Two of northeast Tennessee's largest hospitals are merging into Wellmont Health System on July 1.
The two hospitals are 383-bed Holston Valley Hospital and Medical Center in Kingsport, Tenn., and 336-bed Bristol (Tenn.) Regional Medical Center, 22 miles east of Kingsport.
Combined, Holston Valley and Bristol Regional will control about 45% of the staffed inpatient beds in the far northeast corner of the state, known as the TriCities area.
The merger will divide the market into three systems, with no unaffiliated hospitals out of the eight operating in the area.
Wellmont's chief competitors are Columbia/HCA Healthcare Corp., which owns four area hospitals representing about 26% of the staffed beds, and 407-bed Johnson City (Tenn.) Medical Center Hospital, which also manages 65-bed Johnson County Hospital in Mountain City, Tenn. The latter two hospitals represent about 29% of the staffed beds in the market.
It was a possible joint venture between Columbia and Johnson City that helped nudge Bristol Regional and Holston Valley into inking a proposed merger agreement last August. Just months earlier Bristol Regional had announced its intentions to remain an independent facility.
A Columbia-Johnson City deal would have given the joint venture partners control of six of the market's eight hospitals and about 55% of its staffed beds. But in January, Columbia and Johnson City ended their joint venture negotiations because of a disagreement over governance issues (Jan. 22, p. 6).
Also in January, Bristol Regional and Holston Valley submitted their required pre-merger notification documents with the Federal Trade Commission. The FTC cleared the deal later without comment or investigation.
On July 1, the hospitals will consummate their full-asset merger. They'll be governed by a 16-member board of trustees with equal representation from both facilities. Eddie George, president and chief executive officer at Bristol Regional, will become the new top executive at the merged hospitals.
According to the latest available data from the Tennessee health department, Bristol Regional lost $11.5 million in 1994 on total net revenues of $111.7 million. Holston Valley earned $7.8 million on total net revenues of $143.4 million in 1994.