Tag Archives: The Ballad Merger

The Ballad Merger V: the Pandemic

Ballad Health nursing promotion

by Carol J. Bova

The nursing shortage was a top issue for Ballad Health from the moment the health system was created in 2018 from a merger of Mountain States Health Alliance and Wellmont Health System. The new health system, which served far Southwest Virginia and neighboring parts of Tennessee, laid out a plan in its first annual report to tackle the burgeoning workforce crisis that was afflicting much of rural and small-town America.

The annual report noted the following initiatives:

  • Putting $10 million annually into increasing nursing wages which affects one-third of [the] work force. The first two classes of the ETSU/Holston Valley accelerated BSN program graduated in May and August, 2018, producing a net gain of 34 additional nurse graduates above previous program capacity.
  • Contracting with Northeast State Community College (NESCC) for admission of 20 additional associate degree nursing students each spring semester starting January, 2019. … This provides an additional 20 new graduate nurses annually above current capacity at NESCC program.”

These measures were clearly stop-gap. First, while the $10 million annual increase to nursing wages might have helped retain nurses, it did nothing to train or recruit new nurses. Second, educating 52 new nurses (only 34 in Virginia) over two years was a positive but only a fraction of the number needed— even assuming they all wound up working for Ballad. Continue reading

Ballad Merger IV: Has Quality Improved?

Ballad Health signage at Lonesome Pine Hospital. Photo credit: WCB

by Carol J. Bova

As a condition of the merger between Mountain States Health Alliance and Wellmont Health System in 2018, the combined entity, Ballad Health System is required to periodically update Virginia regulators on health metrics for its far Southwest Virginia service territory. Those quality measures and actual performance must be accessible to the public on the Ballad website as well.

The reporting was suspended during the COVID-19 emergency before year-to-year comparisons for Fiscal Year 2020 were available. But Ballad did publish an Annual Report for Fiscal Year 2020 that contained partial data through February 2020.

The bottom line: Quality measures have been a mixed bag. Some measures have improved; a few have declined. As detailed in Parts II and III of this series, Ballad met expectations for cost cutting and restructuring. What isn’t clear from the limited data available is why there is “slippage” in some numbers from one year to the next. Important questions arise. Continue reading

The Ballad Merger III: Reshuffling, Reconstruction and Repurposing

Norton Community Hospital

by  Carol J. Bova

When Mountain States Health Alliance and Wellmont Health System merged to create Ballad Health in 2018, the healthcare companies justified the consolidation with the argument that the ability to cut costs and rationalize delivery of health services would yield tangible benefits to patients in Southwest Virginia and Northeastern Tennessee.

The previous article in this series, “Cuts and Consolidations,” detailed how  Ballad Health bolstered finances through shared value-based payment savings, bond refinancing, staff reductions and closures of off-site facilities. This article, Part III, shows how the company acted to lower costs and enhance revenue by consolidating medical services, repurposing hospitals, introducing telemedicine, and implementing a new IT system.

The Virginia Cooperative Agreement, which outlined the requirements of Virginia regulators, allowed repurposing as long as certain “essential services” were retained. Deploying telemedicine and rotating specialty clinics in rural hospitals would help it meet the requirement. Continue reading

The Ballad Merger II: Cuts and Consolidations

by Carol J. Bova

Upon the merger of Mountain States Health Alliance and Wellmont Health System in 2018, the first order of business for the newly created Ballad Health was shoring up its finances. If Ballad wasn’t successful at this, it would not have the resources to invest in the new services, facilities, programs, and equipment to improve community health it had promised as a condition of the merger.

Not all of Ballad’s actions were well-received. Some changes triggered community protests and county objections in its Tennessee and Virginia service territories. But the company did achieve its aim of bolstering cash flow. Here’s how Ballad went about it.

Job cuts. Financial conditions were adverse from the beginning. In an April 16, 2018 letter to the Tennessee Commissioner of Health, ten weeks into the merger, Ballad wrote that “due to the increased cost of labor, pharmaceuticals and supplies, and the continued shift to the outpatient setting from inpatient, operating income of the combined systems has declined by 123% since the same time in the prior year.” Continue reading

The Ballad Merger — A Leap of Faith by Two States

Ballad Health hospital market area in Tennessee and Virginia

by Carol J. Bova

In April, 2015, two Tennessee-based not-for-profit hospital organizations with a 75% market share in Southwest Virginia said a merger would allow them “to address the serious health issues affecting the region and to be among the best in the nation in terms of quality, affordability and patient satisfaction.” The merger  would involve 21 hospitals in 21 counties in two states, and about 960,000 people.

The FTC opposed the merger. The commission said that courts and antitrust agencies view an increase of more than 200 points on a standard measure of market concentration — the Herfindahl-Hirschman Index (HHI) — as likely to be anticompetitive. The new company’s post-merger score would increase 2,441 points.

In the hope that this merged company might solve overwhelming regional health disparities, Virginia and Tennessee ignored the FTC and took a leap of faith. Both states passed legislation to allow cooperative agreements for a merger of the two systems. To confer immunity from federal and state antitrust laws, the legislation provided for state regulation and active supervision to ensure that the benefits would outweigh any disadvantages. Continue reading