Summa Health would become wholly-owned subsidiary of Beaumont Health
Southfield, Michigan-based Beaumont Health and Akron, Ohio-based Summa Health have signed a Letter of Intent to develop a strategic partnership. The arrangement would strengthen both organizations’ cost-effective approaches to partnering with communities in new ways to improve quality of care and overall health. Juniper is advising Beaumont on this transaction.
The Letter of Intent signals the beginning of the process to draft definitive agreements to bring the two not-for-profit health systems together under Beaumont Health. The arrangement would allow for continued growth and expansion to serve patients better in Michigan and Ohio. Summa Health would maintain local leadership, including a local board.
“Beaumont Health and Summa Health are already strong and successful health care leaders. By welcoming Summa into the Beaumont family, both organizations will share expertise, invest in each other and continue to thrive as the industry evolves,” Beaumont Health CEO John Fox said. “As we expand into Ohio, we will continue to invest in our Michigan employees and operations. This year, we will launch 30 new urgent care centers. Plans to build a new mental health hospital in Dearborn and three new outpatient campuses in Livonia, Lenox Township and Royal Oak are moving forward as well.”
Summa Health CEO Dr. Cliff Deveny said, “Our board believes Beaumont Health would position our leadership, physicians and employees for continued success and enhance the quality of care provided to our patients in Akron and Northeast Ohio. Before making this decision, we announced we were seeking a partner in September 2018 and received responses from multiple health care systems in Michigan as well as several in Ohio and other states. Beaumont understands and supports our commitment to the communities we serve and will invest in our future growth in Ohio.”
Highlights of the agreement:
- Beaumont Health has been strategically focused on regional expansion since its formation in 2014. The combined strength of Summa and Beaumont would allow both organizations to continue to invest in local health care and expand programs and services.
- SummaCare, Summa’s insurance product, would be able to expand into new markets in Ohio. Summa’s capabilities and expertise in risk-based health insurance contracts and services could benefit Michigan employers.
- By working together from positions of strength, both organizations could maximize opportunities to deliver health care more efficiently and effectively.
- The agreement would build upon the commitment of both organizations to medical education and create more opportunities for medical students to train and work.
Summa Health is one of the largest integrated health care delivery systems in Ohio with total annual revenues of $1.4 billion and employs approximately 7,000 people. The not-for-profit organization includes a network of four hospitals with a total of 1,300 licensed inpatient beds, community health centers, SummaCare, a physician-hospital organization and a multi-specialty physician organization.
“Summa Health initiated a partnership exploration process to ensure we continue to thrive and grow in a changing health care environment. We looked at many potential partners and believe Beaumont Health is the best fit because of this organization’s support for our strong cultural values and alignment with our mission to provide compassionate, quality care,” Summa Health Board Chair Anthony Lockhart said.
Beaumont Health is Michigan’s largest health care system with $4.7 billion in total annual net patient revenue and is most preferred for health care in Southeast Michigan, according to NRC Health survey data. The not-for-profit organization consists of eight hospitals with 3,429 beds, 145 outpatient sites, nearly 5,000 affiliated physicians and 38,000 employees.
“Since the formation of Beaumont Health, we have invested significantly in our Michigan employees, facilities and communities. We will continue to do so. One of our strategic goals is to become a regional health care leader. The planned addition of Summa Health allows us to take one step closer to achieving this key strategic priority,” Beaumont Health Board Chair John Lewis said.
After due diligence and approval from regulatory agencies, the two organizations plan to finalize the partnership by the end of the year.