Ballad Health at odds with community over controversial changes

Part 1 of a four part series examining how competing truths over consolidation impact a health system and its community.

KINGSPORT, TENN.—On a weekday morning in Kingsport, shoppers mill about a small farmer’s market, stepping over puddles of fresh rainwater, carefully examining ears of corn and plump bell peppers.

The mood is jovial—vendors gab with regulars over the hum of a food truck selling coffee and doughnuts. But when shoppers in this quiet Appalachian city four hours east of Nashville are asked their opinions of the region’s newly merged health system, Ballad Health, their sunny faces crumple into scowls, almost as if recoiling from an insult.

“Their concern is a dollar bill and the patient be damned. That’s how I see it,” said Charles Chance, a retired nurse anesthetist who lives in Kingsport and sells stuffed bears and wooden toy trains at the farmer’s market. 

Walking between produce booths, Kingsport resident Crandell Craft, who said he's had two major heart surgeries, casually recalled visiting his local emergency department for heart arrhythmia at 4:30 one afternoon and not being seen until 9:30 the following morning. Ballad refutes that claim.

Deb Reynolds, a Red Cross volunteer and retired chemical engineer, said she’s concerned about the medical providers she’s seen move away.

“I’m watching our specialists leave the area,” she said. “We’ve got so many homes for sale.”

Since the merger to form Ballad became official in February 2018, the health system, which has $2 billion in annual revenue, has swiftly rolled out changes to consolidate high-level services into Ballad’s Johnson City hospital a half-hour south. That’s meant stripping the Kingsport hospital of its neonatal intensive care unit and downgrading its trauma center. Ballad’s CEO, Alan Levine, said competition between the two legacy systems led to an irrational, inappropriate duplication of services in the region that were expensive to run. He also said patient care will be safer once it's centralized in Johnson City. 

Ballad's not alone in making sweeping changes to its services. Health systems across the country are similarly trying to find different ways to contain costs and improve quality of care. And they are doing so with varying degrees of success. 

At worst, many are alienating their communities in these consolidation moves. The Mayo Clinic faced an uproar from residents after announcing plans in 2017 to pull intensive care, inpatient surgeries and childbirth services from its hospital in Albert Lea, Minn. Executives from the Rochester, Minn.-based not-for-profit health system have since acknowledged that they could have done a better job of explaining the decision to staff and the community. 

To many across Ballad’s coverage area, this feels different. Ballad, with 2,424 acute licensed beds, is the only hospital provider covering a mostly rural, 21-county region hit hard by the coal industry’s decline. It was formed through a rare, controversial maneuver that—with green lights from regulators and lawmakers in Tennessee and Virginia—provided antitrust immunity from a federal lawsuit. The Federal Trade Commission opposed the merger and two organizations tasked with overseeing the process said Ballad failed to communicate properly with community members.

To hear some residents tell it, their local healthcare monopoly is in a near-catastrophic state of dysfunction with the biggest pain points being reduced quality of care, more aggressive collections practices and staff shortages that lead to long waits.

Critics say Ballad is bleeding employees, leading to long waits and unsafe conditions. Ballad officials fervently deny those claims. Under Ballad, patients say bills have gone up and collections have become more aggressive, which Ballad officials also refuted. Ballad filed about 5,700 lawsuits against patients in its first fiscal year as a health system, from July 2018 to June 2019. By comparison, UVA Health System, which was the subject of a recent Kaiser Health News investigation, averages more than 6,000 cases annually.

Mostly though, critics say state lawmakers and regulators who approved the deal to create Ballad failed the community.

Hundreds have packed public meetings and taken to social media to air grievances. The organizer behind a petition to get Ballad to halt service line changes, including the controversial NICU closure and trauma downgrade, claims to have 27,000 paper signatures. Modern Healthcare could not independently verify the purported signature count.

Inside the walls of Ballad’s conference rooms, it’s another story entirely. The refrain from executives is uniform, emphatic denial that significant opposition exists. In fact, the CEO said he saw tweets where meeting organizers were encouraging people from outside of the area to attend a contentious gathering. The spokeswoman questioned whether a main organizer is being paid. The small group of critics that does exist, they say, is misinformed and doesn't understand the complexity of running a health system.

“I don't think we're facing a lot of backlash,” Levine, said in an interview in his office in Johnson City, where Ballad is headquartered. “I think we're facing a very defined backlash in a particular community.”

Lindy White, the CEO of Ballad’s Kingsport market, which includes Holston Valley Medical Center, echoed Levine’s take in a separate interview.

“I think it’s a smaller group that has these concerns,” she said. “While there are signatures on the petition, I think it’s a smaller group that has a difficult time understanding the change and where we’re headed.”

“I just don’t see that much resistance to it,” said Dr. Clay Runnels, Ballad’s chief physician executive.

Ballad’s leaders say the alternative to a merger would likely have been selling to a for-profit chain that would have had free rein to shutter rural hospitals. Ballad’s contract with Tennessee and Virginia, called a certificate of public advantage, or COPA, precludes it from closing hospitals for five years, although it can repurpose them if the same services are provided at another hospital in the county. Ballad leaders already plan to turn one rural Tennessee hospital into a residential substance-use treatment facility and envision potentially going a similar route with another in Virginia.

Ballad says the consolidations are necessary to stay viable in a region where competition had led to an overabundance of services. Executives say the two legacy health systems that formed Ballad, Wellmont Health System and Mountain States Health Alliance, were locked in competition and built up arsenals of high-level services, including two Level 1 trauma centers and two NICUs within a half-hour of one another. Ballad says the money saved consolidating those and other services will fund critical community needs, like opioid use disorder programs, enhanced primary care, graduate medical education and a host of other services. The COPA directs Ballad to invest $308 million of its savings into such programs in its first decade.

Levine is quick to point to a June letter from Washington County’s mayor that says partnering with Ballad has helped it lower employees’ healthcare costs and reduce hospital admissions.

Most people experience healthcare at the micro level and don’t see that bigger picture, said Dr. Matthew Loos, Ballad’s chief academic officer.

“Ballad Health is very focused on attacking the root causes of a lot of health issues in the region, particularly the opioid crisis, access to care, behavioral health,” he said. “We’re operating at this regional level and dealing with a lot of macro-environmental factors. Unfortunately, that’s not the way patients and, many times, providers in the community experience healthcare. They experience it in the micro.”

The kind of clinical consolidation Ballad is undertaking is typically the last thing merged health systems touch because it triggers a “three-front war,” said Steve Messinger, president of ECG Management Consultants. The public is outraged over the loss of services, medical providers worry they will be out of a job and donors don’t like seeing cuts to services they helped fund.

But it’s also where the true cost savings lie, he said.

“It becomes very, very fraught with problems,” Messinger said.

Outrage erupted in Cleveland when the Cleveland Clinic announced plans to close a trauma center in 2010. The health system later closed that hospital entirely.

“It sort of demonstrates why healthcare reform is so hard because it's so personal to people,” Levine said. “When you're in a position where you have to make these decisions, you just sort of have to make the decisions. Or hospitals will fail and people will lose access, and that's what's happening.”

Before taking the helm of Mountain States in 2014, Levine was a top executive at Health Management Associates, where he publicly denied government allegations that the for-profit chain improperly admitted emergency department patients. HMA’s new owner paid $262 million to settle that case last year. Levine says he had no involvement in those claims and that he's devoted his career to fighting fraud.

Ballad’s most active critics have hosted several public meetings and panel discussions, the most recent of which drew nearly 300 people in late August. Dani Cook, an organizer who lives in Kingsport, said she did not extend invites to Ballad’s executive team, but they would have been permitted to speak had they attended.

Some healthcare experts urge Ballad officials to rethink how they interact with their critics. One of them is Dr. Kenneth Kizer, chief healthcare transformation officer with Atlas Research and a former undersecretary for health at the U.S. Veterans Affairs Department. Kizer, whom the FTC called upon to review Ballad’s merger before it took place, said it’s imperative that company executives attend such events.

“You have to be there,” he said. “It’s unpleasant. People are going to say unkind things and they’re not experiences you remember fondly. But it doesn’t change the reality that you have to be there and make your case. You can’t ignore it and just wish them away. They have issues that need to be addressed.”

Kizer encouraged Ballad to work harder to develop a working trust with residents.

“People are disagreeing about what the basic facts are,” he said. “In the absence of knowing that, all kinds of things are put forward that may or may not have any legitimacy whatsoever.”

Levine contends Ballad’s representatives have been responsive to concerns, some of which he replies to on Twitter. White said she has personally met with protesters, although she has never approached the area in front of Holston Valley Medical Center where they are gathered.

Ballad’s style in addressing criticism often takes the form of lengthy letters refuting their points and requesting retractions, while somehow further obfuscating the core issues.

Two independent entities assigned to oversee Ballad’s COPA, the Local Advisory Council and COPA Monitor, separately criticized Ballad’s communication with the public in reports released earlier this year. The former encouraged Ballad to engage local stakeholders in a public input process before finalizing consolidation plans going forward and to revisit its communication strategy. The latter, consultant Larry Fitzgerald, acknowledged communicating effectively with an area the size of New Jersey is no small task.

“In spite of the efforts, communication has been ineffective,” he wrote.

“It's important to explain the problem before you explain the solution,” Levine admits now, adding that he’s gone in front of a city commission meeting attended by several hundred residents and spoke then for two and half hours. He also said he's hosted a number of community meetings.

Still, Ballad has a particularly contentious relationship with Cook, whom executives say is responsible for spreading misinformation. Cook regularly hosts spirited Facebook live videos from a tarp-covered encampment near the entrance of Holston Valley Medical Center in Kingsport. That's where she and a rotating group of supporters have spent more than 130 nights.

Cook clearly has gotten the attention of Ballad leaders. When a Modern Healthcare reporter visited Levine’s office in August, he retrieved a printed stack of Cook’s social media posts from his desk and read some aloud. Two months earlier, Ballad barred Cook from entering its Holston Valley hospital except for seeking care for herself or a family member. Ballad Spokesperson Teresa Hicks said Ballad has sent outside counsel to hand deliver legal notices to Cook. 

Cook, a self-described consultant and life coach who specializes in marketing campaigns and Facebook ads, has largely put her life on hold to protest Ballad. She said she’s a native of Bristol, about 20 miles from Kingsport. Cook claims her granddaughter was recently misdiagnosed at a Ballad ED. Hicks questioned whether Cook is paid by an outside entity, an allegation Cook flatly denied.

One thing is for sure: Cook has been successful in drumming up opposition to the changes Ballad is making.

“No one is saying we want Ballad Health to fail,” Cook told the audience at a recent event. “I think Ballad Health failing is a scary thing for all of us. No one is saying that. What we are saying is that people need a voice and a say in their healthcare, and we’re not going to stop until we get it.”

Our next installment in this four-part series will examine Ballad's Health's collections policy.