The Tennessee Department of Health’s decision to approve the Wellmont Health System-Mountain States Health Alliance merger got an overwhelming thumbs-up on Tuesday.
The department gave the go-ahead to the Certificate of Public Advantage (COPA) that would oversee their merger and let the hospital systems become Ballad Health.
“I think it’s a good thing,” said state Rep. Bud Hulsey, R-Kingsport. “Both of these hospital systems want this. I think when they looked down the road at Obamacare … they’re not understanding whether the Republicans are going to be able to fix it or not. I think they are looking at the best way to survive Obamacare, and this was the way they chose to do it.”
Said Kingsport Mayor John Clark: “We are very excited about the pending merger agreement between Wellmont Health System and Mountain States Health Alliance. The combined system, Ballad Health, will address the most pressing health needs in our region. Providing continued excellent health care for all greater Kingsport residents is a top priority for our city. We look forward to the completion of the merger agreement over the next two weeks. We are grateful for the all the hard work and support of many people during the past two years. Go Ballad Health!”
Both hospital systems, in their initial application filed with both Tennessee and Virginia, acknowledged the merger would eliminate competition between them “in certain areas.” They sold the merger as the benefits outweighing loss of competition. They have pledged to invest $450 million in improving population health, mental health, research and establishing a health record system.
“Because of the unique regional situation of these two systems, this merger makes great sense for the people of Northeast Tennessee and Southwest Virginia. I am confident the combination of MSHA and Wellmont will result in better and more efficient care for the region,” said Tennessee Hospital Association President and CEO Craig Becker.
Eastman spokeswoman Amanda Allman, in an email, said: “Eastman supports the decision to unify the systems in an effort to improve both the quality of and access to health care in the region. We believe a merger, combined with a focus of improving the cost structure, quality of services, and population health, will result in an integrated delivery system that has the ability to provide world-class care to our community.”
The two systems also cited reduced reimbursement for services and services moving from an inpatient to outpatient setting.
“I think this is good for stabilizing health care costs,” state Sen. Jon Lundberg, R-Bristol, said of the merger decision. “You have had two systems battling each other for a long time. Usually in business, competition lowers cost. Frankly, in this case, it has not. … Knoxville has one Level One Trauma Center. Chattanooga has one. Memphis has one. Nashville has one. We have two, and it’s extraordinarily expensive to maintain it.”
As well as lawmakers, the business community also got behind the merger.
“It has been well over two years since the Kingsport Chamber Board of Directors voted unanimously to support the merger of Mountain States Health Alliance and Wellmont Health System, so we are pleased with today's announcement that the state of Tennessee has approved the systems' COPA,” said Kingsport Chamber President and CEO Miles Burdine. “The process was lengthy, but it was necessary to ensure that the merger was in the best interest of our region and its citizens. Those who were involved, who led, who remained focused on receiving a ‘yes’ are to be commended for their ‘never give up’ attitude. We are optimistic this merger will be enormously beneficial to the business community and residents of our community and region.
“From a community and business perspective, having a locally managed, unified health system where all decisions are made here is a critical point. The leaders of this new entity live here, they work here, their families are here and, indeed, their futures are here. … This is an important and exciting day for our Kingsport community and region. Onward Ballad Health.”
Staff Writer Matthew Lane contributed to this report.