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The largest health care system in Michigan is about to gain momentum.

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

Under this agreement, Summa Health would become a subsidiary of Beaumont and maintain local leadership and a local board of directors.

The headquarters of Beaumont Health in Southfield. (Photo: Beaumont Health)

Bon Secours Mercy Health, based in Cincinnati, which holds a 30% minority stake in Summa Health, would be "bought back as part of this process by the merged entity and the five seats of the Summa Board of Directors. Health would be replaced by appointees to the health of Beaumont ". said Dr. Cliff Deveny, CEO of Summa Health.

Summa Health began looking for a partner in October, calling on other health systems to form a partnership to contribute to financial stability and growth, Deveny said.

"We needed to find an organization that valued the Summa health system, its mission and how we could really not only support the organization, but also develop it," he said. "… Beaumont is very similar in many ways, not only in regards to DNA and how people think, but also how we focus on the value of care and we make sure to properly provide the right care at the right time with the right price. "

For Beaumont, this is their first foray into the ongoing expansion.

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

Beaumont is also building a new $ 40 million mental health facility in Dearborn, and plans to open 30 new emergency centers in southeastern Michigan, as well as several ambulatory care centers.

"From Beamont's point of view, we are very excited about this opportunity," said Executive Director John Fox about the agreement with Summa Health. He said he hoped to finalize the contract by the end of 2019.

"We think we can do it this year, but we are reluctant to give dates," said Fox. "Any transaction of this size, size, and size must be subject to review and regulatory review. We do not see any problem, but until it's over, it's not over. This is 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're watching everything happening within 300 km of southeastern Michigan," he said. "So we're looking at all the operators in northern Ohio, Indiana, Michigan, Illinois and beyond, because the reality is that in the American health care system today, emergent regional health care that cross borders and aggregate markets.

"We do not plan anything in California or Florida, and we do not plan to do it. But it is the pressure we all face in the health sector to reach such a size that we can reduce our unit costs and become more efficient. , more affordable for the consumer is a real imperative that we take seriously.

"So we're always looking for it, but we're not just trying to get bigger, we're going to look for something that will make us better too, and we think the partnership with Summa Health met that criteria."

However, Fox said he was not worried that Beaumont's growth would occur too quickly or that the quality of care would suffer because of the rapid expansion.

"We look at it like a hawk," he said, pointing out that when Beaumont added the Oakwood and Botsford systems to his umbrella, it was an opportunity to learn.

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"We have very consistent measurement systems and processes in place, so I think we are healthier financially and we are producing better value for the patient through the improvement. of our quality parameters.

"I think Summa Health did the same thing, and again, we will work together to learn from each other, and here we have a local management team that will continue to manage Summa Health and do it well. is our approach to moving forward.

Summa Health also has an insurance provider, SummaCare, which Deveny says has been in business in Ohio for 27 years and offers plans for small groups, large groups and individuals. His most important offer is a Medicare Advantage plan, he said. It also provides third-party administration services for large organizations, such as the Cleveland Clinic, academic health systems, and manufacturing companies.

The headquarters of Summa Health in Akron, Ohio. (Photo: Summa Health)

"SummaCare is part of local operations, but Beaumont will really have the opportunity to use their abilities and capabilities whenever it makes sense," said Deveny. "So, everything from the potential management of employees to, you know, there might be an opportunity to develop products or even opportunities directly to the employer.But that's really going to be part of that due diligence and then what will the bear market be like, what does the market want? "

Fox added that Beaumont is expected to obtain a state license and overcome regulatory hurdles to bring SummaCare to Michigan, but "his skills and abilities certainly apply to all levels of the state."

Summa Health lost accreditation in 2017 to run a training program for emergency physicians. Akron Beacon Journal reported delays in treating stroke patients and that first-year residents and rotating residents saw patients unattended. Some patients have been sent home without being examined by a doctor. Cases of intimidation of resident doctors have also been reported. The hospital system also has a history of financial problems.

Deveny said that Summa Health had worked to resolve all these issues before going in search of a trading partner.

"Before we entered the market, so to speak, we dealt with all the operational issues from the performance point of view," he said. "We received full accreditation from this institution and expanded residency programs in obstetrics, surgery, internal medicine and our cardiology training program this year.

"We have an active application to get emergency medical residency here – it would not be the old residence, but a new de novo program. a site visit in June We expect to receive notice in September if we will get the seats for the emergency medicine program.

"I think Beaumont's relationship brings us a broader platform of different residency programs than we do not have, and we also do residency in behavioral psychiatry, which Beaumont does not do. to share trainees, opportunities for expansion together. "

Fox said the name Summa Health would continue in Ohio.

"Summa Health, the local brand here means something." The use of the Beaumont brand in Michigan makes more sense as many people know it, so from our point of view, and I think Summa Health would be good. We agree that Summa Health will continue as Summa Health in this market.

"We will have a common denominator that will be part of something bigger, but we have not really understood it yet.The way we have Beaumont installed on all buildings in southeastern Michigan is not the same. is not anticipated here "in Ohio.

Contact Kristen Jordan Shamus at 313-222-5997 or at [email protected]. Follow her on Twitter @ Kristenshamus.

Editor's Note: This story has been updated.

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