Summa Health cut 300 jobs and moved HQ to flip a $33M loss into a $43M swing

Akron, Ohio-based Summa Health lost $33 million in operating income in the first half of 2017. Interim CEO Cliff Deveny, who had been in the role since the prior year, told Crain's Cleveland Business there was no single cause and no single fix: the system needed to lower costs and improve access across the board.

Summa cut about 300 mostly administrative positions, dropped underperforming services, consolidated units and reviewed its capital needs. It also relocated to a new headquarters, a move expected to save $1.5 million annually, and expanded patient access hours.

By the first half of 2018, the changes had turned the loss into a profit. Operating income reached close to $9.6 million, more than $2.1 million above what the system had budgeted, while net patient service revenue came in nearly $10 million ahead of expectations.

Operating income of $9.6 million in H1 2018 versus a $33 million loss a year earlier, $2.1 million over budget.

Lower reimbursements and a shift toward outpatient care were squeezing inpatient-dependent revenue, forcing hospitals broadly to adapt or keep losing money.

Cutting administrative headcount and consolidating units removed overhead without touching frontline clinical capacity, which the system kept hiring for.

Moving headquarters was a concrete, recurring savings line ($1.5 million a year) rather than a one-time cut.

A system-wide cost reset — cutting overhead roles, consolidating services and moving into cheaper real estate — can flip a hospital's finances within a year without one single fix.

Since the layoffs, Summa Health hired back about 1,000 people, mainly on the clinical side, according to Crain's Cleveland Business reporting cited in the piece. The system also matched an $11 million rise in salary and wage expenses with roughly equivalent cuts to outside contracts and professional fees.