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Until merger closes, Mountain States, Wellmont cautious about sharing competitive information

Zach Vance • Nov 7, 2017 at 9:58 PM

Although the hospital merger between Mountain States Health Alliance and Wellmont Health System has been approved in Tennessee and Virginia, the transaction still isn’t officially closed.

Until the deal is closed, Mountain States and Wellmont leaders are being extremely cautious about sharing competitive and sensitive material between the two organizations.

In a Monday memo, addressed to executive managers from both health systems, Mountain States CEO Alan Levine said an 11-member transition team will be working on immediate priorities for closing the merger and integrating the systems.

“If you are requested to assist in the transition by any member of the transition team, you should assume the request is sanctioned by us, irrespective of which system you work for,” Levine wrote.

During the transition period, Mountain States and Wellmont leaders have created a policy to ensure only necessary sensitive information is shared.

“If there is competitively sensitive information you are requested to provide, please follow this policy. Since both states have approved our merger, our counsel has advised us that we are now operating under state immunity from federal anti-trust rules,” Levine wrote. “That being said, we remain committed to ensuring only necessary competitive information is shared, and it is done so in a controlled manner so as to limit its exposure until such time as we have closed the transaction.”

Any time employees from either organization want to request or disclose sensitive information to their counterparts, those requests have to be channeled through their organization’s general counsel, and in some cases the president.

If it’s determined that information might impact competition, only the “minimum amount necessary” is to be shared with the “minimum number of employees within the receiving company.”

When it comes to sharing information related to payer contracts, pricing, employee compensation or strategic plan, even more strenuous guidelines are enacted.

“The party receiving the information regarding these areas will identify one person within its company who is qualified to make business decisions in these areas and exclude her/him from access to this information,” the policy states.

If the merger takes longer than expected or fails to close, the person who did not receive the information will be “available” to make the receiving party’s competitive decisions.

The planning team members who accessed the information will have a “cooling off” period where they will refrain from decision-making on matters related to the information they received until that information has become “stale, or is no longer remembered or relevant.”

If either health care system can’t identify a decision-making person to exclude, the information won’t be disclosed until such a person can be identified or an alternative option is agreed upon.

The transition team is led by Mountain States Chief Operating Officer Marvin Eichorn. Other members include Tony Keck, Lynn Krutak, Todd Norris, Allison Rogers, Todd Dougan, Eric Deaton, Bo Wilkes, Dr. Morris Seligman, Lisa Smithgall and Melanie Stanton.

In a memo to that transition team, Levine laid out a list of expectations. The last one stated “We will not permit Mountain States or Wellmont to creep into our culture ... we will be Ballad Health!”

“Wellmont and Mountain States are great organizations, and we should cherish what each system built. But WE MUST MOVE FORWARD. With every decision we make, it will be natural for people to assume one system or another has the upper hand, or one system benefits from a decision while the other does not,” the memo read. “We can’t avoid this, and it will happen. I believe, however, that if we conduct ourselves in a certain way, we can minimize the effect of this, because the foundations of our decisions will be beyond reproach. Each decision must be based on what is best for Ballad Health and what is best for our region.”

The merger is expected to close sometime in early 2018.

Email Zach Vance at zvance@johnsoncitypress.com. Follow Zach Vance on Twitter at @ZachVanceJCP. Like him on Facebook at Facebook.com/ZachVanceJCP.

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