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Update: Unicoi hospital officially becomes part of MSHA

November 1st, 2013 10:31 am by Brad Hicks

Update: Unicoi hospital officially becomes part of MSHA

Unicoi County Memorial Hospital

ERWIN — Of the independent hospitals that have went on to become part of the Mountain States Health Alliance system, the process to acquire Unicoi County Memorial Hospital took the longest amount of time, MSHA President/CEO Dennis Vonderfecht said. 

But, as UCMH and MSHA officials gathered Friday morning in the boardroom of Unicoi County’s community hospital to sign documentation to officially make UCMH the 14th hospital in the MSHA family of hospitals, Vonderfecht said the effort was worth it. 

“I think, again, it shows persistence pays off and it was the right thing to do and, ultimately, if it’s the right thing to do, it’s going to happen,” Vonderfecht said. 

On Wednesday, the Tennessee Attorney General issued a letter of no action to UMCH and MSHA officials, which granted the two parties permission to proceed with the transaction. Legal documentation to finalize the transaction was completed Friday morning. 

“This is the day we’ve been looking for for the last 15 months,” UCMH Board of Control Chairman Roland Bailey said. “You can’t imagine the stress, the strain, the agony and the effort that this board has put forth in order to get us here today.”

Bailey described Friday as a “historical day,” as it marked the first time UCMH has had a new owner since it admitted its first patient in February 1953. He also said this is a “thrilling” point in the hospital’s timeline as it is now assured a future. 

“It has another 60 years to 100 years under the leadership of Mountain States Health Alliance,” he said. “It’s just so exciting to even think about that. And it’s such a happy occasion. It may be raining and the wind blowing outside, but boy, the sun is shining in here.”

In July 2012, two months after the UCMH board received an $800,000 loan from the town of Erwin to keep Unicoi County’s financially struggling community hospital afloat, the board reached out to MSHA and Wellmont Health System to see what each would offer in acquiring UCMH.

This would eventually lead to the UCMH board accepting MSHA’s acquisition proposal and approving its final definitive agreement. However, UCMH’s sale to MSHA was delayed in June when the attorney general’s office, which had to review the sale process, announced it had three concerns regarding the transaction process. 

After UCMH officials worked to address these concerns, documentation was submitted to the attorney general that initiated a second review. This review concluded with the Wednesday announcement the office would take no action regarding the pending transaction. 

“Even though it was very frustrating at times going through this 15-month process for all of us, I think along the way we gained greater support,” Vonderfecht said. “I’d say if there’s anything positive that came out of it is the fact that, by the time we got through this process, we had 100 percent support from the board of directors of (UCMH), we had 100 percent support from the town of Erwin mayor and board of aldermen and also 100 percent support from the County Commission.”

A new logo for UCMH that includes the MSHA name was also unveiled outside the hospital Friday. Tracy Byers, who was selected by MSHA in August to serve as UCMH administrator, said the significance of the acquisition is UCMH will now have access to the resources and services that MSHA can provide, and that the larger health care entity will immediately be able to assist in day-to-day operations of UCMH. 

“I’ve only been here two months but, obviously, I think, the hospital was at the point where they had to do something,” Byers said. “I think it’s getting near impossible for an independent hospital to survive in 2013 going forward with all the changes in health care reform, so I think they made a very wise decision in finding someone larger to partner with. And I’m glad this was finally able to take place because our employees have been very patient, our board has been very patient. We just want to serve the people of this community and, I think, Mountain States gives us a great opportunity to do that.”

Vonderfecht, who said MSHA’s acquisition of UCMH cements a longstanding relationship between the two entities, said funds have been set aside to address immediate capital needs at UCMH, such as information technology upgrades and building repairs. But the facility will not receive a complete makeover, as construction on a new UCMH should begin in two years, Vonderfecht said. 

He said in a little more than four years, the new hospital, which is to be located off the Jackson Love Highway Exit of Interstate 26, should be ready to open. The strategic planning process to determine the size of the new hospital and scope of services to be offered there is set to get under way within the coming months, and Vonderfecht said the community will be involved in the process to design the new facility and identify its services. 

Byers said MSHA officials intend to file paperwork next year to get construction of the new hospital approved.  

MSHA’s acquisition of UCMH has been a divisive issue in Unicoi County. Rallies in support of Wellmont were held during the sale process, and signs supporting the Kingsport-based health care entity still litter parts of the Unicoi County landscape. Vonderfecht said he wants to assure those who were unsure of a MSHA acquisition that MSHA was the better choice for UCMH. 

“I think the main thing we can say is we’ve got a demonstrated track record at every hospital that has affiliated with Mountain States in terms of following through on our promises, and we’ve got a lot of promises we’ve made here,” Vonderfecht said. “I think you can go into any community where we have a hospital and talk with the board members, the community leaders, the leadership and team members of those hospitals, we’ve followed through and we’ve added services and new facilities and are greatly supported by the community.”

Bailey also said there is “no question” UCMH’s sale to MSHA was best for the hospital, adding that he has no doubt the organization will achieve its goals in Unicoi County. 

“It’s just historical that this hospital will be here for the future,” Bailey said. “That’s what’s important to this community and this county and the citizens in the surrounding area, that we maintain this crown jewel of Unicoi County for the future.”

A previous version of the story below

The following is a news release issued by Mountain States Health Alliance:

ERWIN – Unicoi County Memorial Hospital has officially joined Mountain States Health Alliance, hospital officials announced Friday.

The Tennessee Attorney General’s office sent a letter of no action to UCMH and MSHA attorneys on Wednesday, giving the two parties permission to proceed with the transaction. Legal documentation of the sale is now complete, and UCMH is the 14th hospital to join MSHA.

“We have a lot to celebrate today,” said Tracy Byers, the hospital’s administrator. “Our team members have waited a long time for the resolution of this sale, and we are excited that we can now move forward with building our hospital up to be the best it can be.”

Now that the hospital is part of MSHA, the health system can begin making critical investments in the facility, like information technology upgrades and necessary repairs to the hospital building. Plans for construction of the new facility will also begin to move forward.

“We have made some important promises to the people of Unicoi County with respect to their hospital,” said Dennis Vonderfecht, president and CEO of MSHA. “Now it is time for us to fulfill those promises. We are so grateful for the support we’ve seen from the community and the relationships we’ve built throughout this acquisition process, and we’re excited about what the future holds for Unicoi County Memorial Hospital.”

The strategic planning process will begin immediately to paint a clear picture of the role the hospital will play in the community at large. The strategic plan will help shape plans for the replacement facility as well as plans for continuing operation of the nursing home.

 “We will be meeting with key stakeholders in the community over the next several months to get their input on what they want to see from their local hospital,” said Allison Rogers, MSHA’s vice president of strategic planning. “We have already conducted the community health needs assessment, which tells us what the area of focus need to be in terms of creating a healthier community. Now it’s time to find out how the hospital itself can help meet those needs. We will also conduct a detailed financial analysis to develop a strategy for assuring the hospital’s continued stability in the era of healthcare reform.”

The strategic planning process is expected to take several months. Architect selection for the new facility will take place in late 2014, with construction expected to begin in 2015. The replacement hospital is expected to open in 2017 at its new location on Temple Hill Road off Exit 40 in Erwin. To view the UCMH community health needs assessment, visit

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