Good thing it’s not first and goal for hospital merger


By Jeff Keeling

If you thought – for good or for ill – that Mountain States Health Alliance and Wellmont Health System were looking at a first and goal on the five-yard-line after announcing in April 2015 they would seek approval to merge, you almost certainly weren’t alone.

Proponents of Wellmont opting for a local partner as it sought “strategic options” had begun in August 2014 fighting what seemed very long odds. But by April there they were, leaders of the two systems who for years had engaged in a sometimes bitter rivalry, shaking hands and touting the boundless health and economic benefits the laying down of swords and picking up of plowshares would yield for the region. East Tennessee State University was on board to become a key partner as well and create an academic health juggernaut. The research dollars would flow into the area, allowing useful studies of the chronic problems such as heart disease, diabetes and drug abuse that plague this region as severely as any. There was already a website, and we hoi polloi in the media were treated that very day to complimentary “Becoming Better Together” ballpoint pens.

The systems spent the next 10 months preparing their applications for merger approval to Tennessee and Virginia. By February, one could find much evidence among regional leaders of every stripe, at least publicly, of strong support for the merger. And indeed, as I wrote in this space in April 2015, it was possible the hospital systems’ leaders had, “put their passion, skills and energy into constructing an initial framework for change they believe can, fully implemented, offer the best possibility of improving our people’s health, growing the economy, and protecting consumers.”

In that same column, though, I also wrote that as a journalist, “my role in this matter includes investigating the facts as they are presented or uncovered,” and that our publications’ roles include, “conveying those facts fairly and objectively to the public and holding accountable the leaders who are carrying out this plan.”

What I hoped then, but was unsure of, was that the states and others charged with scrutinizing this proposal would approach their responsibilities with the utmost diligence. If they didn’t – if the many powerful interests arrayed in favor of creating what would amount to a monopoly created a chilling effect on appropriate scrutiny – we all could be the worse for it.

My fears weren’t allayed when the COPA Index Advisory Group held its first public listening session in March. Speakers were asked to comment on specific measures they would like to see included in the measures the Tennessee Department of Health (TDH) will use to grade a merged system, should the merger be approved. One would have expected comments about things like reducing obesity and smoking rates, or protecting consumers through specific pricing regulations and prohibitions against shutting out independent practitioners. Instead, I heard most speakers repeat what we already knew they believed – “merger good, merger good.” It still seemed possible to me that the systems were, indeed, facing a short path to the end zone.

The intervening 10 weeks have disabused me of that notion. As it turns out, the would-be partners’ situation was closer to having recovered a turnover on their own two-yard-line, with the league’s best defense and 98 yards of real estate separating them from their goal. The COPA Index Advisory Group has completed its work and sent the framework for a strong regulatory structure to Nashville. TDH itself has sent two toughly-worded letters to the systems asking for more and clearer information about their merger plans. North of the state line, the Southwest Virginia Health Authority has engaged in similar levels of tough scrutiny.

These are all good signs. Any team that can march 98 yards against a good defense deserves to score. Time will tell whether that is the metaphorical end result in this case, but one hopes that if it isn’t, it will be because it was found that any “clear and convincing evidence of the likely benefits of the (merger)” did not outweigh disadvantages caused by the reduction in competition the merger would create.

That brings me to my final point. Some of the hospital systems’ responses to their challenge have so far left me underwhelmed. For example, the latest TDH “you’ve got work to do” letter said the systems needed to “identify any potential disadvantages that may result from the Cooperative Agreement.” Their application had glossed over that one. And despite TDH’s warning to “avoid conclusory responses,” the systems’ initial response letter, while polite, gave me pause at this point: “… we welcome the opportunity to further elaborate on the ways in which the benefits of our proposed merger significantly exceed the disadvantages, if any.”

It’s the “if any” part that bothers me. Of course there are potential disadvantages. I hope, and expect, the merger applicants have some better stuff in their playbook.


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