Laughlin, Mountain States complete merger
Photo above: Alan Levine of Mountain States and Chuck Whitfield of Laughlin at the November merger announcement (file photo)
By Scott Roberson
Laughlin Memorial Hospital and Mountain States Health Alliance officially joined Mountain States Health Alliance June 30, completing a merger that had been announced last November. “This historic step will help preserve and strengthen Laughlin Memorial Hospital,” said Chuck Whitfield, CEO of Laughlin. “We are excited to expand upon our decades-long relationship with Mountain States by becoming an integrated part of the system. This will allow us to not only protect access for our community but also to expand services in areas where they are needed.”
The merger marks the end of an era in health care in the region. Laughlin was the last independent hospital operating in Northeast Tennessee. “It was a matter of community pride along with employee pride in our hospital that we were independent,” Whitfield said. “It resulted in all decisions being made locally and could be implemented, at least we felt like, much quicker than if we had been part of a bigger system. So we could maintain that independence as long as financially we were sound enough to do that. But as time has gone on it has become too big of a challenge.”
That challenge is not unique to Laughlin. Mounting financial, demographic and regulatory pressures have led to the closing of more than 70 rural hospitals since 2010. “It is a reimbursement challenge that has been driven by the decreased volume of patients,” Whitfield said. “In the last year or so we have seen a 13 percent decline in inpatients and about a 2 percent decline in outpatients. When you couple those declines with a decrease in reimbursements, while at the same time our expenses are going up 5 and 6 percent, it’s just not a sustainable model.”
That having been said, the Mountain States plan for Laughlin’s future operations includes a commitment to increase the investment in the hospital, not cut it. As part of the definitive agreement, Mountain States has committed to making a minimum of $28 million worth of capital investments in Laughlin over the next five years.
“Laughlin is a beautiful hospital,” said Marvin Eichorn, Mountain States executive vice president and chief operating officer. “It is phenomenally well-maintained. It has a beautiful medical office building. They have done a fantastic job in terms of investing in technology and things you want to have for patients in terms of diagnostics, surgical equipment and that sort of thing. So a good bit of this $28 million is going to insure we keep that up.”
The rest, Eichorn said, will be invested in potential expansion of services. “We have typically done a lot in communities we have been fortunate enough to work with is working closely with medical staff and bringing in new physicians, hopefully in some cases, physicians who will bring additional capabilities as an added service to the community. We have talked with Chuck a lot about physician recruitment. Along with that, for most doctors, especially surgeons, there are things you have to do in terms of new equipment in order to ensure they have the technology they need to provide that additional service. We’ll be working to identify all this in the next zero to six months to make sure we continue to have capital to keep things well-maintained plus new services and new technologies.”
Laughlin became the 14th hospital in the Mountain States system. Until such time as the states of Tennessee and Virginia complete their assessment of the proposed merger between Mountain States and Wellmont Health System, Laughlin employees will see little in the way of change as a direct result of their own merger with Mountain States.
Whitfield said he was pleased Mountain States is holding off on changes to employee badges, benefits and other details until the Wellmont matter is resolved, so that Laughlin’s people don’t potentially have to deal with two transitions in a short time-span. “We believe this strategy will be the smoothest and most cost effective for everyone.”
That common sense mindset was just one of the reasons Laughlin chose to merge with Mountain States after talking with three other hospital chains, Whitfield said. “It always came back to Mountain States for a number of reasons: our long-standing relationship, proximity, reputation and culture. It all just fit for our hospital.”