Critical days, public input opportunities ahead for merger proposal


By Jeff Keeling

When it comes to state oversight and regulation, what doesn’t kill the proposed merger between Mountain States Health Alliance and Wellmont Health System should only serve to make it stronger. For your sake, for mine, and ultimately for the hospital systems’ as well, that regulation needs to be active and detailed.

It’s getting real, quickly, for the two rival systems who announced nearly a year ago what some had considered unthinkable: they want to merge, creating a more resilient system in the financially difficult era of health care reform, and reduce massive and wasteful duplication of services.

In Virginia, a regional authority that met last week is trying to determine whether the nearly 3,000-page application for a “cooperative agreement” has sufficient information for the state’s Department of Health to rule on it. The Southwest Virginia Health Authority met last Tuesday, and members formed into work groups to peruse the application and see how it does addressing population health, health care cost, health care access, health care quality, and competition.

The competition work group will include everyone on the 32-member board who doesn’t have a conflict of interest – though with the systems’ large presence in the region, it appears around 11 members may remove themselves from decision-making on the merger question.

“That’s one of the most important aspects of the whole cooperative agreement,” Virginia Delegate Terry Kilgore, the Authority’s chairman and author of the law that enabled a cooperative agreement, told fellow board members of the competition question. Indeed, not one but two representatives from the Federal Trade Commission were patched into the Virginia meeting by phone.

The Virginia board hopes to complete its work in time to vote on the application’s completeness by its April 13 meeting. An affirmative vote would usher in a public comment period, while the Commonwealth’s Department of Health would begin the process of judging whether to approve a merger. The department’s main question? Whether the benefits the merger can bring outweigh the risks posed by a reduction in competition.

The systems point to a massive plan to improve population health and create economic growth through medical research using expected cash flow – nearly a half-billion dollars worth over a decade – produced from reduced duplication. Mental health and substance abuse, children’s health and chronic conditions such as heart disease and diabetes are targeted for investment.

The supersystem can do all that, Wellmont and MSHA leaders say, and limit its charges to consumers thanks to the synergies, all while an adequately competitive marketplace is maintained, particularly in the growing outpatient segment.

It sounds great, because it would be great. The region’s population health is woeful. Substance abuse, chronic health conditions, physical inactivity and a host of other negatives impact our quality of life and our potential for prosperity. I believe years of intense competition between Wellmont and MSHA have created waste and inefficiency. Those are among the reasons I advocated for the systems making an attempt to merge while the prospect still seemed unlikely in late 2014.

But the huge, powerful entity such a merger would create absolutely must have strong external restraints.

That’s why the work of the Southwest Virginia Health Authority, and by a Tennessee regional board helping develop benchmarks to measure how well a merged system is doing at meeting its population health goals, is so important. So, too, are the rules the states’ departments of health are finalizing that aim to create a regulatory structure that will provide checks and balances and, one hopes, help ensure any merged system produces better results than what exists now – in terms of both health care access and outcomes, and cost.

Blacksburg, Va. attorney Jeff Mitchell is helping the Southwest Virginia group in its daunting task. He told them last week the work groups should direct any questions about the application to him sooner rather than later.

“My anticipation is that there will be some questions … just from some initial conversations,” Mitchell said. “I think that’s probably healthy. So don’t shy away if you think there’s something that can be more defined. Remember, your standard at the end of the day is, ‘do the benefits outweigh the disadvantages?’” At this stage in the game, you’re simply asking yourself whether or not you think you have enough information to later make that assessment.”

Decisions being made between now and late summer or early fall will impact this region’s next 25 years as much as anything else I can think of. I encourage you to follow the process, attend meetings if you can, and make comments in writing or online. Learn more about meeting schedules and how to comment at


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