Venture capital firm General Catalyst has agreed to acquire Ohio-based nonprofit health system Summa Health and reestablish it as a for-profit organization, the health system’s board of directors announced Wednesday.
General Catalyst announced plans in October to buy a health system and use it as a proving ground for the technology developed by its portfolio companies, especially after finding that health systems are risk averse and slow to adopt new products that could potentially improve care or simplify workflow. The venture firm, which has backed consumer companies like Airbnb and Warby Parker, spun out a separate company — the Health Assurance Transformation Corporation (HATCo) — to operate the health system.
Though General Catalyst has asserted that owning a hospital system would allow it to more directly shape operations in a way that benefits patients — including by offering clinicians and patients faster access to new technology — critics have warned that the ownership model risks harm by pressuring the health system to use products they may not have chosen otherwise. Similar takeovers by private equity firms, for instance, have seen a spike in health complications, STAT has reported.