Summa buyout isn’t healthy
I am deeply troubled by the prospective buyout of Summa Health by the private equity firm HATCo. Despite Summa CEO Cliff Deveny’s assurances that this is different from other private equity sales, I believe that it is subject to the same motivation as other private equity takeovers and we can expect to see similar outcomes.
Private equity firms are established to use the reduced reporting and transparency requirements relative to publicly traded firms in order to extract a significantly higher rate of return to investors. We can use the recent private equity buyouts of nursing homes as an example.
Private equity firms offer a substantial purchase price and promise substantial further investments in the organization. How do they do this? They saddle the organization with a high level of debt.
Summa already has a higher level of debt than is comfortable; it will get much worse. Next, it will sell off real estate and make the capital-deficient business pay a substantial rent.
This will separate much of the capital assets of the organization from the operating company. Then employees will be laid off to reduce expenses, which will make it harder for a hospital to offer quality care. Attempts will be made to reduce employee costs, which will make it difficult to recruit and retain staff.
The switch from nonprofit status to for-profit status will prevent medical professionals from accessing student loan forgiveness, which will also cause an exodus of staff and make recruitment difficult.
We have two major adult hospital systems in the five-county area centered on Akron with Summa Health being about twice the size of Cleveland Clinic Akron General. This will leave us in a lurch about how to get good medical care when Summa is left as a largely dysfunctional shell.
As far as I know, private equity takeovers are largely irreversible. Have you ever heard of a private-equity-owned company returning to its former status as a nonprofit? Given the huge footprint of Summa Health, it is not realistic to expect a competitor to arise that will offer the medical care now offered by Summa. That would leave the Akron area without a credible path toward regaining adequate quality care for our citizens.
We know that Summa Health has some problems. It has already taken on too much debt to enable it to plot a secure financial future. We know that the management of Summa has been less than optimal. Witness the emergency department fiasco of a few years ago.
Clearly a substantial change in the organization of Summa is needed, but a private equity buyout will only make things worse and irreversibly so.
David Perry, Akron
Dim view of FirstEnergy
I am not persuaded by FirstEnergy Corp.’s declaration that it has “taken significant steps to move forward, including reconstituting our senior leadership team and instilling a culture of ethics, integrity, and accountability at every level.”
Its recent history reveals that FirstEnergy is a rat’s nest of corruption, pollution and theft from Ohioans. The Akron company admitted in 2021 to bribing former PUCO chair Sam Randazzo and former House Speaker Larry Householder with over $65 million to continue to operate two money-losing, coal-fired power plants, to eliminate Ohio’s clean-energy standards and to allow the utility to charge customers unnecessarily high rates.
FirstEnergy makes a shallow pass at owning up to its crimes. It is charged with 27 felony counts and faces lawsuits from stockholders. The company agreed to pay $230 million, but that was in exchange for deferred prosecution. It continues to hide information from what it claims was its own internal investigation, and it made no disclosures requested by shareholders in their lawsuit against FirstEnergy. So much for accountability.
As for its pollution and continued contribution to global warming, FirstEnergy made a pretense of pledging to cut its greenhouse gas emissions by 30% and then reneged just three years later, because it wants to continue to operate those coal-burning plants. So much for integrity.
And as for its fleecing of Ohio customers, FirstEnergy not only continued to collect unwarranted higher rates for electricity, it continued to push for $1.4 billion in even higher rates.
We can only see the tip of the iceberg in the indictment of two former FirstEnergy executives. What corruption lies beneath remains shielded from the public eye.
What is still blatant is the continued pollution and the fleecing of customers. House Bill 6 has not been repealed. Our clean-energy standards have not been restored. No improvement in ethics law has been passed. Ohioans are still paying to support two aging, costly, polluting plants.
Oh, yeah, and former CEO Chuck Jones is still drawing a pension from FirstEnergy.
Denise C. Woods, Bath Township
President Biden should retire
The Beacon Journal published an article Feb. 12 in which several people are quoted suggesting that special counsel Robert Hur was “out of line” for some of his comments in his report about the current president’s handling of classified material that had been in his possession.
I’ll let the argument about its appropriateness reside with the legal experts and other pundits.
However, the bigger issue is if President Joe Biden is capable of handling arguably the most important elected position in the world.
When I was in the military and in my civilian job, there were times when folks had to make a decision for their own good and the good of the organization if it was time to leave or retire. Try as they might, they could no longer meet the physical requirements. Snap decisions they used to make quickly and accurately became harder to make. It became obvious that it was time to go.
I don’t think we need Hur’s report to see that President Biden may have reached that point in his long career that for his own good and for that of the country, it is time for him to retire.
Robert E. Williams II, Akron
Alexia Navalny a true patriot
If one wants to see a real patriot, look no further than Russian opposition leader Alexia Navalny.
The whole world is worse off because of Navalny’s passing. I can only hope that all he stood for and what he tried to accomplish will not be in vain.
A true patriot is not someone who tries to overthrow an election or storm a capitol building because of lies and deceit.
Mike Basile, Akron
