Power board’s, hospital systems’ major changes rooted in overall trends


By Jeff Keeling

‘Boy, this sounds familiar,’ I thought one recent Monday night as I listened to Johnson City Power Board (JCPB) leaders answer questions from Johnson City commissioners about JCPB’s request to be granted “authority” status.

“We need to be able to adapt to changes in the marketplace.” “The core of our business is threatened by innovations in our industry and changing use patterns by consumers.” “Our current structure prevents us from best pursuing the kinds of changes to our business model that will allow us to thrive and to best serve our electricity customers at the most affordable rates.”

If you had swapped out JCPB’s appointed leader Jeff Dykes with Mountain States Health Alliance (MSHA) CEO Alan Levine and done the same with the JCPB entourage, and if the product were inpatient hospital care instead of electricity, many similar arguments for change would be put forth. In fact they have, as MSHA and Wellmont Health System seek both public support and regulatory permission for a merger.

What gives here?

Take these things in equal parts: an aging, stagnant population; slow job growth; declining hospital inpatient rates; declining rates of electricity use; and sweeping changes nationally in how people consume health care and energy.

Mix them all together and toss in newish, innovative leaders at the organizations that for decades have dominated the delivery of acute health care and electricity to local citizens, and you get the complex new dishes being proposed for our regional consumer menu.

JCPB leaders say as an authority, they’ll be able to enter private-public partnerships, taking full advantage of trends ranging from alternative energy and battery storage to provision of ancillary opportunities such as internet service. They can do these things now, but not nearly as effectively due to an inability to partner with the private sector. Doing them most effectively, they told city commissioners yet again, will allow the authority – without commingling funds between its new endeavors and the standard electricity service, mind you – to somehow help alleviate electricity rate increases despite declining use and all the other changes swirling about.

City commissioners, like the groups charged with deciding whether to approve the MSHA-Wellmont merger, are making haste slowly and asking a lot of questions. Indeed, they should, for as Commissioner Jeff Banyas astutely pointed out, “I have seen too many screw-ups in the last 10 years of doing these things, ‘oh, we’ll work out the details later,’ and the details don’t get worked out, and things that we would not want to have happened, happen.”

Ultimately, though, the JCPB and hospital system requests are part of a broader picture as entities ranging from power provision and health care to education and economic development seek efficiencies and scale in a rapidly changing world. The changes should be carefully vetted, yes, but in the end – provided they’re executed well – they are likely to benefit our region, not harm it.

Certainly, major differences exist between the JCPB request and plan and that of MSHA and Wellmont. The hospital systems have a much more complex road to travel in order to reach their objective, as well they should. They are competing systems asking permission to form a near monopoly. JCPB is in essence a monopoly asking permission to partner outside its core product area so it can diversify its service lines.

The similarities are striking, though. Both organizations provide services that are part of the underpinning of Americans’ comfortable, prosperous way of life. Cheap, reliable electricity and affordable, accessible health care rank up there with good quality transportation, education and safety as fundamentals of a desirable standard of living.

Further, whether it is JCPB’s need for diverse income streams or the hospital systems’ need for efficiencies (and let’s face it, diverse income streams in the form of vertical integration), the underlying causes are similar.

Technology and demography are both changing rapidly worldwide. Businesses and institutions that refuse to adapt, or wait too long to do so, suffer or go under.

The United States, while still home to a dynamic, flexible economy and still the world’s most powerful country, is in the throes of superpower middle age. Our predecessor world powers generally didn’t respond to their imminent declines real gracefully or innovatively, and neither, in many cases, are we.

On top of these issues, we in this region are older, poorer and sicker than many of our fellow Americans in other regions. Despite its good people and natural beauty, in many ways the odds are stacked against this region. Bold leaders are proposing bold plans and willingly undergoing intense scrutiny as they seek approval. I, for one, think their proposals are based in something more substantive than boosting their own egos, but only time will tell.

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