UPDATE: $16M assisted living facility planned for North Side site

Nathan Baker • Apr 23, 2014 at 9:24 PM

Regional health care system Mountain States Health Alliance announced two new partnerships Wednesday with national providers that company leaders said will add to its services already offered to the area’s aging population.

Through a signed contract with Alabama-based HealthSouth Corp., the company will take over management of the 26 rehabilitation beds in the MSHA-owned Quillen Rehabilitation Hospital and will add at least 10 beds to the facility.

At a called press conference to unveil the agreements, Mountain States CEO Alan Levine said the health system’s existing employees will be allowed to stay at the facility, which will retain the name of the long-serving Tennessee representative.

The second agreement, a letter of intent with assisted living and nursing home services company Signature HealthCARE, will bring new activity to the years vacant North Side Hospital site, although the existing building will be demolished.

Signature will take over the operation of 34 beds at Quillen from MSHA, Levine said, and the two plan to construct a $16M facility on the North Side site with 47 skilled nursing beds and 60 assisted living beds.

Levine said the new 70,000-square-foot care center will bring 100 jobs to Johnson City upon its completion, expected in approximately two years.

The rehabilitation and assisted living services will also have the added benefits of allowing the area’s aging population to stay at home longer and keep health care costs low, he added.

“A lot of people talk about the runaway cost of Medicaid as why don’t want to see its expansion, when the reality is, most of the drivers for the growth and cost of Medicaid for the state and federal governments is not acute side, it’s the cost of long-term care,” Levine said. “States all over the country are struggling under the weight of the growth in these costs, and what they’re trying to do is focus on moving patients away from institutional long-term care and toward independent living in community-based homes where they can maintain independence, and frankly, it’s much less expensive.”

For comparison, the MSHA CEO said a patient receiving nursing facility care costs Medicaid approximately $50,000 each year, while a patient receiving community-based care costs $10,000.

“It doesn’t take much math to figure out that there’s a better, lower-cost way to provide patients the dignity and care of a community-based setting,” he said. “That’s the investment that we’re making today for our region’s senior citizens.”

By coming under the management of HealthSouth, the Quillen Rehabilitation Hospital joins 103 other facilities managed by the health care company, including HealthSouth Rehabilitation Hospital in Kingsport and The Rehabilitation Hospital of Southwest Virginia in Bristol.

Vice President of Development Andy Ward said the partnership was an easy one to make for the large company.

“It made sense for us to partner with Alan and his team and the team there at Quillen,” Ward said. “We have a focus on the region as a whole, and we’re thrilled to be part of the Mountain States Health Alliance team here in Johnson City.”

In 2013, HealthSouth oversaw the operations of more than 6,500 beds nationwide and earned $2.2 billion in net revenue, a 5 percent increase over the previous year.

Signature is also using the partnership with MSHA to grow its established presence in the area, adding to its facilities in Elizabethton, Mountain City, Rogersville and Greeneville.

In Elizabethton and Rogersville, the company also offers its Silver Angels program, a non-medical in-home care service.

Steve Fleming, the company’s Vice President of Skilled Nursing Acquisitions, said a market assessment of the surrounding area showed an expected continued growth of the senior population in the coming years and a need for additional assisted living beds.

The remaining area of the former North Side Hospital land after the current plans are carried out could leave additional room for growth, as well, he said.

“We’re utilizing about six acres for this project, and there are 22 acres out there,” he said. “So we’ll be looking at opportunities to partner with other complementary businesses to complete the continuum.”

The additional ventures are still subject to regulatory approval, including the issuance of a certificate of need for some of the additional beds.

MSHA hopes for approval for the plans with HealthSouth by the fall and the new nursing facility within two years.

Follow Nathan Baker on Twitter @JCPressBaker. Like him on Facebook: www.facebook.com/jcpressbaker.


Mountain States Health Alliance officials announced two key partnerships Wednesday morning designed to expand and enhance rehabilitation and skilled nursing services for the Tri-Cities area.

Mountain States has entered into a definitive agreement with HealthSouth Corporation to create a joint venture partnership that will expand services at Quillen Rehabilitation Hospital.

Quillen currently operates 26 inpatient rehabilitation beds, and HealthSouth intends to add at least 10 beds to better serve the needs of the local community. The facility will continue to be known as Quillen Rehabilitation Hospital.

Separately, Mountain States officials have also signed a letter of intent with Signature HealthCARE to develop an assisted living community and skilled nursing facility on the campus of the old North Side Hospital on Princeton Road. The old hospital will be demolished, and a new patient- and family-friendly care community will be constructed in its place. The new facility is expected to have 47 skilled nursing beds and 60 assisted living beds in all.

“After an illness, people want to get back to what they love to do,” said Alan Levine, Mountain States president and CEO. “Our mission is to help them regain their independence and be as active as they can be. We’re excited about these new partnerships because we believe they will enhance the great work our people are already doing.”

The redevelopment and construction component of the new agreements is expected to be a plus for the Johnson City business community.

“Economic growth is important to all businesses, and we hope that this investment will help spark growth and development in the surrounding area,” said Levine.

Washington County Economic Development Council members expressed their support of the new partnerships on Wednesday.

“Mountain States Health Alliance has always been a strong contributor to the economy of our region, and now with the addition of resources from HealthSouth and Signature HealthCARE will enhance that economic contribution even more,” said Mitch Miller, president and CEO of the Washington County Economic Development Council. “The expansion of services at Quillen Rehabilitation Hospital and redevelopment of the old North Side property represent not only health care and construction jobs for our area, but also the potential for growth in other business sectors with the increased activity that two prominent medical facilities will provide in that portion of Johnson City.”

HealthSouth and Signature are both already part of the Tri-Cities community. HealthSouth operates two other inpatient rehabilitation hospitals in the area: HealthSouth Rehabilitation Hospital in Kingsport, Tenn. and The Rehabilitation Hospital of Southwest Virginia in Bristol, Va. Signature operates Signature HealthCARE of Greeneville, Pine Ridge Care & Rehabilitation Center in Elizabethton, Mountain City Care & Rehabilitation Center, and Signature HealthCARE of Rogersville.

Press reporter Nathan Baker attended the press conference this morning. Keep checking JohnsonCityPress.com for more details of this developing story.

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