AKRON, Ohio - Summa Health System's recent struggles could be stabilizing, despite a downgrade by Moody's Investors Service.
On Tuesday, Moody's lowered the health system's credit rating to Baa2 from Baa1, and posted its outlook as negative, citing "... a confluence of unexpected events that accelerated an earlier trend of volume declines and contributed to a material operating loss through nine months of FY 2017."
The largest employer in Summit County, Summa Health has had diminishing revenues and waning consumer confidence over the past year, triggered by a variety of factors. However major restructuring by Dr. Cliff Deveny, Summa's interim president and CEO who took leadership in March, appears to be steadying the organization.
In a June memo announcing the elimination of 300 positions, half of which were not filled, Deveny had warned employees that Summa faced $60 million in operating losses. Summa had posted gains of more than $30 million the year prior.
However, the end of this year, those losses will actually total $35 million, $25 million less than projected, said Brian Derrick, Summa's chief financial officer.
Summa has earned about $2.5 million in the past three months and expects the final two months of the year, and 2018, to continue the upward trend.
"We're very pleased," Derrick said. "It's taken a lot of hard work by many people and I think its showing in terms of the morale. People are committed to continuing that work and we expect 2018 to be more positive than what we've experienced."
The downgrade will cost the health system about $100,00 per year in additional interest and take from 24-36 months to improve, he said.
Summa's recent uptick in revenue can be attributed to a series of moves Deveny made upon returning to the health system, where he had served in leadership roles for more than 20 years.
Deveny stepped in during a tumultuous time. "The culture had gotten toxic," he said.
His predecessor, Dr. Thomas Malone, abruptly ended Summa Health's contract with emergency physicians on Jan. 1. As a result, Summa ER nurses told the Akron Beacon Journal the physicians who replaced the former group were "out of practice or seem unprepared to lead a fast-paced, regional trauma center." Malone later resigned, garnering a "no-confidence" vote from Summa physicians.
Inpatient and outpatient volumes were already declining because of increased competition in Summit County as Cleveland Clinic expands its reach and physician groups strengthen, Deveny said. What's more, local population is declining and people are getting older and poorer, he said.
As interim CEO, Deveny's first move was to "right the workforce," eliminating administrative and corporate positions, and adding clinicians to the frontline. Employees also have more ownership now, and are more empowered to make decisions and come up with solutions, he said.
At a recent orientation for 62 new employees, the majority were clinicians, with many hailing from local healthcare systems.
"We're trying to be as transparent and realist as possible. We have to own this collectively; we've got to be a team," he said. "We're getting back to basics and not forgetting the person in front of you is the most important person."
Deveny's approach includes extending hours and creating more slots for patients to be seen in Summa's medical groups as well, adding convenience.
"People will choose to go where they are treated well and it's easy," he said. "There is a significant demand for Summa's services but we're weren't making it easy."
Going forward, Deveny plans to seek out ways to increase efficiency.
"Unit-by-unit, we'll take a deep dive to find out what can we do differently, with hours and suppliers and staffing," he said.
The health system also is making good on its capital commitments, completing its $270 million West Tower, and a project to modern the Barberton campus.
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