The Last Word: Dr. John’s COPA time blues


By Jeff Keeling

Dr. John Dreyzehner’s role in the Mountain States Health Alliance-Wellmont Health System merger application process emerged front and center Jan. 13. Someday, history will judge the Tennessee Department of Health (TDH) commissioner’s involvement. I hope when that day comes, Dreyzehner won’t have just cause to channel another Dr. John (musician “Dr. John” Rebennack) and say, “I been in the right place, but it must have been the wrong time.

It is probably safe to assume some jaws dropped when TDH issued a terse statement at the anticipated conclusion of its 120-day Certificate of Public Advantage (COPA) review process. The systems’ request for a COPA, and a dispensation to consummate a competition-reducing merger to be regulated under the aegis of TDH, was on hold. Not only that, it was on hold at the request of the systems, who had been understandably eager to move from theory (with its accompanying attorney fees) to practice.

Many had wondered what took so long (seven months) for TDH to deem the merger “complete” and start the 120-day decision clock. Suddenly, the systems were telling the public they had “received notice today that their request for additional time to supplement their application” was granted. No one in the public or media knew such a request had been made. Previous statements from the health systems suggested they were highly confident in the completeness of their case for a COPA. Now the systems wanted to “supplement their application.”

Dreyzehner’s office, meanwhile, called the proposal unprecedented “across the country” due to the proposed market’s size in both population and area, and the fact it spreads across two states. “The Tennessee Department of Health takes its role in this process very seriously on behalf of Tennesseans,” the TDH statement read.

Perhaps it is worthwhile to peel back the layers of the onion here.

First, consider the systems’ request. It is highly likely that Dreyzehner’s office warned the systems TDH would either deny the application, or would approve it with grave misgivings. As TDH would play a major role in its ultimate success or failure, it likely wants a couple of things from the merger, if it occurs:

  A COPA and accompanying cooperative agreement that prove, by clear and convincing evidence, that benefits outweighing the disadvantages caused by lessened competition will exist at the outset of the merger, and that there is a high likelihood the COPA will stand up to the court challenge likely to occur should it be approved.

  A regulatory structure with a realistic chance of ensuring, on a real-time, ongoing basis, that the merger’s benefits to people outweigh any disadvantages created by less competition. In short, that a merged system under the COPA can deliver better prices, better access and better outcomes, and keep doing so, even in the face of constant change in the healthcare industry. As Dr. Subramaniam Ramanarayanan put it in a November 2015 webinar addressing COPAs and antitrust, “a well-designed COPA ought to be dynamic, and allow for the introduction and adoption of innovations.”

These are high bars. Perhaps Dreyzehner has reached a state of “paralysis by analysis,” and simply can’t bring himself to step over the precipice despite adequate evidence. If he has the next 180 days will surely reveal it.

My sense is that 11 months — the period since the systems filed their initial COPA application — isn’t long when it comes to such a weighty matter. Even more so, the first 120 days available to really dig into back-and-forth details with MSHA and Wellmont leaders in order to build the best possible regulatory structure probably seemed to pass in the blink of an eye.

The COPA law places a great deal of pressure and responsibility on TDH. That law rests within the framework of legal and practical understanding about competition’s benefits to consumers. The decision whether to immunize a large merged hospital system from antitrust scrutiny ought to be undertaken in as apolitical an environment as possible. I believe Dreyzehner and his team want to make the right determination about the COPA application and are availing themselves of the proper resources and tools to make that determination.

The natives are restless up here, though, and that’s where we circle back around to the other Dr. John. I believe Dreyzehner has “been in the right place,” but the temptation may exist to politicize this process, whether through pressure on Dreyzehner or through some sort of end run that cuts TDH out of the process.

Such a decision would produce a weaker COPA, one more likely to be overturned in a court challenge and less likely to maximally benefit the region’s consumers. Not only would it allow Dreyzehner to someday lament (preferably having donned some New Orleanian-style garb for full effect), “it must have been the wrong time”: it would, quite simply, be wrong. Better to trust the process and let the chips fall where they may.

Jeff Keeling is vice president of communications for Appalachian Community Federal Credit Union and former associate editor of the Business Journal.

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