4 Takeaways on General Catalyst’s Plan to Acquire Summa Health

Last October, the huge venture capital firm General Catalyst (GC) said it planned to buy a health system and use it as a transformation proving ground for technologies developed by its portfolio companies. The plan’s concept is simple. Finding a partner and executing such a deal figured to be another matter.

But now, just several months later, GC’s recently formed business venture Health Assurance Transformation Corporation (HATCo) says that it has signed a nonbinding letter of intent to acquire nonprofit Ohio-based Summa Health, one of the state’s largest integrated health care delivery systems, and convert it to a for-profit system.

The aim is for HATCo, which is headed by former Intermountain CEO Marc Harrison, M.D., and Summa Health to lock arms on a long-term journey to reshape and improve the future of care delivery. This will involve a committed shift to value-based care and access to new revenue streams, resources and innovation. GC has long advocated for a fundamentally different approach to health care transformation, in which all transformational aspirations begin with keeping the patient experience in mind and how technology is deployed to enhance that experience.

What You Need to Know about the Acquisition Plan

1 | Hurdles still must be cleared.

Transforming a nonprofit organization to a for-profit system is expected to be a significant and complex challenge, with potential regulatory delays. Ben Sutton, Summa’s chief operating officer, told Axios that the process will require a lot of work, adding, “I don’t think there’s anyone actually here at the table who has worked in a for-profit system.”

2 | The focus will be on putting innovation in, not taking cost out.

GC and HATCo intend to build “modern, tech-enabled health care delivery platforms at scale, across all points of care,” noted a blog co-authored by Harrison and Hemant Taneja, GC’s CEO and managing director.

3 | Don't look for a quick flip.

GC states that it will operate on a longer time horizon than typically is found in private-equity deals. Harrison also has emphasized that he does not envision reductions in workforce or job loss. The commitment is to a transformation that benefits the entire community.

4 | This is not an isolated transaction.

It is part of a broader engagement strategy with the wider health care ecosystem. GC now has more than 20 health care system partners, innovators and leaders who ascribe to its principles of health assurance — making care more proactive, accessible and affordable. The planned Summa acquisition will be the most significant step in moving from thesis to application.