Venture capital firm General Catalyst’s plan to buy Akron, Ohio-based nonprofit health system Summa Health is getting pushback from local advocates who want state officials to impose stronger checks on the deal’s price tag and impact on local care.
On Friday, members of Summa Is Not For Sale, which describes itself as “a coalition of concerned Ohio residents,” wrote to the state’s attorney general David Yost asking his office to investigate the deal and demand assurances from General Catalyst and Summa before giving it the go ahead.
Summa Health is among Ohio’s largest integrated healthcare delivery systems with two acute care hospital campuses, 15 community medical centers, a rehab hospital, a health insurance arm, a multispecialty group practice and a research and medical education program. It employs more than 8,000 people, and reported almost $1.9 billion in total revenues and an $8 million operating loss in 2024.
General Catalyst announced the deal, conducted through its Health Assurance Transformation Corporation (HATCo) unit, in January 2024 and then moved forward with a signed definitive agreement in November. In releases and blog posts, the firm has characterized the purchase as “not a quick flip but a long-term commitment to transformation that benefits the community”—an effort to distance the transaction from private equity hospital purchases that critics say cripple hospitals in pursuit of quickly extracting value.
However, one immediate concern for Summa Is Not For Sale highlighted in Friday’s letter is the deal’s $485 million price tag, which is based on General Catalyst’s assessment of fair market value.
The letter’s authors—Matthew Charlebois and David Guran, both affiliated with the group—said that number “appears to reflect only the hospital’s debt and not the enterprise value of the organization or its substantial net assets.” Publicly available filings show the system’s net assets to be nearly $970 million, while its total liabilities land at just over $1 billion.
“By allowing General Catalyst to acquire a charitable nonprofit system at a distressed valuation—particularly while assuming no ongoing legal obligation to continue the same level of community benefit—the sale may amount to a misuse of charitable assets,” they wrote.
Though the deal would transition Summa from a nonprofit to a for-profit, General Catalyst has said that it intends for the system to continue the community benefit and essential services it currently offers.
The venture capital firm and Summa’s leadership have also said that the $485 million will be combined with the system’s current cash to eliminate debt, with the leftover going toward a separate foundation investing in community health.
On the price tag itself, a spokesperson for the health system told press last month that the $485 million “was determined following a fair market valuation conducted by an independent third-party company that is recognized as a national expert in healthcare transaction advisory services.”
Still, the authors said they are “concerned” that plan could run afoul of federal and Ohio nonprofit law regarding prohibited inurement—when a nonprofit’s assets are used for the benefit of private parties.
Repaying the debt “directly enriches HATCO, because it eliminates liabilities that would otherwise reduce the value of the newly acquired assets. As a result, HATCo’s post-sale valuation increases by $485 million—an indirect benefit to a private corporation at the expense of public assets and charitable care,” they wrote while citing three court cases in and out of the state on the issue.
More broadly, the authors raised concerns about a corporate acquisition and the switch to operating as a for-profit.
Here they pointed to Mission Health’s 2019 purchase of Mission Health in North Carolina, which has since been plagued by quality concerns, reduced services and reduced community benefit. They also evoked the recent bankruptcies of private equity-backed health systems of Steward Healthcare and Prospect Medical Holdings, which sold off their real estate to finance profitable exits.
The pair closed out their letter by requesting Yost’s office not to permit the purchase until it investigates whether the transaction constitutes private inurement illegal under Ohio law, and requires independent valuation as well as a community impact study. Though not a direct demand for the attorney general, they also called for Summa’s real estate to be placed into an inviolable trust to prevent a sale leaseback.
Summa Is Not For Sale has circulated an open petition addressed to Summa’s board opposing the sale, which to date has garnered over 500 signatures.
The group, along with the authors of Friday’s letters, have previously issued a list of demands it said must be met or addressed before a deal is closed, which include some of the concerns raised in Friday’s letter. Others involve the makeup of the promised community foundation’s board, executive compensation, care quality, hospital prices and employee benefits.
U.S. Rep. Emilia Sykes, a Democrat serving the local district, has raised similar concerns to HATCo and Summa and met with the parties to discuss them, but told Cleveland.com last month that she couldn’t get all of the answers she was looking for due to the ongoing regulatory review.
Alongside Yost’s review, the transaction requires green lights from the Ohio Department of Insurance, the Federal Trade Commission “and all other applicable regulatory authorities,” according to an FAQ Summa posted online regarding the deal.
Fierce Healthcare has reached out to General Catalyst and Summa Health for comment, and will update this story with any response.