Transforming the Future of Healthcare: General Catalyst's Acquisition of Summa Health

In an unprecedented move that is set to reshape the healthcare landscape in Ohio, venture capital firm General Catalyst has agreed to acquire the Ohio-based nonprofit health system Summa Health. This acquisition will transition Summa Health into a for-profit organization, marking a significant shift in the delivery and accessibility of healthcare services in the region.

Strategic Alignment for Lifelong Healthcare

Summa Health and General Catalyst's Health Assurance Transformation Corp. (HATCo) announced their plans for this acquisition with a vision to create a new, proactive, affordable, and equitable system of community-based lifelong healthcare. The move is expected to drive near-term benefit to the organization and the patients it serves, while also creating a blueprint for other systems and communities.

As a wholly-owned subsidiary of HATCo, Summa Health aims to advance healthcare innovation based on its integrated healthcare delivery system. The acquisition will allow Summa Health to increase local investment and introduce new resources to expand access to affordable quality coordinated care.

Transition to a For-Profit Entity

The transition from a non-profit to a for-profit organization is a significant aspect of this acquisition. However, Summa Health's commitment to charity care will remain unchanged. Proceeds from the sale will establish a community foundation to help the local community and advance Summa Health's mission through increased focused investment into social determinants of health that benefits the entire Greater Akron area.

Financial and Technological Implications

The financial terms of the deal have not been disclosed yet. However, Summa Health reported an operating loss of around $39 million on $1.8 billion in revenue in 2022. The acquisition is being funded by a VC and is operating outside of General Catalyst’s traditional venture fund structure with a very long hold in perpetuity.

On the technological front, the goal is to use technology to make it easier for doctors to provide care and for patients to access it, without negatively impacting employees. The acquisition aims to help Summa move more patients into capitated payment models and make investments in technology to improve the clinician and patient experience.

Next Steps and Potential Impact

Summa Health and HATCo are now entering a due diligence period to further evaluate and define details of the proposed relationship before finalizing a definitive agreement. The acquisition still requires the execution of a definitive agreement and regulatory approval, with plans to finalize an agreement in the spring and close a transaction by year's end.

This acquisition is a significant move that could potentially make health systems more profitable, vibrant, and innovative, with the goal of serving communities with greater impact. It is an example of how strategic partnerships and acquisitions can drive long-term transformation in the healthcare industry through a shift to value-based care.