Photo above: Mountain States President and CEO Alan Levine, left, and Laughlin President and CEO Chuck Whitfield share a handshake before their Nov. 1 press conference.
By Scott Robertson
In the space of 24 hours last month, the two hospitals serving Greene County, Tenn., greatly strengthened their ties to the two health systems that have long managed the rest of the hospitals in Northeast Tennessee. On Nov. 1, Laughlin Memorial Hospital announced its board had authorized the signing of a letter of intent to merge with Mountain States Health Alliance. The next day, Wellmont Health System issued a press release saying its board had voted to move forward with a transaction that would make Wellmont the sole owner of Takoma Regional Hospital.
Mountain States and Wellmont are currently seeking regulatory approval to merge with each other into one system, with the proposed brand name Ballad Health. Both systems said the Greene County mergers would have no negative impact on the proposed Mountain States-Wellmont merger.
Laughlin – Mountain States
Dominick Jackson, chairman of the board of trustees for Laughlin, said of the facility’s merger with Mountain States, “We made this decision thoughtfully and with great care. Despite our best efforts, our revenue has increased less than 1 percent over the last five years, while expenses have risen between 2 and 5 percent each year. During the same time period, inpatient volumes have declined by approximately 400 patients per year. Outpatient volumes have also decreased. It’s not because we’ve done a poor job. To the contrary, it’s because our quality is so good and our patient satisfaction has remained high that our volumes haven’t deteriorated even moreso.
“With the future of Laughlin and our neighbors in mind, our community-led board considered a variety of partnerships for our hospital, including those with larger health systems and hospital companies outside our region,” Jackson said. “Ultimately we determined Mountain States is the right partner for Laughlin.”
Several details of the planned partnership were announced, including:
• Laughlin will maintain a local board of trustees, which will have the responsibility of ensuring high-quality care and good stewardship of the hospital, similar to the boards of other Mountain States hospitals;
• Laughlin’s leadership team will remain in place;
• Laughlin’s employees will join the Mountain States team, gaining access to Mountain States’ benefits and opportunities for professional development;
• Mountain States will make capital investments based on assessed needs to enhance services and to continue the excellent stewardship of the hospital’s fixed assets; and
• Mountain States is not buying Laughlin, and no money is changing hands. Instead, Laughlin is merging into Mountain States, and Mountain States will assume any future liabilities or benefits related to Laughlin.
“We have always had a terrific relationship with the leadership of Laughlin, and we were honored when they approached us to explore this partnership,” said Alan Levine, president and CEO of Mountain States. “Laughlin believes in Mountain States’ vision for the future, and they want to be a part of it. And Mountain States believes in Laughlin. Together, we can both be stronger.”
Laughlin and Mountain States are now in a period of due diligence that is expected to lead to the signing of the definitive agreement by early 2017.
Takoma – Wellmont
Wellmont has already been doing due diligence on the plan to become sole owner of Takoma Regional Hospital. The system has a long history of association with the facility. Wellmont and Adventist Health System jointly owned Takoma from 2007 through 2014, when they agreed that AHS should be Takoma’s sole owner. A provision in the 2014 agreement, however, left the door open for Adventist to offer Wellmont sole ownership. The two systems began work on that transaction in 2015, but Wellmont has been deliberate in its side of the deal.
“This important evaluation took some time, but it is essential for everyone to understand we never doubted Takoma Regional’s importance to the community or its ability to significantly contribute to Greeneville’s quality of life,” Hove said. “We have consistently been impressed with Takoma Regional’s success, its faith-based legacy of care and the skill and dedication of its staff and physicians. The good work at Takoma will accelerate once we are working together as part of one organization.”
Hove said Wellmont is committed to retaining Takoma Regional’s leaders, associates and physicians and looks forward to building on the many awards the hospital has received.