Catholic Health Partners is restructuring a $250 million deal for minority ownership of Summa Health System after the local Catholic diocese leader refused to approve the partnership.
In a recent letter to Catholic Health Partners, Bishop Richard Lennon of the Catholic Diocese of Cleveland cited Summa’s publicly stated plans to continue providing sterilizations, contraceptives and abortions on a limited basis when medically necessary among his reasons for rejecting the deal.
Catholic health-care systems seeking a partnership with a non-Catholic hospital must ask the local bishop to determine whether the deal opposes Catholic faith and morals.
“In light of the consistent message issued by officials of SHS [Summa Health System] regarding delivery of services, many people have contacted me regarding their concerns that such a relationship between SHS and CHP gives the message that CHP is supporting healthcare issues contrary to Catholic teachings,” Lennon wrote in his recent letter to Catholic Health Partners. In a prepared statement on Thursday, Catholic Health Partners said it “will no longer be directly involved in the Summa Health System investment.”
“We appreciate Bishop Lennon’s careful consideration regarding our partnership with Summa Health System,” Catholic Health Partners’ spokeswoman Liz Vogel said. “As a Catholic health-care organization, we understand and respect his point of view, which has led us to restructure the transaction.”
Instead, she said, the deal now will occur between Summa and HealthSpan Partners, “an auxiliary organization, which is a secular, tax-exempt entity that invests in innovative health-care ventures,” she said.
No approval required
The new deal won’t require the bishop’s approval, she said.
Robert Tayek, director of media and public relations for the diocese, said it’s too early to say whether the restructured deal still requires the bishop’s review and approval.
The diocese did not receive any new proposals for review regarding the partnership with Summa as of Thursday afternoon, said Tayek.
The restructured transaction is expected to close as early as today, HealthSpan Partners spokesman Dan Hounchell said in an email.
According to the original definitive agreement, a new entity called Community Health System was created through which Catholic Health Partners is to acquire its minority stake in Summa.
Community Health System registered “HealthSpan Partners” as a trade name with the Ohio Secretary of State’s office on July 31, according to state records.
Summa spokesman Mike Bernstein said the restructured deal won’t require another vote by the health system’s board of directors or further review by the Ohio Department of Insurance, which was originally required because Summa includes an insurance company.
“We are pleased to begin working with HealthSpan Partners, which is Catholic Health Partners’ auxiliary organization that will now invest $250 million to become a 30 percent owner of Summa Health System,” Bernstein said in a prepared statement. “We are excited about the outcome of our two-year process to seek a like-minded, not-for-profit partner to enhance our ability to meet the health-care needs of Northeast Ohio.”
Terms of agreement
Under the terms of the definitive agreement approved by the boards of Summa and Catholic Health Partners in June, Summa isn’t required to follow the Ethical and Religious Directives for Catholic Health Care (ERDs), the guidelines for Catholic hospitals from the U.S. Conference of Catholic Bishops.
Under the 10-year partnership agreement, Summa facilities can’t be banned from providing tubal ligations, vasectomies and prescriptions for contraceptive drugs and devices — all services in conflict with the Catholic church.
In his letter, the bishop said: “I am troubled by a Catholic entity knowingly entering into a transaction where the ERDs are set aside.”
The section of the Ethical and Religious Directives that covers new partnerships indicates “Catholic health-care organizations are not permitted to engage in immediate material cooperation in actions that are intrinsically immoral, such as abortions, euthanasia, assisted suicide and direct sterilization.”
The partnership agreement states “no portion of the CHP investment will be used to support any procedures or activities of Summa operated facilities that conflict with the Catholic ERDs, nor will CHP provide management services or support for, or otherwise be connected to, or financial benefit from, such procedures.”
In his letter declining to approve the partnership, Bishop Lennon said the deal would give Cincinnati-based Catholic Health Partners “a meaningful role” in the operations of Summa, including a multimillion dollar investment, seats on the Summa board of directors and a commitment to provide or fund management positions.
CHP is the state’s largest hospital system, with 24 hospitals in Ohio and Kentucky and $5.6 billion in assets.
The organizations already have started working together to improve Summa’s performance in the areas of billing, supply costs, labor productivity and average length of stay for hospitalizations.
A high-level executive from Catholic Health Partners joined the Summa staff in July to begin integrating the health systems.
Cheryl Powell can be reached at 330-996-3902 or email@example.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.