Dive summary:
- Dr. Cliff Deveny, CEO and president of Summa Health, plans to step down from his position at the end of the year. according to a Wednesday email sent to staff reviewed by Healthcare Dive.
- Deveny’s departure comes less than a month after venture capital firm General Catalyst’s spinoff, Health Assurance Transformation Company, completed its $515 million acquisition of the Ohio-based health system. The deal will turn Summa, a nonprofit, into a for-profit company.
- Starting January 1st, Deveny will assume the role of chief executive officer emeritus and strategic advisor. Daryl Tol, president of HATCo, will serve as interim CEO. Summa expects its executive search to take several months, according to a spokesperson.
Diving information:
General Catalyst’s acquisition of Summa Health marks the first time a private equity firm has fully owned a health system. General Catalyst sees the deal as an opportunity to test ways to improve hospital operations, without the risk of cash shortfalls.
Deveny The memo indicates that employees could be taken aback by his departure, given his proximity to the acquisition.
“I know the change may be unsettling. But I want you to know that this decision has been made thoughtfully, collaboratively and with the long-term success of Summa in mind. It is the right decision at the right time,” the CEO wrote.
Summa Health serves approximately 1 million patients annually through operations at two acute care hospitals, a rehabilitation hospital, a network of community medical centers and physician offices. Summa Health also operates a health insurance division called SumaCare.
Summa Health had financial problems prior to the HATCo acquisition, reporting poor operating returns and carrying high levels of long-term debt.
General Catalyst promised Summa Health millions of dollars above the purchase price, including $15 million to fund community health, $350 million for technology investments and $200 million for strategic transformation projects. Summa Health executives have said the investments should collectively improve the health system’s viability.
Still, the acquisition took about two years to close, in part because there is greater scrutiny of deals that transition nonprofit health systems like Summa to for-profit entities. Studies have shown that the quality of care decreases and prices increase once such agreements are completed.
General Catalyst had to agree to numerous conditions to get the deal approved by Ohio regulators. These included increasing the purchase price, committing to include local community members on Summa Health’s board of directors, and promising to maintain previous levels of medical services and charity care.
Ohio Attorney General David Yost finally gave the green light to the deal in June before it was finalized on October 1.
