Beaumont Health to join with Ohio's Summa Health system

Michigan's largest health care system is about to get bigger.

Beaumont Health announced Tuesday that it has signed a letter of intent to partner with Summa Health, an Akron, Ohio-based nonprofit hospital system that employs 7,000 people at four hospitals and community health centers in northeastern Ohio. 

Under the deal, Summa Health would become a subsidiary of Beaumont and would maintain local leadership and a local board.

Cincinnati-based Bon Secours Mercy Health, which has a 30% minority stake in Summa Health, Crain's Cleveland Business has reported, would be "redeemed as part of this process from the combined entity and the five board seats on the Summa Health board will be replaced by Beaumont health appointees," said Summa Health CEO Dr. Cliff Deveny.  

Summa Health began looking for a partner in October, putting out a call to other health systems to form a partnership to help provide financial stability and help it grow, Deveny said. 

"We had to find an organization that valued what Summa Health System is and our mission and how we could really not only sustain the organization but grow the organization,"' he said. "... Beaumont is very similar in so many ways, not only when it comes to the DNA and how people think, but how we are focused on the value of care and to make sure we are appropriately providing the right care at the right time with the right price."

For Beaumont, it's their first out-of-state foray in its ongoing expansion.

The health system merged in 2014 with Oakwood Healthcare and Botsford Hospital, and has grown to include eight hospitals with 3,429 beds. It has almost 5,000 affiliated physicians and 38,000 employees.

Beaumont also is building a new, $40 million mental health hospital in Dearborn and has plans to open 30 new urgent care centers in southeastern Michigan along with several outpatient centers. 

"From Beamont's perspective, we are very excited about this opportunity," CEO John Fox said of the deal with Summa Health. He said he hopes to complete the deal by the end of 2019.

"We think we can get it done this year, but we are hesitant to give any dates," Fox said. "Any transaction like this, of this size, has got to go through some regulatory reviews and approvals. We're not seeing any problem with that, but until it's over, it's not over. That's where the timing can get a little complicated."

The partnership with Summa Health might not be the only out-of-state expansion for Beaumont, Fox said. 

"We look at everything going on within 300 miles of southeast Michigan," he said. "So we look at all of the operators in northern Ohio, northern Indiana, everybody in Michigan, Illinois and beyond, because the reality of it is that in American health care today, regional health systems are emerging that are crossing state lines and aggregating markets.

"We are not looking at anything in California or Florida, and don't plan on doing that. But it's the pressure that we're all under in health care to get size of scale so we can lower our unit costs, become more efficient, more affordable for the consumer is a real imperative that we take seriously.

"So we're constantly looking, but we're not just trying to get bigger. We'll only look at something that will make us also better. And we believe that the partnership with Summa Health met that criteria."  

Yet, Fox said, he is not concerned that Beaumont's growth is happening too fast or that quality of care will suffer because of the rapid expansion. 

"We watch that like a hawk," he said, noting that when Beaumont added the Oakwood and Botsford systems to its umbrella, it was an opportunity to learn.

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"We have very consistent measurement systems and processes in place, and so I think financially we're healthier and I think we are producing a better value for the patient with our quality metrics improving. 

"I think Summa Health has been doing the same thing, and again, we'll be working together to learn from each other going forward. There's a local management team here that will continue to manage Summa Health and they do it well. And that's our approach going forward."

Summa Health also has an insurance provider, SummaCare, which, Deveny said, has been in business in Ohio for 27 years and offers small group, large group and individual plans. Its biggest offering is a Medicare Advantage plan, he said. It also provides third-party administration for large organizations, such as the Cleveland Clinic, university health systems and manufacturing companies. 

"SummaCare is part of the local operations, but really Beaumont will have the opportunity to use their capabilities and their capacities wherever it makes sense," Deveny said. "So everything from potentially doing employee management to, you know, there could be an opportunity to develop products or even some direct-to-employer opportunities. But that is really going to all be part of that due diligence and then what will the market bear? What will the market want?"

Fox said Beaumont would have to get a state license and leap some regulatory hurdles to bring SummaCare to Michigan, but "certainly their competencies and capabilities translate across state lines."

Summa Health lost its accreditation in 2017 to run an emergency medicine physician training program. The Akron Beacon Journal reported that there were delays in treating stroke patients, and that first-year residents and rotating residents were seeing patients without supervision. Some patients were sent home without being examined by an attending physician. There also were reports of intimidation of resident doctors. The hospital system also has a history of financial problems. 

Deveny said Summa Health worked to address all those issues before it went in search of a business partner.  

"Before we went out to market, so to speak, we addressed all the issues operationally from a performance standpoint," he said. "We received full accreditation for the institution. We have expanded residency programs in obstetrics, surgery, internal medicine and our cardiac fellowship this year.

"We have an active application in to get the emergency medicine residency here. It would not be the old residency, but a new, de novo program. So we had a site visit in June. We expect to hear some time in September as to whether we will be granted the seats for the emergency medicine program. 

"I think the Beaumont relationship brings us a larger platform of differet residency programs that we don't have; and we also do a behavioral health psychiatry residency, which Beaumont doesn't do, so we have the opportunity to share trainees, look for opportunities for expansion together." 

Fox said the Summa Health name will continue in Ohio. 

"Summa Health, the brand that's here locally means something locally. Using the Beaumont brand in Michigan makes more sense because a lot of people know it. So from our standpoint, and I think Summa Health would agree, we anticipate Summa Health continuing as Summa Health in this market. 

"We'll have some common denominator where it'll be part of something bigger, but we haven't frankly figured that out yet. The way we put Beaumont on all the buildings in southeastern Michigan, that's not anticipated here" in Ohio.

Contact Kristen Jordan Shamus: 313-222-5997 or kshamus.com. Follow her on Twitter . 

Source: Freep.com

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