Southfield-based Beaumont Health has announced it is ending partnership plans with Ohio’s Summa Health. The two organizations had been working over the last year to create a partnership, signed a definitive agreement in December 2019, and later received all necessary state and federal regulatory approvals.
The organizations did not give a reason for ending the partnership. They are finalizing details and next steps to end the planned deal. Each organization has continued to operate independently, and each will continue to focus on providing health care services for their respective markets.
The companies signed a letter of intent in July 2019 and began a review of their clinical, regulatory, and financial systems. Summa was to become a wholly owned subsidiary of Beaumont Health.
One of the largest integrated health care delivery systems in Ohio with annual revenue of $1.4 billion and about 7,000 employees, the not-for-profit organization includes four hospitals. Under the agreement, Summa Health would have maintained its local leadership and board. SummaCare, Summa’s insurance product, would have been able to expand into new markets with the deal.
In January, the organizations signed a definitive agreement.
Beaumont has taken a financial hit due to the COVID-19 pandemic. In the first quarter, its net income was -$278.4 million, a decrease of $407.5 million over the same period in 2019. Operating revenues fell to $1.07 billion, a $78.2 million decrease over the $1.15 billion reported in the first quarter of 2019.
Net operating income for the first three months of 2020 was -$54.1 million (-5 percent operating margin), a $91.7 million decrease from 2019’s result of $37.6 million (3.3 percent operating margin). Non-operating losses for the first quarter were $224.6 million, compared to a non-operating gain of $91.6 million in the same period last year.
Stay home orders and concerns about the virus led to reductions in emergency center visits, non-essential surgeries, and diagnostic services.