The greater than seven-year partnership between Summa Well being and HealthSpan Companions, a division of Bon Secours Mercy Well being, will finish two years forward of schedule, in response to an announcement launched Wednesday, Dec. 30.
The investor relationship started in September 2013 when HealthSpan, a secular auxiliary group of Bon Secours, the fifth-largest Catholic well being system within the nation, purchased a 30% stake in Summa for $250 million.
The separation takes impact Jan. 1, 2021. The connection was scheduled to final till the beginning of 2023, if not prolonged. Dr. Cliff Deveny, president and CEO of Summa, mentioned the well being system paid an undisclosed quantity to HealthSpan early Wednesday to finish the partnership.
Deveny mentioned in a cellphone interview with Crain’s that the separation won’t considerably harm the Akron-based well being system’s fiscal place.
“When the funding was made in 2013, Summa was not within the form it’s at this time,” Deveny mentioned. “We’re in a significantly better scenario at this time. Summa has really fared comparatively nicely in 2020 and has maintained a constructive backside line via this entire course of. This transaction doesn’t put us in any type of scenario of desperation.”
Summa in its most up-to-date monetary disclosure assertion, for the six-month interval that ended June 30, 2020, reported working revenue of $1.735 million. That was down from working revenue of $23.eight million for the like six-month interval of 2019, reflecting the heavy toll of COVID-19 on well being care programs. (You’ll be able to go right here to entry the report.) Summa mentioned within the report that in the course of the second quarter of 2020, it “obtained distributions of roughly $20 million from the Coronavirus Help, Aid, and Financial Safety (CARES) Act, advances related to the Medicare Accelerated Cost Program of roughly $44 million, and deferred fee of employer taxes of roughly $7 million.” As well as, Summa mentioned, it “obtained a revolving line of credit score within the most principal quantity of $100 million. In Could 2020, Summa Well being withdrew the total $100 million on the road of credit score.”
Deveny mentioned in Wednesday’s cellphone interview that Summa is just not actively in search of one other accomplice. A plan to accomplice with Southfield, Mich.-based Beaumont Well being fell via in Could because the COVID-19 pandemic disrupted well being care programs throughout the nation. The proposed deal, which had already obtained all mandatory regulatory approvals, would have created a nonprofit system with 12 hospitals and $6.1 billion in annual income.
“Bondholders, ranking businesses, any type of regulatory group usually are not requiring us to go discover a accomplice or do something like that,” Deveny mentioned.
“There’s nothing energetic occurring, however , all organizations are continuously searching continuously as to what’s the finest scenario to satisfy the wants of the neighborhood,” he mentioned. “Proper now, there may be nothing.”
Bon Secours president and CEO John Starcher wrote in a letter to workers earlier in 2020 that COVID-19 has had an unprecedented impression on the well being care business and that the system projected working losses of $100 million per 30 days, forcing a hiring freeze, wage freezes and the furloughing of workers.