The Federal Trade Commission on Tuesday heard several experts sound off on their concerns about the newly formed Ballad Health and the regulatory framework that permitted the merger to form the health system.
The FTC publicly opposed the 2018 merger to form Ballad. It hosted a workshop in Washington, D.C., to examine the impact of states' certificates of public advantage on healthcare price, quality, access and innovation. One session focused specifically on Ballad, whose 10-year COPA was approved in January 2018 and the merger finalized the following month.
States put COPAs in place to allow health system mergers to elude scrutiny from federal antitrust regulators. The deal between Wellmont Health System and Mountain States Health Alliance to form Ballad brought together two systems serving 1.2 million residents in Northeast Tennessee and Southwest Virginia.
State regulators are actively supervising Ballad to ensure it meets the conditions set forth in the COPA. Since Ballad's COPA has only been in place for 16 months, it's too early to say what impact it's had on the region it serves, said Janet Kleinfelter, deputy attorney general in the Tennessee Office of Attorney General's public interest division.
"I think the real test of how effective this COPA is going to be is probably not going to be until years 3, 4 or 5, until we see the effects of those processes, how effectively they have been implemented and, 'Are they producing the results that we're hoping they will produce?'" she said.
The FTC received dozens of comments before Tuesday's event from people in Ballad's coverage area. The comments said the merger has negatively affected patient care. People expressed concern about the planned closure of the Holston Valley Medical Center's neonatal intensive care unit and the decision to downgrade the Kingsport, Tenn., hospital from a Level 1 to a Level 3 trauma center.
Daniel Pohlgeers, the owner of Sunesis Medical Consulting, said about 40 speakers gave "very negative" testimony about how medical care has changed since Ballad was formed during a recent listening session on the COPA. In addition to fear about the trauma level downgrade and the NICU closing, people discussed nursing shortages in hospitals and long waits in emergency departments. Pohlgeers said people complained about waiting in emergency departments not because of a lack of beds, but because of a lack of providers.
Ballad CEO Alan Levine said in an interview state regulators heavily vetted and approved the NICU closure and trauma program change when the COPA was greenlighted. Ballad has two Level 1 trauma centers and a Level 2 trauma center within 20 minutes of one another, he said. With respect to the NICU change, it's better for those high-acuity patients to be treated in hospitals that see higher volumes of those cases with better outcomes.
John Syer, Jr., Anthem Blue Cross and Blue Shield in Virginia's vice president of Eastern region networks, said there is just one emergency department physician group his company does not contract with: the one that treats Ballad patients. The merger between Wellmont and Mountain States creates an area covering 14,000 square miles with no alternatives, he said.
"Consumer choice, which is so important, that really doesn't exist in this geography," he said.
But Levine denies the merger caused that problem.
"The issue of out-of-network billing, if it was because of Ballad, we wouldn't be debating it in front of the U.S. Senate right now," he said.
Dr. Scott Fowler, the CEO of Holston Medical Group in Kingsport, said the merger has brought "widespread confusion" and he believes it will fragment care between hospital-based and non-hospital-based providers.
"At this point, it looks as if the risks of the COPA outweigh the benefits," he said.
Anthem's Syer said he's also concerned Ballad is increasingly funneling medical services like lab tests and imaging into its hospitals, rather than in cheaper, outpatient settings.
Erin Fuse Brown, an associate professor of healthcare law at Georgia State University's College of Law, said it's imperative to study Ballad's COPA, generating loud applause from the audience.
Richard Cowart, an attorney representing Ballad at the workshop, lashed out at that assertion, pointing out that the health system's COPA has only been in place for about 15 months.
"A federal government study of this is bordering on irresponsible, frankly," he said.
Levine, however, said it's never bad for anyone to understand what Ballad is doing. He reminded that both Virginia and Tennessee's legislatures approved the policy, as did their respective state officials.
"We're really pleased with the progress we've made so far," he said
