Hospital merger: Group finalizes “grading” recommendations


Screen Shot 2016-05-31 at 2.52.58 PMBy Jeff Keeling

Clear messages to the area’s hospital systems coalesced as a group charged with recommending measures for Tennessee to “grade” any merged system completed its work: Don’t just maintain the current level of health care access for rural patients – enhance it. Be transparent with your data, and be part of a health information exchange that is accessible, affordable and open to all other providers and practitioners. Use some of the cost savings from efficiencies to improve nurses’ pay and recruit and retain specialists. Lower the cost of care. Provide a level playing field for independent clinicians and practices.

In Blountville, the 16-member “COPA Index Advisory Group” met May 24 and finalized its index recommendations to the Tennessee Department of Health (TDH). By then, members had spent about 10 hours in public “listening sessions” accepting comments on what measures should be included. They had put in another 15-20 hours devising specific measures surrounding access to care, population health, economics and “other.”

The group was charged with its task by the Tennessee law that enables a “Certificate of Public Advantage” (COPA) to govern hospital mergers that reduce competition, and appointed by Commissioner of Health Dr. John Dreyzehner. Chaired by Sullivan County Health Department Director Gary Mayes, it included representatives from government, health care, public health, business, health insurance and education.

Its work is part of the TDH effort to devise rules, expectations, measures and a regulatory structure that ensure citizens will gain more than they lose if hospital systems merge and that merger significantly reduces competition. TDH is navigating uncharted waters following Wellmont Health System and Mountain States Health Alliance’s Feb. 16 application for approval to merge. The process has been deliberative, complex and laborious so far, and the application has yet to be “deemed complete” in either state, making any final decision on the merger request unlikely to occur before late 2016 at the earliest.

Rules governing Tennessee’s COPA law require, “active state supervision to protect the public interest and to assure the reduction in competition of health care and related services continues to be outweighed by clear and convincing evidence of the likely benefits of the Cooperative Agreement…”

Those requirements, in turn, stem from the law allowing the mergers, which aims to provide “state action immunity” from federal antitrust involvement. The primary “prongs” of that immunity are an expressed state policy to displace competition with regulation, and “active state supervision.”

The COPA Index Advisory group held a hearing in Blountville Tuesday night. The public was allowed to comment, but the proposed measures were not subject to change. A public hearing on the merger itself is set for Tuesday in Blountville (see box).

During their meetings, COPA index group members exchanged ideas about the best wording and measures for the topics they had determined as top priorities. Dreyzehner’s office will take their recommendations under consideration and develop a final set of measures.

After considering between nine and 16 topics in each category and voting on each, some top priorities that emerged included:

• Rural access to primary, urgent care and emergency care must be maintained or increased

• Open networks for practitioners who agree to “fair market reimbursement,” regardless of affiliation or relationship to the hospital system

• Wellness efforts including prevention, physical activity, lifestyle changes, screenings and nutrition

• Reducing obesity in all populations

• Cost of care provided by a new system should be contained as measured by an up-to-date benchmark for a comparable market area as established by the state (this differs significantly from the systems’ cost containment suggestion offered in the COPA application)

• Employment/contracting with physicians by the new system shouldn’t exceed 30 percent of the total physician population in the geographic service area

• Part of  margins derived from efficiencies should go toward increasing pay for system-employed nurses, who earn significantly less than counterparts in nearby markets

• A new system should use a Health Information Exchange that is also accessible and affordable to all providers, and which the system will use to share data as permitted by law

• Independent satisfaction surveys should be conducted annually with employees, patients, physicians and payors and included in the results in the annual report.


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