General Catalyst led a $95.5 million funding round for the Texas-based physician practice chain in early January, and a week later the investment firm acquired Akron, Ohio-based Summa Health. The plan was announced.
General Catalyst has been expanding in health care in recent years, last year forming a specialized health care provider called Health Assurance Transformation Corporation, led by former Intermountain Health CEO Mark Harrison, M.D. Established a department.
The company's investment in physician group Harbor Health will help the company continue to grow. In the last year, Harbor Health has grown from two locations to eight. General Catalyst was interested in Harbor Health for a variety of reasons, including its risk agreement with Blue Cross Blue Shield of Texas and his ACO REACH product with CMS.
“There is a strong appetite among employers for new approaches to healthcare delivery that prioritize outcomes, enhance consumer engagement, and proactively plan healthcare,” said Managing Director of General Catalyst. Director Chris Bischoff said. “We believe Harbor Health is providing easy access to the nation's largest population and bringing much-needed change as we seek to transform value-based care in the commercial sector. .This is consistent with our health assurance theme.”
HATCo then announced plans to acquire Summa Health, which includes acute care, outpatient and home health services. Pending regulatory approval, Summa will become a wholly owned subsidiary of his HATCo and establish a regional foundation to further the health system's mission. The foundation will also invest in social determinants of health programs.
If the investment is successful, General Catalyst will repay Summa Health's $800 million in debt. The company does not anticipate any layoffs at Summa Health and expects its management team to remain in place at this time. The acquisition will transition Summa from a nonprofit to a for-profit health system.
“It would most certainly be creative to make it for-profit and perhaps tolerate financial losses on the health system side to realize greater potential profits on the venture side. “It's not that different from other health systems that leverage margins across the board. You can take losses on one side and gain gains on the other,” said Chris, chief innovation officer at Aurora, Colo.-based UCHealth. said one Richard Zane, MD. Beckers. “We hope that patient care continues to be true north, but this could be a story worth watching.”
