The Virginia Department of Health recently concurred with its Tennessee counterpart that Ballad Health is providing a public advantage under the terms of a merger approved by both states.
Virginia issued its annual review of Ballad Health, which follows a Tennessee report issued in April. Ballad was formed in 2018 from the union of Mountain States Health Alliance and Wellmont Health System under the terms of a Certificate of Public Advantage in Tennessee and Cooperative Agreement in Virginia. The merger was permitted so long as the benefits of the merged entity outweighed the lack of competition and each state is responsible for annually reviewing the merger through a number of metrics.
“I find that the benefits of the Cooperative Agreement for the period of FY 2019, and likely to result in the future, continue to outweigh the disadvantages attributable to a reduction in competition resulting from the Cooperative Agreement,” Virginia Health Commissioner Dr. Norman Oliver wrote in the cover letter accompanying his department’s 30-page assessment.
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The report cites a number of improvements made during the past fiscal year, including plans to increase nursing salaries $100 million over 10 years, implement “multiple billing and charging policies to reduce the burden of health cost to the region’s residents,” cost-reducing programs and demonstrated improvement on a majority of quality measures.
“Based on information gleaned from the active supervision process since the merger on January 31, 2018, the majority of quality measures reported to the states have shown improvement, overall access to care has not suffered, and charges remain within what is allowed,” according to the report.
Oliver also cited the financial peril of many small rural hospitals in conjunction with Ballad’s commitment to maintain all existing hospitals for five years and its pledge to reopen Lee County Hospital.
“Ballad has opened an urgent care center in Pennington Gap adjacent to the shuttered Lee County Hospital, which is scheduled to be reopened by Ballad in October 2020 at a cost of approximately $15 million. It is not likely that either Wellmont or Mountain States would have independently chosen to re-open this hospital due to resource constraints that were alleviated by the Cooperative Agreement,” according to the report.
However, the report also calls for greater public participation in the evaluation process.
“Public input is vital to VDH’s active supervision efforts,” the report states. “In an effort to obtain more public input, VDH staff are developing an online comment/complaint form which will be made available on VDH’s website. Information gathered from the public will better inform VDH’s evaluation of the perceived and actual benefits and disadvantages of the Cooperative Agreement as well as highlight opportunities for VDH to improve active supervision efforts.”
Plans also include a new interactive dashboard on the state’s Cooperative Agreement website and periodic town halls to obtain feedback from residents in Ballad’s service area.
The report notes the extraordinary, current conditions that health care providers operate in, but said revised metrics will apply in the future.
“Within 90 days following the expiration or termination of Virginia’s Executive Order 51, declaring a state of emergency in response to the COVID-19 pandemic, Ballad will begin submitting revised metrics to VDH, which will in turn be published in a dashboard to be developed and published on the Cooperative Agreement website,” according to the report.
The report echoes similar findings submitted in a report by Merger Monitor Dennis Barry to the Southwest Virginia Health Authority.
“The harms that can be realized by less competition are reduced access, reduced quality and higher costs to payors, employers and patients. This report addresses each of these issues and concludes that access has not been adversely affected, quality has overall improved and costs to payors and patients have been compliant with ‘Addendum 1’ that both states use to bar the abuse of market power,” Barry wrote. “In addition, Ballad is making investments in behavioral health, population health, rural health and children’s health that it would likely have been unable to fund without the savings realized from the merger.”
The Tennessee Department of Health issued similar findings in its April report.
“It is the Tennessee Department of Health’s determination that the Ballad Health COPA continues to provide a public advantage,” that report states.
It also mentioned the public health pandemic, which was still evolving when the report was released and that certain measurements will be suspended until the public health crisis has passed.
“Ballad Health will need to be able to focus all of its organizational energy on serving the medical needs of the community during this unprecedented time. While TDH’s COPA scoring system is not designed to adapt to unexpected crises, TDH recognizes the need for flexibility at this extraordinary time and intends to make appropriate accommodations with respect to next year’s scoring as Ballad rightly prioritizes its response to COVID-19,” according to the report. “We seek to support Ballad as it responds to the novel coronavirus and provides critical care to the residents of its 21-county region. We appreciate, perhaps at this time more than ever, the important role Ballad Health plays in helping TDH fulfill its mission: to protect, promote and improve the health and prosperity of people in Tennessee.”
Ballad Health Chairman and CEO Alan Levine expressed appreciation for the findings in a written statement.
“Ballad Health is grateful for the hard work the State of Tennessee and Commonwealth of Virginia are doing to help health systems respond to the current pandemic, while at the same time working to ensure the creation of Ballad Health continues achieving the policy goals set by both state legislatures,” Levine said in the statement.