Mountain States, Wellmont Respond to Comments Submitted to State of Tennessee by FTC and Others

FOR IMMEDIATE RELEASE 12/20/16

MOUNTAIN STATES, WELLMONT RESPOND TO COMMENTS
SUBMITTED TO STATE OF TENNESSEE BY FTC AND OTHERS

On Monday, Dec. 19, Mountain States Health Alliance and Wellmont Health System submitted a thorough response to comments filed with the Tennessee Department of Health by staff of the Federal Trade Commission as well as others. Our response details several errors in the FTC staff’s analysis and highlights flaws in many of the additional comments the state received. Areas where these comments fell short include:

1. A group of academic economists who provided comment did not conduct any specific research about our proposed merger and did not review all the relevant information in the state record. Their commentary offered citations of studies related to the effect of mergers; however, they did not provide relevant information included in some of the same studies that would have been more supportive of our proposed merger. Our response provides detailed citations of such studies, which contradict the academics’ opinions. Absent any specific research of our proposed merger, their commentary is speculation and without merit.

2. FTC staff members dismiss Tennessee law that governs our proposed merger. Respectfully, FTC staff members’ policy preferences are not relevant to the debate and do not supersede the sovereign rights of the State of Tennessee to regulate industry within its borders. FTC staff members also provided only partial information related to the effects of regulated mergers elsewhere that have demonstrated success with measurably lower costs and improved quality. Further, in citing the U.S. Supreme Court, the FTC staff excluded language within the very same ruling they cited, which supports state-action immunity and makes clear federal policy is to respect the sovereign rights of the states in matters of state-action immunity. This immunity governs our proposed merger. Finally, FTC staff is using the same arguments it used in West Virginia, which recently rejected the FTC staff’s arguments and granted a Certificate of Public Advantage under a law similar to Tennessee’s.

3. Dr. Kenneth Kizer, who was engaged by the FTC staff to independently assess our proposed merger, has never once spoken with either Mountain States or Wellmont in performing his inquiry and has not conducted an in-depth personal investigation into the proposed merger. He cited broad studies with no applicability to our proposed merger, did not review all the relevant information provided to the state by the health systems and actually makes statements that contradict actions he took in his previous roles that support the very basis for the merger. For example, Dr. Kizer questions and criticizes the commitment to establish a single electronic health record system for the combined organization but glosses over the fact that as the CEO of the Veterans Affairs health system, he championed the expenditures of more than $1 billion of taxpayer dollars to promote an EHR within the VA for the exact same reasons our local health systems are seeking to do so. He led mergers of VA hospitals for the purpose of creating synergies and improving quality just as our local health systems are seeking to do. He does not cite a single alternative solution for our region that would generate $450 million in investment for our communities, mitigate local job loss and retain local governance of the region’s largest economic driver. In our response we provide past quotes and writings from Dr. Kizer that support the very premise of our local merger, and challenge assertions he makes about alternatives to the merger.

4. The FTC staff and academics completely ignore the overwhelming support for our merger from local business and community leaders who have spent time and resources understanding the reasons for the merger, our commitments to protect the public and the potential alternatives to the merger. This backing from local leaders should carry great weight with the state as it evaluates our proposed merger.

5. The comments fail to evaluate, let alone negate, the clear and convincing evidence that our proposed merger will result in lower costs, improved quality, sustainability of the region’s health care assets, investment in badly needed addiction recovery, mental health services and pediatric specialties, and investment in research and academics.

Our response provided to the state is lengthy and detailed. Citations are included as evidence to ensure the comments are not merely conclusory but are supported by the facts.
The media and the community can review our entire response and see other information about the proposed merger at www.becomingbettertogether.org.

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About Wellmont Health System

Wellmont Health System is a leading provider of health care services for Northeast Tennessee and Southwest Virginia, delivering top-quality, comprehensive health care, wellness, and long-term care services across the region. Wellmont facilities include Holston Valley Medical Center in Kingsport, Tenn.; Bristol Regional Medical Center in Bristol, Tenn.; Mountain View Regional Medical Center in Norton, Va.; Lonesome Pine Hospital in Big Stone Gap, Va.; Hawkins County Memorial Hospital in Rogersville, Tenn.; and Hancock County Hospital in Sneedville, Tenn. For more information about Wellmont, please visit www.wellmont.org.

About Mountain States Health Alliance

Since 1998, Mountain States Health Alliance has been bringing the nation’s best health care close to home to serve the residents of Northeast Tennessee, Southwest Virginia, Southeastern Kentucky and Western North Carolina. This not-for-profit health care organization based in Johnson City, Tenn., operates family of 13 hospitals serving a 29-county region. Mountain States offers a large tertiary hospital with level 1 trauma center, a dedicated children’s hospital, several community hospitals, two critical access hospitals, a behavioral health hospital, two long-term care facilities, home care and hospice services, retail pharmacies, a comprehensive medical management corporation, and the region’s only provider-owned health insurance company. The team members, physicians and volunteers who make up Mountain States Health Alliance are committed to caring for you and earning your trust. For more information, visit www.mountainstateshealth.com.

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