Lee County, Va. hospital talks progressing, ‘entangled with merger’


By Jeff Keeling

May could be a critical month for long-running efforts to reopen Lee County, Va.’s hospital, which Wellmont Health System closed in September 2013. Those efforts, a source said, have become “entangled with” the proposed merger between Wellmont and Mountain States Health Alliance.

The source, who is close to the effort by the Lee County Hospital Authority (LCHA) told The Business Journal April 28 that deed restrictions left behind by Wellmont leave the system with a right of first refusal should one of its competitors desire to operate there. That fact has played into delays in the LCHA’s efforts to work out an arrangement with Mountain States.

“Mountain States had been incredibly supportive of working with the Lee County Hospital Authority to figure out what could happen in terms of reopening a critical access hospital there, but all of that got put on hold until they filed their merger application and could begin conversations, because everyone recognizes they are still competitors,” the source said.

The LCHA met April 26, its first meeting since Dec. 4, 2015. That came, the source said, following talks with Mountain States and Wellmont after the systems’ mid-February filing for a cooperative agreement that would allow them to merge and remove the competitive barrier.

“Once the Virginia Cooperative Agreement application was filed, the Authority through its representatives began to actively discuss possibilities with Mountain States,” the source said. “Those discussions are very active right now.”

At its April 26 meeting, the LCHA selected a small committee to continue discussing possibilities with Mountain States. It also directed its counsel to prepare an application for a USDA loan to transfer its current debt obligations to Lee County related to purchase of the hospital from Wellmont.

The Authority also is prepared to complete an application for permission to operate a Critical Access hospital (fewer than 25 beds), but the source said that task could fall to Mountain States should talks with the system work out.

The LCHA meets again May 16, at which time it will decide whether to file the critical access application. It also requested placement on the agenda for the next Southwest Virginia Health Authority (SHVA) board meeting May 25. The SHVA is currently studying the cooperative agreement application, as it is charged with the task of deeming the application “complete” enough, information-wise, to be then approved or denied by the Commonwealth.

The LCHA wanted to address the issue of access, which is one of five areas SHVA committees are considering as they review the application. “The Lee County folks will make a presentation to the Health Authority about the impact of the closure of the hospital,” the source said.

While other potential operators have made overtures to the LCHA, the source said their preference is Mountain States.

Wellmont has a right to step in and operate the facility if the Lee County Hospital Authority identifies a partner that is essentially a competitor of Wellmont. “It’s an uncomfortable fact, but it’s a fact,” said the source. “Wellmont will need to waive any arrangement with Mountain States or the Lee County Hospital Authority will need to have a partner that is not in the region.”

Mountain States released the following statement regarding the issue: “Mountain States Health Alliance shares the Lee County Hospital Authority’s desire to ensure residents of Lee County have access to essential health care services. We look forward to continuing to work with the hospital authority as they develop innovative solutions for meeting the county’s health care needs.”

Those needs were related at the April 26 LCHA meeting, the source said.

“During public comment … the commissioners heard firsthand several stories of the critical need for a hospital in the county, including the recent passing of a town employee from a heart attack, with many people suggesting it might have had a different outcome if the hospital had been open.

“No one obviously could say for sure, but it certainly was an added burden to everyone that they had to travel so far. The public has requested that the Hospital Authority convene a meeting to hear stories of the impact of the closing of the hospital, simply to build a record of that impact.”

The closure also caused the elimination of about 140 jobs.


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