Horizon Blue Cross Blue Shield of New Jersey signed a definite agreement to purchase Summit Health, four people familiar with the agreement told BINJE.
The deal, which is expected to be more valued at more than $1 billion, is still dependent upon regulatory approval, but that could happen by the end of the year.
“Horizon Mutual Holdings regularly reviews opportunities in the marketplace that advance our mission, benefit our members and support our long-term goals. To further those objectives, we have entered into an agreement to acquire Summit Health New Jersey, including the New Jersey CityMD sites, subject to regulatory review. We are excited by the opportunity to preserve access to high quality care for all of Summit Health’s patients, improve healthcare quality and affordability for our members, and to support the continued independence of Summit Health’s physicians and clinicians for the benefit of New Jerseyans.”
Summit Health, a physician group with deep roots in New Jersey, has grown into one of the country’s largest multispecialty medical practices through a network of primary-care, specialty-care and urgent-care locations across the New York City region and in Oregon.
The assumption is that Horizon feels its customers can get great care — at a lower cost — outside of the traditional hospital setting.
For Horizon Blue Cross Blue Shield, the transaction would represent its biggest deal since it was authorized by a 2020 state law to reorganize from a traditional health services corporation into a nonprofit mutual holding company.
The restructuring, which was approved by the N.J. Department of Banking and Insurance, took effect Nov. 1, 2022.
The change gave Horizon greater flexibility to make investments in healthcare businesses, technology companies and provider organizations, something Horizon officials said would allow it to compete more effectively with national insurers and healthcare companies.
In other words, make deals like this one.
Summit Health has changed hands before. The physician practice, started by Jeff LeBenger, was part of the Summit Health-CityMD network that was acquired by VillageMD, backed by Walgreens, in a deal valued at roughly $8.9 billion that was announced in 2022.
The company had been formed three years earlier through the merger of Summit Medical Group and CityMD, a transaction backed by private-equity firm Warburg Pincus
