Summa, Catholic Health Partners aim to team up

(Story updated at 2 p.m. ET with comments from health system officials.)

Summa Health System, Akron, Ohio, and Catholic Health Partners, Cincinnati, have signed a letter of intent to form a strategic partnership.

Summa, which owns five hospitals in Ohio, had sought a not-for-profit partner since July to bolster its financials. CHP, which owns 23 hospitals, with two and Kentucky and 21 in Ohio, would receive a minority interest in Summa. No further financial details about the deal were disclosed in a news release announcing the plans. Officials said they expect the partnership to be finalized by mid-year. The search included about 10 not-for-profit systems, Summa officials said.

“We have had the unique opportunity to get to know several leading national healthcare organizations throughout this process,” said Summa board chair Norman Wells Jr. in the news release. “Our experience with each has been extremely positive, and we have learned a great deal about what makes them successful. When looking specifically at what is most important to us, I am confident that Catholic Health Partners is the right group to join us on our journey to transform the delivery of healthcare.”

The two not-for-profit systems have already established a relationship, helping to expand the SummaCare Medicare Advantage plans to new markets. Officials cited that both systems have accountable care organizations that are part of the CMS Medicare Shared Savings Program and have implemented patient-centered medical homes as evidence the two groups will be compatible.

“When we began this process, we were very clear that we would only enter into an agreement with a non-profit organization that shared our mission, vision and values,” said Summa President and CEO Thomas Strauss in the release. “While there still is a great deal of work to be done during the next several months to finalize a partnership, I believe that CHP shares our view that the way healthcare is delivered in our nation must change. At Summa, we are well positioned for future success, but together with CHP, I believe that we can truly be transformational.”

During a Thursday call with reporters, officials wouldn't disclose how large of a Summa ownership stake CHP would retain. CHP would have representation on Summa's boards equivalent to its ownership share, Summa board member Richard Marsh said. While officials wouldn't disclose which 10 organizations they spoke with in regards to a partnership, Marsh described them as “all very strong, large regional players.” Retaining local autonomy was a big factor in pairing with another Ohio organization, as well as keeping jobs in the state, Strauss added.

Summa and CHP didn't call the move a merger, but did say the transaction will give the combined group the largest market share in Ohio, as CHP retains about 12% and Summa has 4% to 5%, officials said on the call.

The move will give Summa leverage and flexibility to control costs, as well as the chance to take advantage of cost-cutting practices already employed by CHP, Strauss said. The partnership made sense as the sector moves away from the pay for services care model, he added.

“Our belief is that we will move aggressively, and have moved aggressively to population health and population health management,” Strauss said. “That's one of the things that shows we really are like-minded.”

CHP will continue to look for growth opportunities, said Jane Crowley, CHP executive VP of clinical integration and business development. The organization's strategic plan includes continued expansion within Ohio, she added.