Catholic Health Partners has reached a tentative deal to acquire Kaiser Permanente Ohio’s insurance plan, physician practices and medical offices in Northeast Ohio.
Under the initial agreement with Kaiser Permanente, the Cincinnati-based health system will take over health coverage and medical care for more than 80,000 patients enrolled in the health plan throughout Northeast Ohio.
The announcement on Wednesday comes as Catholic Health Partners (CHP) finalizes another major move in the region to acquire a minority ownership stake in Summa Health System, Akron’s largest hospital system.
“We’re here because it’s part of our growth strategy to find the right partners at the right place at the right time,” CHP spokeswoman Liz Vogel said.
When the deal with Kaiser Permanente is finalized over the next several months, CHP will operate the insurance arm (Kaiser Foundation Health Plan of Ohio) and the medical practice (Ohio Permanente Medical Group) as a new, yet-to-be-named organization.
CHP plans to maintain the 15 medical offices that Kaiser Permanente operates to treat enrollees in its insurance plan throughout the region, Vogel said.
Kaiser Permanente has about 1,600 employees in Northeast Ohio.
“Our goal is that for patients, they really don’t feel a change once the transaction is completed,” Vogel said.
The deal will require approval by the boards of both organizations, as well as the Ohio Department of Insurance.
Financial terms weren’t disclosed.
Catholic Health Partners is the largest health system in Ohio, with 24 hospitals in Ohio and Kentucky and net operating revenue of $3.8 billion.
Kaiser Permanente Ohio’s insurance business? has been losing money, according to filings with the Ohio Department of Insurance.
The insurer had a net loss of nearly $13.9 million this year through March 31, according to its latest quarterly statement filed with the state. Last year, it posted a net loss of $59.6 million.
Nancy Paton, chief public affairs officer for Kaiser Permanente Ohio, said the deal is seen “as the best way to ensure our more than 80,000 members are going to continue to get that integrated model of care.”
“As a statewide organization, CHP possesses unique advantages, including the presence in Ohio, scale and a track record of quality and cost-effectiveness needed to perpetuate our legacy and care for our members,” Patricia D. Kennedy-Scott, regional president, Kaiser Foundation Health Plan of Ohio, said in a news release. “I am impressed with CHP’s commitment and ability to work closely with our physicians and staff in order to serve the care needs of members and patients in Northeast Ohio.”
For Catholic Health Partners, acquisition of Kaiser Permanente Ohio provides even greater market penetration in northern Ohio, where it owns hospitals to the west of Akron in Toledo, Lima and Lorain and to the east in Youngstown and Warren.
Mercy Medical Center in Canton is owned by the Sisters of Charity Health System, which is not part of CHP.
“This opportunity interests us because it preserves a values-based, patient-centered care model that we can expand throughout the region,” Michael D. Connelly, president and chief executive officer of Catholic Health Partners, said in a news release. “Additionally, it enables us to focus on enhancing quality, improving access to health care and effectively managing costs.”
CHP also is expected to complete a 10-year deal this summer to buy about a third of Akron-based Summa Health System.
Summa — Summit County’s largest employer — includes Akron City, St. Thomas, Barberton and Wadsworth hospitals, a physician practice, other owned or affiliated businesses and insurer SummaCare.
Summa officials haven’t talked with Catholic Health Partners about SummaCare and Kaiser Permanente working together after the deals are complete, SummaCare President Marty Hauser said. “The possibilities exist that there could be some synergies created in the future.”
SummaCare provides health insurance services to about 250,000 enrollees, including about 125,000 in Northeast Ohio.
“We’ve always admired Kaiser Permanente’s care delivery model with their emphasis on prevention and the way they’re integrated with the doctors and the hospitals and the health plans,” Hauser said.
Cheryl Powell can be reached at 330-996-3902 or firstname.lastname@example.org. Follow Powell on Twitter at twitter.com/abjcherylpowell.