Future of Wellmont, HealthSouth joint venture uncertain

Rick Wagner • Jul 24, 2008 at 12:00 AM

KINGSPORT — Wellmont Health System and HealthSouth Corp. are not jointly operating a 50-bed rehabilitation hospital in Kingsport, at least not yet.

The two announced last year a joint Wellmont-HealthSouth venture would operate the Kingsport HealthSouth facility adjacent to Wellmont’s Holston Valley Medical Center and a planned new 25-bed rehab hospital in Bristol, Va.

However, Virginia regulators last year turned down the application for a certificate of public need as not warranted by demand, and since then HealthSouth officials have been mum about the status of the joint venture.

Wellmont’s Web site still lists the “Wellmont HealthSouth Inpatient Rehabilitation Facility.”

The letter of intent was filed May 1, 2007, but the Health Planning Agency of Southwest Virginia on July 21 of that year recommended denial following a July 11 public hearing in Bristol where officials with Mountain States Health Alliance voiced opposition.

The local agency board voted 5-4 for denial on Aug. 1, and the state agency recommended denial on Aug. 19. On Sept. 7, HealthSouth requested a continuance and eventually appealed to the commissioner of health, who in a letter dated Dec. 18 turned down the appeal. Shortly after that action, a HealthSouth official said she did not know if the denial would affect the joint operation planned for Kingsport.

Asked July 12 of this year about the plans for the joint venture, immediate past Wellmont Board Chairman Lee Shillitto said Wellmont and HealthSouth would continue to work closely together.

He referred further questions to HealthSouth officials, but media spokeswoman Kelly Taylor, contacted July 13 and again Monday, has provided no answer to the question about the fate of the joint venture.

“We still have a great relationship with the HealthSouth people,” Shillitto said. “We will continue to have that relationship.”

Interim Wellmont Chief Executive Officer Mike Snow said he had no insight on the future of the proposed venture, although he recently worked at HCA.

“I was at HealthSouth at the time all that came down, and we were pretty excited” about a “strategic relationship,” Snow said Monday. “I’d be surprised if that has changed.”

HealthSouth’s Web site does not mention Wellmont in conjunction with the Kingsport rehabilitation facility at 113 Cassell Drive.

Snow, who has had a 28-year health care career, in 2004 became chief operating officer of HealthSouth Corp.

In 2007 he became president and chief executive officer of Surgical Care Affiliates, which had been HealthSouth’s surgical services division. He made a planned departure from that position early this year and moved into a full-time board role with that organization.

Snow took over the position formerly held by Dr. Richard Salluzzo, who took a job heading a health care system in Cape Cod, Mass. Snow will serve as Wellmont CEO until a permanent replacement is found.

Roger Mowen, a retired Eastman Chemical Co. executive, started a two-year term as Wellmont board chairman on July 1.

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