Dive Transient:
- Ohio’s legal professional common has conditionally authorized enterprise capital agency Common Catalyst’s acquisition of Summa Well being, in accordance with a press launch Wednesday.
- Common Catalyst’s Well being Assurance Transformation subsidiary, or HATCo, and the Akron, Ohio-based well being system should meet 10 situations to permit the deal to maneuver ahead, together with rising the acquisition value by $15 million in money and an extra $15 million in fairness to the surviving nonprofit basis, in accordance with a letter despatched by Lawyer Common Dave Yost’s workplace. The fairness curiosity can’t be bought for 3 years.
- HATCo may also need to file a yearly report with the legal professional common to point out it’s complying with post-closing obligations, in addition to present discover of latest offers that would set off antitrust issues.
Dive Perception:
Common Catalyst, a big enterprise capital agency that’s invested in plenty of healthcare corporations, stated it needed to purchase a well being system in 2023 to function a testing floor for expertise that would enhance hospital operations or affected person care.
Early final yr, the agency named Summa, one of many largest built-in programs in Ohio with greater than 870 inpatient beds and 1000’s of staff, as its acquisition goal.
Months later, HATCo introduced it had signed a definitive settlement to purchase the well being system for $485 million, and pledged to take a position a whole lot of thousands and thousands of {dollars} in Summa within the years following the deal’s shut.
The acquisition would transition Summa to a for-profit operation, and the funds used to buy the well being system would go towards paying off its debt. Remaining funds can be managed by a charitable basis that might work independently from the for-profit operation, in accordance with the letter despatched by the Ohio legal professional common’s workplace Wednesday.
Moreover, HATCo agreed that three members of the brand new, for-profit system board will likely be local people members, and one member would sit on the HATCo dad or mum board.
It additionally stated it will preserve Summa’s charity care insurance policies, important providers like behavioral well being and obstetrics, and its medical training and medical analysis applications. These insurance policies couldn’t be modified and not using a supermajority approval of the board, in accordance with the letter.
The Ohio legal professional common additionally set new situations for the deal. For instance, HATCo should agree that the legal professional common has jurisdiction to supervise that the agency completes its obligations set out within the buy settlement, in addition to to cooperate with any future investigations.
Moreover, most board members of the charitable basis should have no affiliation with Summa, and so they have to finish the legal professional common’s charitable college coaching.
“We’re assured that the settlement consists of enforceable commitments that may safe Summa’s nonprofit mission, defend affected person care, and guarantee continued funding within the higher Akron group,” Yost stated in an announcement. “With correct safeguards in place, this has the potential to strengthen well being care in northeastern Ohio for years to come back.”
The conditional approval from the legal professional common is a “vital milestone,” Michael Bernstein, system director for company communications at Summa stated in an announcement. The deal was additionally greenlit by the Ohio Division of Insurance coverage on June 2, a Summa spokesperson informed Healthcare Dive.
The acquisition has confronted some pushback from a coalition of group teams referred to as Summa Is Not for Sale, who argue personal possession might worsen care and improve prices. Nonetheless, coalition member Jeff Barge stated in an announcement to Healthcare Dive the situations set by the Ohio legal professional common made “plenty of modern adjustments” to the acquisition. Nonetheless, the group thinks Summa is being bought for about half its market worth.
