By Jeff Keeling
With the shock of Wellmont Health System CEO Denny DeNarvaez’s Sept. 10 resignation ebbing, an effort to convince Wellmont’s board of directors to change course strategically and study a merger with Mountain States Health Alliance continues.
With Wellmont nearing the end of a strategic process it expected to end in a merger announcement, DeNarvaez abruptly resigned last week after four years at the helm. Wellmont, whose flagship hospitals are Kingsport’s Holston Valley Medical Center and Bristol Regional Medical Center, began a strategic review of its options in January and announced in late July it had narrowed a list of potential partners to three.
The resignation came just a few weeks after the public kickoff, at an Aug. 18 forum in Kingsport, of an effort to influence Wellmont’s strategy. The effort’s organizers – led by area banking executive Bill Greene but representing a broad cross-section of business and political leaders – called for more transparency in Wellmont’s process.
They also urged its board to consider a merger with Mountain States that would also include bringing in East Tennessee State University’s health sciences programs to form an academic health care system – one that would essentially equal New York’s Presbyterian system as the third-largest academic/hospital system in the country. Such a deal would be contingent on the parties gaining a “certificate of public advantage,” or COPA, that would provide stringent state oversight of cost and pricing structures to mitigate concerns over lack of competition.
The “hole-in-the-wall gang,” as Greene describes the group, has said it fears devastating long-term consequences should either of the two regional systems cede local governance to an outside system.
After initially announcing it wouldn’t appoint an interim CEO, Wellmont changed course Monday, tapping former Bristol Regional CEO Bart Hove “to assist us during this important time in Wellmont’s history,” Board Chairman Roger Leonard said in a news release.
At least one local leader who has been calling for more transparency in Wellmont Health System’s search for “an alignment partner” responded positively to DeNarvaez’s departure announcement. Kingsport Mayor Dennis Phillips was among a panel of leaders who spoke at the Aug. 18 forum.
Phillips called the change “a step in the right direction,” and said he hoped Wellmont’s board would now seek to involve the community more than it has in its process.
“As I have said before, I think the CEO was driving the hospital board, and I think that the board is to be commended for stepping up and making some good decisions,” Phillips said
Since Aug. 18, several local governments have passed resolutions “in support of maintaining local control of healthcare systems” (full text is at bjournal.com/localresolution). Among them is the Kingsport Board of Mayor and Aldermen, which passed its resolution in a split vote.
“There are few things more important to this community than what happens to the hospital,” Phillips said. “I think we can continue the progress that Bill Greene’s group has made in the last 60 days, and do the right thing for the community and the employees of Wellmont. Those are the two most important things we need to consider.”
In a Friday interview with News & Neighbor, Greene said the “gang” was continuing on its own to study the potential for a COPA that would include both hospital systems and ETSU. He repeated his contention that “pain is coming” to the local healthcare economy due to health care reform and a long history of what he called “overexpansion” as Wellmont and Mountain States competed, often to the detriment of long-term stability.
Confronting those issues can best be done through a combined system, Greene said, that includes ETSU and is governed by a COPA (see the Tennessee statute at bjournal.com/copalaw). He believes the results would include not just an ability to manage declining revenues and hospital admissions with local control, but a possible increase in research funding to ETSU to help offset likely job losses associated with “rightsizing” the hospital systems’ workforce. Such a scenario might also lead to a healthier population long-term, which could help lower health care utilization in a climate of cost constraint.
“We are a region that has some massive problems health-wise. Obesity, diabetes, I could just go right down the list. If we could bring those research dollars in here, let’s get in front of preventative medicine. Let’s get in front of these issues and deal with them before they become even more of a problem than they already are.”
Greene said the important message his group wants to send right now is that it respects Wellmont’s board and wants to be a resource and an ally.
“We want to be the group that does not micromanage them. They are quality people, they’re all highly educated. Roger Leonard is a terrific guy, Julie Bennett is an attorney that worked for us (Bank of Tennessee) before she went to Bristol Motor Speedway, there’s not a better guy in America than Ted Wood.
“We are not adversaries,” he said. “We’re not enemies. We were somewhat portrayed that way because we didn’t necessarily agree with everything Wellmont’s board was doing.”
The “gang,” whose members include many of the most significant donors to local foundations and charities, hopes to see a system with equal board representation from both current systems, along with robust physician representation and new voices from the community. Beyond that, “We want to suggest to them what we think is best for the region in terms of quality health care and reasonable pricing for the future. That’s our only mission. And then we want to be the ones that raise the money to help them in the foundations.”
Friday, Greene sound more sanguine about the prospects for a local merger than he had in an interview just a couple of weeks earlier: “I feel like the Wellmont board is very talented, very well-educated, very experienced, and they will figure this out and make the right decision.”