By Jeff Keeling
The main architect of an effort to persuade Wellmont Health System to consider a merger with Mountain States Health Alliance wasn’t very optimistic about that effort’s odds of success late last week.
Bill Greene discusses the metro area’s hospital systems. (Photo by Adam Campbell)
“We’re not winning,” banker Bill Greene said Friday from his office at Carter County Bank in Elizabethton, in which, along with Bank of Tennessee, he holds majority ownership. “Right now it’s 75-25; we’re the 25.”
Greene referred to Wellmont’s consultant-led search for a “strategic partner,” launched in January, which the hospital system announced July 30 it had narrowed to three finalists. That list includes a “regional system” that Greene said Friday is Mountain States, whose flagship hospital is Johnson City Medical Center. Wellmont operates Holston Valley Medical Center in Kingsport and Bristol Regional Medical Center, along with four other hospitals including two in Southwest Virginia.
Friday, Greene said Wellmont’s July 30 announcement came roughly three weeks after he personally approached Wellmont CEO Denny DeNarvaez, and later Board Chairman Roger Leonard – about what he considered a lack of transparency in Wellmont’s search process. He said he asked them to meet with him and a group of around a dozen leaders from throughout the Tri-Cities he has dubbed the “hole-in-the-wall gang” to discuss their process.
“They’ve never answered us that they would be able to do that,” Greene said.
Several weeks after the July 30 announcement – convinced that Wellmont’s board was not yet willing to sincerely pursue the Mountain States option – Greene and Co. debuted the saveyourhospitals.com website. On Aug. 13, two days after Wellmont rolled out a community input website regarding the strategic process (forwardwithvision.org), the Kingsport Chamber of Commerce announced a community forum – affiliated with Greene’s group – would be held Aug. 18 at Kingsport’s Higher Education Center to discuss the future of the community’s health care.
During that forum, a handful of speakers outlined their desires. They included more transparency from Wellmont, which sent no board members to the event, a sit-down with those leaders, and a good faith effort to work toward a merger that could also include East Tennessee State University’s powerful health sciences division. ETSU President Brian Noland was among the speakers.
The results, the speakers said, could include:
- Greater efficiencies in the four-state Wellmont/Mountain States market, with resultant lower costs to consumers;
- Retention of local governance over health care decisions;
- A greater chance for ETSU to make its mark in medical research and maintain residency slots, with accompanying economic benefits.
The consequences of sale to an outside entity, they added, could be dire: loss of local control, a consequent weakening of Mountain States, and negative effects on ETSU’s medical, pharmacy and nursing schools.
Greene remained characteristically feisty Friday, and confident in his group’s arguments for its case, if not so much in the likelihood that Wellmont’s board would be swayed by the group, or a corresponding petition drive. He elaborated on the type of agreement – a “certificate of public advantage,” or COPA – that could he believes could get a Wellmont-Mountain States merger past regulators. He reiterated what he sees as the likely consequences of Wellmont merging with an outside system.
And he maintained his bemusement about the refusal thus far of Wellmont’s leadership to meet with the hole-in-the-wall gang.
“Wouldn’t you think the first thing you’d want to do if you’ve got the caliber of people I just named, and the community in a groundswell saying, ‘hey Wellmont, let’s talk, this is important to us, this is an economic engine, this is our health care future’ – wouldn’t you think the board would say ‘you got a point. Let’s sit down and talk.’
“Haven’t done that. I’m waiting for the call.”
That said, Greene isn’t giving up the fight – and he is at least hopeful that Wellmont’s board will become more transparent, and that perhaps things could move positively from there. He also isn’t shy about what he believes could tip the balance in favor of local merger talks – Eastman Chemical Co. speaking out, something he said it hasn’t yet done.
“Eastman Chemical Company is in Kingsport and Kingsport does what Eastman Chemical wants. End of volume, end of game… When Eastman goes stealth, you can assume they’re siding with Wellmont who’s stealth. Consequently, if Eastman’s not willing to come out of its corner and discuss this openly, then you can assume they’re in the same mode Wellmont’s in.”
What about competition?
The word monopoly naturally springs to mind when talk of a Wellmont-Mountain States merger surfaces. Greene said Tennessee’s largely untried COPA law deals with that. If such a merger were regulated, and the potential benefits outweighed the anti-competitive elements, it could gain approval.
Not only that, Greene said, he believes that despite the lack of a COPA law in Virginia, the merger could get a federal dispensation.
“The feds can step in and say, there’s no health care answer southwest of Roanoke, therefore this meets the needs of the public. If the community can demonstrate they would like this, we’re satisfied we can get the approval in Southwest Virginia. We cross a state line with a 20-hospital footprint. It’s massive scale, but we think we can get approval.”
(You can read the Tennessee COPA statute at jcnewsandneighbor.com/tennesseecopalaw).
Further, Greene said he believes ETSU’s health sciences division could be part of the mix. Such a partnership, combined with a redirecting of dollars saved through efficiencies, could potentially create new jobs and economic growth through what Greene believes could be a doubling of the current $50 million in sponsored research at ETSU.
“It should be a three-legged stool. Then you can enlarge the medical school, you can have more residency slots, higher sub-specialty and specialty training, and we can possibly get millions in additional research dollars.”
Greene would recommend a board of directors with equal representation from Wellmont and Mountain States, adequate physician representation and community members not already involved in the hospital board fraternity – which he suggests is rather chummy.
“Once we get the hospitals together, once we get the med school up going and blowing, and once we get the residency slots, it’s all about governance.”
Either way, “there will be pain”
One reason those residency slots have been at risk is the years-long duplication of services – what Greene called an “arms race” – by the competing systems. Gaining the efficiencies that can then be plowed into research, residency slots and more affordable care won’t be accomplished without short-term pain, Greene said. Unnecessary duplication remains.
Even if a larger outside system merges with Wellmont – and scale has been one reason mentioned by Wellmont’s leadership for the search process – Greene expects cuts.
“It’s going to knock you in the creek either way,” he said. “Wouldn’t you rather that we decide locally how to create efficiencies? Both systems have a shrinking volume of patients. You’ve got all these extra beds, and if you’re together, it stands to reason you can locally control the number of beds better than someone from Charlotte who owns half of them (were Wellmont to sell or merge).”
“We have a better chance of controlling that extra expense, and if it’s not controlled locally, in this region small business starts paying price.”
Despite his blunt approach, Greene insists his group doesn’t desire an adversarial relationship with Wellmont’s leadership.
“I’m trying to smoke the Wellmont board out of their stealth attitude to say, ‘we would like to have an open dialogue with the owners, and we would like to have an open dialogue with the hole in the wall group because they are the major players. What is wrong with that?”
