logo



Hospital Merger: Ballad Health obligated to spend $8 million on health initiatives in 2018

Zach Vance • Apr 2, 2018 at 6:05 PM

The Tri-Cities' two largest hospital systems, Wellmont Health System and Mountain States Health Alliance, are now history.

Ballad Health—the product of Mountain States and Wellmont merging together — has emerged as the region's only in-patient health care provider, and the sole controller of approximately two-thirds of the Tri-Cities' in-patient health services.

Citing "unique factors in the region," Mountain States and Wellmont officials worked relentlessly to prove to state officials that the benefits of their proposed merger outweighed the harm a hospital monopoly might inflict due to a lack of competition.

Finally, after four years of back and forth, Virginia and Tennessee officials granted Ballad Health a waiver that effectively protects the conglomerate from federal antitrust litigation.

"It doesn't exist anywhere across the country," former Wellmont CEO Bart Hove said at the time. "Nowhere across the country has there been as significant of a COPA application with the amount of commitments that we're putting together and putting on the table with this application."

In exchange for the protection, Ballad Health offered unprecedented spending commitments, totaling $308 million over 10 years, on initiatives related to expanding access to health care services, health research, graduate medical education, improving population health and a region-wide health information exchange.

During 2018, patients can expect Ballad to spend $8 million in total related to the commitments, including: $1 million for behavioral health services; $1 million on children's services; $1 million on rural health services; $3 million on research and medical education; $1 million on population health improvements; and $1 million on region-wide information exchange.

Those spending commitments will gradually increase to $17 million in 2019; $28.75 million in 2020; $33.75 million in 2021 and $36.75 million for the remaining six years.

To ensure those spending commitments are fulfilled and that Ballad abides by all its agreed-upon terms, the Tennessee Department of Health will dispatch a Certificate of Public Advantage compliance officer to work within the health care system.

Additionally, Ballad Health Executive Chairman Alan Levine said a COPA complaint hotline will be established, allowing patients and employees to make anonymous complaints.

A separate COPA monitor will be the investigative arm outside the health system, who will continually monitor the public advantage of Ballad Health and its compliance to the terms of certification.

"There's a COPA monitor, who at that person's discretion, can choose to come any time they want and review what we're doing," Levine said.

However, Tennessee Department of Health Commissioner Dr. John Dreyzehner will make the final call on any findings and recommendations.

Dreyzehner is also responsible for appointing an eight-to-10 member local advisory council, which will be responsible for facilitating input from local stakeholders and patients, make recommendations on how population health initiative funds should be spent and host an annual public hearing to gather local feedback.

If noncompliance is determined, the Department of Health can issue fines ranging from $10,000 to $1 million for breaching terms and commitments, with some of the most severe violations related to incremental spending commitments, employee benefits, hospital repurposing, uninsured discounts and charity care.

Ultimately, it will also be left to Dreyzehner’s discretion to determine whether the public advantage of the hospital merger still outweighs the need for competition.

If he ever determines the public advantage no longer exists, maybe Mountain States and Wellmont won’t be history after all. Part of the merger’s terms included a detailed “Plan of Separation” that describes how Mountain States and Wellmont would untangle themselves from Ballad Health should the need arise.  

Recommended for You

    Johnson City Press Videos