Dive Brief:
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Akron, Ohio-based Summa Health said last week it is actively seeking partnerships or mergers with other health systems to ensure its "stability and growth."
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The health system has identified 30 to 40 potential partners and expects the process to take 18 months, according to news reports.
- Summa, which calls itself "a patient-centered population health management organization," could go one of multiple avenues. Cleveland.com reported Summa has identified potential partners, including regional and national organizations. Possibilities include Cleveland-based systems like University Hospitals and Cleveland Clinic and systems outside of Ohio like UPMC, which has been expanding in neighboring Pennsylvania.
Dive Insight:
Summa's approach is not new. Many hospitals have considered or are considering similar consolidation. M&A activity is happening all throughout healthcare, including vertical and horizontal integration. One aspect that sets this one apart from others, though, is that Summa's move doesn't appear to be out of desperation. Instead, it’s a view to the future and how to thrive in a shifting healthcare business environment.
Summa's announcement comes weeks after the company reported a $43 million financial turnaround in the first half of 2018 following a $33 million operating loss in the same period last year, according to its quarterly financial report.
The turnabout resulted from a system-wide effort to lower costs and improve access. That work included expanded hours and moving to a new headquarters, Cliff Deveny, who has served as interim CEO since last year, said.
During a tough 2017, Summa cut about 300 mostly administrative positions, eliminated services, consolidated units and reviewed capital needs. Since the layoffs, the system has hired about 1,000 people, mainly on the clinical side.
Now, a year after those difficulties, Deveny and Anthony Lockhart, chair of Summa's board of directors, wrote in a published letter that the system found the current state of healthcare requires it to look for other opportunities. That includes partnering with another health system. Summa has started initial steps in the process.
"Summa Health is in strong standing and we are financially stable; we do not need to establish a new partnership to remain operational and viable. However, it is our responsibility and obligation to continue seeking opportunities to position Summa Health for future success," the executives wrote.
The deal comes after a minority partner is merging with another system, according to Cleveland.com. Cincinnati-based Mercy Health has a 30 percent stake in Summa and holds five of the 16 board seats, Cleveland.com reports. Mercy has recently finalized its merger with Maryland-based Bon Secours, creating one of the largest health systems in the country. Mercy said it was willing to exit its deal with Summa should it find a partner.
The board and leadership will spend the coming months deciding the best avenue forward. That work includes three advisory councils with physicians, employees and community leaders, according to the company.