integrated health system with four hospitals and a health plan, SummaCare, which provides coverage for 46,000 people. Cincinatti-based Mercy Health has had a 30% stake in Summa since 2014.