Moun­tain States-Well­mont merger de­layed

Modern Healthcare - - LATE NEWS - —Maria Castel­lucci

Moun­tain States Health Al­liance and Well­mont Health Sys­tem are tak­ing time to tweak their merger ap­pli­ca­tion af­ter fed­eral reg­u­la­tors and prom­i­nent health econ­o­mists slammed the deal.

The Ten­nessee Depart­ment of Health last week ap­proved the sys­tems’ re­quest to sup­ple­ment their cer­tifi­cate of pub­lic ad­van­tage ap­pli­ca­tion. Last Fri­day was the dead­line for the health depart­ment to give its de­ci­sion on the COPA, which must be ap­proved by state reg­u­la­tors in both Ten­nessee and Vir­ginia in or­der for the merger to pro­ceed. The Fed­eral Trade Com­mis­sion has asked both states to re­ject the COPAs.

“Our ob­jec­tive is to en­sure the record in both states re­flects our vi­sion for the im­proved health of our re­gion, and that the record strongly sup­ports a pos­i­tive out­come,” said Alan Levine, pres­i­dent and CEO of Moun­tain States.

The sys­tems es­ti­mate the merger will re­sult in about $121 mil­lion in an­nual cost sav­ings af­ter the first five years.

The FTC says the merger would cre­ate an anti-com­pet­i­tive health­care en­vi­ron­ment, lead­ing to higher prices and lower qual­ity of care for pa­tients. Moun­tain States and Well­mont have lo­ca­tions in Ten­nessee and Vir­ginia. John­son City, Tenn.-based Moun­tain States op­er­ates 13 hos­pi­tals, and Kingsport, Tenn.-based Well­mont op­er­ates six.

The FTC said to­gether the sys­tems would have a “near-mo­nop­oly” of ser­vices and con­trol 71% of in­pa­tient ser­vices in their mar­kets. The agency also ques­tioned both sys­tems’ ar­gu­ment that as ru­ral providers they are strug­gling fi­nan­cially and must merge to sur­vive.

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