Dive Brief:
- Summa Health CEO and President Dr. Cliff Deveny plans to step down from his post at the end of the year, according to a Wednesday email to staff reviewed by Healthcare Dive.
- Deveny’s departure comes less than a month after venture capital firm General Catalyst’s spinoff, the Health Assurance Transformation Company, completed its $515 million acquisition of the Ohio-based health system. The deal will transition nonprofit Summa into a for-profit company.
- Beginning Jan. 1, Deveny will move into a CEO emeritus and strategic advising role. Daryl Tol, president of HATCo, will serve as interim CEO. Summa expects its executive search will take several months, according to a spokesperson.
Dive Insight:
General Catalyst’s acquisition of Summa Health marks the first time a venture capital firm has fully owned a health system. General Catalyst bills the deal as an opportunity for it to test ways to improve hospital operations, without the risk of cash shortfalls.
Deveny’s note addresses that employees might be taken aback by his departure, given its close proximity to the acquisition.
“I know that change can feel unsettling. But I want you to know this decision has been made thoughtfully, collaboratively, and with Summa’s long-term success in mind. It’s 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, one rehab hospital, a network of community medical centers and physician offices. Summa Health also operates a health insurance arm called SummaCare.
Summa Health struggled financially 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 toward 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 more scrutiny of deals that transition nonprofit health systems like Summa to for-profit entities. Studies have shown quality of care declines and prices rise after such deals are completed.
General Catalyst had to agree to numerous conditions to secure approval for the deal from Ohio regulators. Those included raising the purchase price, pledging to post local community members to Summa Health’s board and promising to maintain previous levels of medical services and charity care.
Ohio Attorney General David Yost ultimately greenlit the deal in June before it was finalized on Oct. 1.
