Panel makes case for keeping control of Wellmont, Mountain States local
Story and photos by Jeff Keeling
One by one, they ran down the potential benefits of a Wellmont Health System-Mountain States Health Alliance merger and the consequences they believe the Tri-Cities will face should Wellmont instead sell to an out-of-region partner.
A prominent banker, a city mayor, a veteran physician/businessman, a university president and an attorney were the main speakers at Monday evening’s hastily called community forum at the Kingsport Higher Education Center. Their contributions touched on different points, but their message was clearly spoken by banker Bill Greene – the driving force behind a “Save Our Hospitals” movement still less than a week old.
Greene was joined by Kingsport Mayor Dennis Phillips, East Tennessee State University President Brian Noland and Holston Medical Group founder Dr. Jerry Miller, with former Kingsport alderman Ken Maness essentially emceeing. Kingsport attorney Bruce Shine also spoke on the method – receiving a “Certificate of Public Advantage” – by which the local systems could potentially overcome antitrust concerns.
Before an overflow crowd heavy with power players, including Mountain States’ board chairwoman (Wellmont board members were conspicuously absent) Greene said Wellmont’s board must be more transparent about its search for a “strategic partner.” And, he said, it needs to focus that search on the possibility of a merger with Mountain States, which is rumored to be the “regional system” that is among the three Wellmont has said remain in its search.
Wellmont has cited non-disclosure agreements in its refusal to publicly name the remaining candidates, or any of the previous ones. That board, which released a brief statement following Monday’s meeting, hasn’t even confirmed that Mountain States is the regional system left in the running, though Maness spoke as though that were a given.
Saying that competition between Mountain States and Wellmont had helped drive health care costs in the Tri-Cities to the highest in the state, Greene said there was a better path. He called for the systems to merge and give equal board representation to each, creating a 20-hospital system with nearly 3,000 licensed beds and 15,000 employees.
“This is where we live, and this is the hospital combination that I think most of us in this room would like to have,” he said.
Greene, the majority owner of Bank of Tennessee and Carter County Bank, said he “loves” the board members of both hospital systems. But he cited a recent meeting at his home of a “hole in the wall gang” whose members decided it was time to wage a public campaign with Wellmont’s board moving ahead without what they believed was adequate openness.
“We have a desire to have quality health care – everyone in this room does,” Greene said. “We have a desire to have reasonable cost – everyone in this room does.
“But we also have a desire to improve our region, and what’s best for Wellmont might not be best for the region. But what’s best for the region is good for Wellmont.”
For his part, Phillips said it is “imperative” that Wellmont’s board make the right decision.
“It has a tremendous amount to do with our recruitment of business and industry, it has a tremendous amount to do with our retirees, and your input is the only thing that can change the direction this is going,” he told the gathering.
Maness said a Wellmont decision to sell to an outside system would be a so-called “gating” decision, after which some other decisions won’t be possible.
“It would obviously end the prospect for Mountain States and Wellmont to get together, but it would also probably force the other system, in a defensive move, to do the same thing,” Maness said. “After a period of time we might have two systems here, but one perhaps operating out of Charlotte and one out of Atlanta.”
ETSU and Quillen College of Medicine key players in any scenario
When his turn to speak arrived, ETSU’s Noland ran down the contributions the university’s medical, nursing, pharmacy and public health schools make to the region’s health care. Picking up on a theme advanced by Phillips, he referenced ETSU’s growth to a level of sponsored research that exceeds $50 million – much of it owing to the university’s health care juggernaut.
Noland cited important research and clinical work in the fights against obesity, diabetes and prescription drug abuse, three scourges prevalent in the region. And he used that work as a springboard for his main message – that partnerships are essential to successful ventures in Northeast Tennessee and Southwest Virginia.
“Partnerships also produced the Gatton College of Pharmacy,” Noland said. “More than a decade ago this region came together, Wellmont, Mountain States, everyone in this room, and said ‘we’re going to establish a college of pharmacy at East Tennessee State University.’”
Noland warned that the Quillen College of Medicine is in danger of losing 50 residency slots over the next few years “because of the competition between the systems.” And it is residents, he said, who tend to put down roots and ultimately stay in the area to practice medicine.
In an indirect reference to Wellmont’s process, Noland said ETSU “exists to serve the people of this region.
“There are decisions that we can make that would be within the best interests of ETSU. There are decisions that we can make that would be in the best interest of our faculty, staff and students. But that’s not our mission. Our mission is to serve the people of this region, and we do it through our health care system, we do it through our access (to health care) mission, and we do it through our partners.”
The competition question
Before Shine detailed the legal questions surrounding a potential merger that would create an apparent monopoly, Miller spoke on the cost and complexity of the current health care system before making his case against competition. With competition rife between Wellmont and Mountain States, locals are left with “the most expensive for health plans and for patients of anywhere … in Tennessee.”
When systems are competing not on quality of care but on facilities and services, Miller said, competition “is a malignancy on health care.”
That may be so, Bruce Shine said, but even if Wellmont and Mountain States chose to pursue a merger, it would have to get past the Tennessee Attorney General. Shine said certificates of public advantage have been granted to the Mission hospital system in Asheville, N.C. and to Wake Forest Baptist hospital system.
Shine told News and Neighbor he did not think Tennessee had yet allowed or even considered a COPA of the magnitude being discussed Monday.
“These hospital mergers are exceptions to federal antitrust law, which is allowed by state law, and therefore there is a keen interest to make sure that competition is not decreased,” Shine said. He added, however, that Tennessee’s “Hospital Cooperation Act of 1993” balances likely decreases in competition against other likely gains for the community.
The law, in fact, states that a certificate of public advantage can be issued by the attorney general if it is determined “that the applicants have demonstrated by clear and convincing evidence that the likely benefits resulting from the agreement outweigh any disadvantages attributable to a reduction in competition that may result from the agreement.” (TCA 68-11-1303 [d]).
According to the law, benefits that could outweigh decreased competition include: enhancement of the quality of hospital and hospital-related care; preservation of hospital facilities in geographic proximity to the communities traditionally served by those facilities; gains in the cost-efficiency of services provided by the hospitals involved; improvements in the utilization of hospital resources and equipment; and avoidance of duplication of hospital resources. (TCA 68-11-1303  (A-E)
Shine said the process could be completed fairly quickly and allows for significant public input. He added that in his experience, Wellmont as the prospective seller is probably the entity calling for non-disclosure agreements, he believed those confidentiality clauses could probably be changed rather easily and to the benefit of transparency in Wellmont’s process.
When all was said and done Monday, it was again Greene speaking, and reiterating one of his earlier points – that it is far-fetched to think an outside owner would actually let the area retain significant local governance over the former Wellmont hospitals.
“Whoever absorbs their $600 million in debt will be 100 percent in charge of them,” he said. “Just don’t think of it any other way. Anything they say to you about caveats, I can assure you there’s a trigger mechanism that whoever buys them – whether it’s in Winston-Salem, Charlotte, Nashville, Louisville, Roanoke or Norfolk – the new purchaser will be 100 percent in charge, just get over it.”
Greene concluded by reminding the gathering that Wellmont’s board could elect to sell to an outside entity at any time and that would be that, and urging those in attendance to sign a petition pushing the open consideration of a local merger.
“Once this genie is out of the bottle, you will never put it back in the bottle.”