Deveny said merging with Beaumont "also gives our insurance plans, Summa Care, a chance to grow in Ohio and beyond." He said he also expects Beaumont to help Summa expand its clinical service lines to compete with the Cleveland Clinic, which owns a hospital in Akron.
It is expected there will be a financial investment by Beaumont into Summa in the Akron market to expand services and health insurance membership. However, the precise amount will be hashed out during the next few months during the due diligence phase, officials said.
Fox said he expects SummaCare's Medicare Advantage and commercial products in Ohio to grow at a faster pace than in the past. He said there are internal discussions about the potential for starting insurance products in Michigan.
But Fox said Beaumont's expansion into Ohio doesn't mean slowing of its growth plans in Southeast Michigan.
Over the past year, Beaumont has announced plans to build 30 urgent care centers in a partnership with Atlanta-based WellStreet Urgent Care, a 150-bed behavioral health hospital in Dearborn with Universal Health Services, King of Prussia, Pa.-based for-profit company and three new outpatient centers in Livonia, Lenox Township and Royal Oak.
"For Beaumont this is a big position for us to be in," Fox said. "We are enthusiastic about it. A lot of people say, Ohio, something happens at that border. I've lived in Ohio. It is an adjacent market. The next phase in healthcare, we will see more regional expansion."
Fox said Beaumont became interested in Summa because it has a similar mission, vision and values, along with a strong commitment to the community.
"We (revised our) strategic plan in 2015 to look at regional expansion and look at all markets 300 miles out," Fox said. "We knew of Summa. They were on our radar screen."
The executives declined to speculate on merger savings. "It's too early. We will know more in the next 90 days. It is a unique partnership because we are farther away," Deveny said.
After laying off about 300 employees in 2017, Deveny said he doesn't expect any layoffs of employees or managers. Deveny said Summa has added about 91 positions this year.
"We do believe that restructuring debt with the new combined organization we will get savings," Fox said. "We will look at the supply chain and combine them together to get a drop in unit costs. We are confident" there will be savings.
On the governing board, Deveny said board seats will be added for Beaumont on the 16-member Summa board. "We will continue to have a fiduciary board with representatives from Beaumont. There will be reserved rights on budgets, sale of assets, acquisitions," he said.
At closing, Deveny said Mercy Health will give up its five board seats. He said Mercy's five-year investment into Summa has paid off in improved operations and efficiencies.
"They (Mercy) have gone in a different direction with their merger with (Maryland-based) Bon Secours Health System," he said.
Beaumont Health has $4.7 billion in total annual net patient revenue, eight hospitals with 3,429 beds, 145 outpatient sites, nearly 5,000 affiliated physicians and 38,000 employees. Beaumont also has 4,800 doctors, 20 percent, or 900, who are employed in Beaumont Medical Group.
"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 healthcare leader. The planned addition of Summa Health allows us to take one step closer to achieving this key strategic priority," John Lewis, chair of Beaumont Health, said in a statement.
By adding Summa's 7,000 employees, 1,200 doctors (35 percent employed) and $1.4 billion in revenue, Beaumont is expected to grow into a $6.1 billion healthcare company with 45,000 employees, 12 hospitals and 4,729 beds with 6,000 doctors, including 1,320 who are employed.
"Beaumont makes deal to acquire Ohio health system" originally appeared in Crain's Detroit Business.