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Motivation Behind a Strategic Partnership: Q&A With Summa Health System President and CEO Thomas Strauss

Earlier this week, Akron, Ohio-based Summa Health System, one of the largest integrated healthcare delivery systems in Ohio, announced its intention to search for a like-minded and leading non-profit organization with which to form a strategic partnership.

Summa Health System CEO Tom StraussSumma Health is beginning the exploratory process for a strategic partnership during a period of strength and financial stability. The system's BBB+ bond rating by Fitch Ratings was recently reaffirmed; it recently opened a $17 million emergency department in Green, Ohio; and its ACO was selected by CMS to participate in the Medicare Shared Savings Program, one of only a handful of Ohio ACOs chosen. According to Thomas Strauss, president and CEO, the system's stability is exactly why the board approved a strategic partnership.

Here, Mr. Strauss discusses Summa Health's motivation, the ideal partner and the health system's method for the exploratory phase.

Question: What is the motivation behind Summa Health System's search for a partner?

Thomas Strauss: We recently went through an extensive strategic planning process, which we do every three years. It took up the majority of last year, especially in light of healthcare reform and challenges facing the healthcare industry. As healthcare moves through the two worlds of fee-for-service and value-based purchasing, we want to be at the head of the game.

After looking at our financial performance, we saw that we have never been stronger. We have been experiencing a period of high performance. We have been approached by several health systems throughout the country in respect to our strong reputation for quality, our leadership position in the healthcare community and our multiple years of excellent operational and financial results. We wanted to pursue a potential partner when we are in the strongest position we have ever been in.

With that, we think it is our responsibility to be proactive in enhancing our position and our financial stability and allowing us to offer high quality and compassionate care to our community. We are not alone in this desire. In 2011, nearly 100 hospitals announced affiliations or strategic alliances with other organizations. We anticipate even more in 2012.

Q: What will Summa Health's exploratory process entail?

TS: Well, the other night was the board meeting where we got unanimous support to pursue a partner, so the process is just beginning. We created a special committee, which includes members of the board, system leadership and members of our medical staff. We have also engaged some experts to take us through the process. The first step will be engaging in a dialogue with organizations to see if they have an interest. We expect they will because we have been approached by several health systems interested in partnering with our system. We will then send out a request for partnership asking [the organizations] to answer questions about the potential relationship that we may build. Of course, the partnership is for a minority interest; the reason being that we would like to continue to have local control and governance.

Q: Is Summa Health looking for a partner with strength in any particular service area?

TS: We don't have specific thoughts on what strengths we would like a partner to have. However, we are looking for someone who can share ideas of how to enhance performance; someone that matches our vision for the future and our belief that population health is the future of healthcare. We are also looking for an organization that matches our culture and values. We will only pursue a partner that strengthens our organization at all levels and benefits our patients, members, employees, physicians and our community.

Q: Summa Health's news release on the strategic partnership said that a partnership is not definite. In your mind, what would lead Summa to decide against a partnership?

The idea is that, at this point, we are exploring. We are not in distress and we can continue to move forward on our own. If we go through this process and don't find an organization that is prepared to commit as a minority partner and help us in our goals of healthcare transformation, then we will not partner.

Q: You mentioned that a special committee of board, system and physician leadership has been created. How did you choose the members of the committee and what role will it play in the exploratory process?

TS: Our board chairman, Norman Wells, Jr., has helped orchestrate this process with me. Our board members and system members gave us a great number of hours as we were working through this strategic planning process. [The special committee] started with a group of key board members that have worked closely with executive leadership. That group broadened [the other] night to include trustees and some physicians. We have also established what we call a physician council that will help us through [the process].

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