MSHA's had "informal" talks about possible alignment with Wellmo

MSHA's had "informal" talks about possible alignment with Wellmont

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JOHNSON CITY, TN (WJHL) - Wellmont Health System is reviewing proposals from six organizations interested in possible alignment. Although the identities of those organizations remain unclear due to confidentiality agreements, Mountain States Health Alliance Board Chairman Clem Wilkes confirms the organization has had "informal" talks about the idea.

Although reluctant to discuss the possibility initially, when we questioned Wilkes about alignment last week, he eventually told us Mountain States Health Alliance has "talked about what the models might look like" if Wellmont and Mountain States were to align.

At the moment, he and Chief Financial Officer Marvin Eichorn say Mountain States is not exploring or pursuing alignment. However, Wilkes admits there have been informal discussions.

"There's so many hurdles that you would have to go over, such as Antitrust and Federal Trade Commission type hurdles and what not, so you just have to wait and see," Wilkes said. "We've talked about it, what the models might look like, but as far as actually exploring, no. We've talked about would it not make sense to combine say the children's services and joint venture that in some way."

For now, Wilkes says Mountain States is just sitting back and watching this play out. Still, he says the outcome of Wellmont's alignment could impact the organization.

"Are we looking to align or entertain the notion? No, but could it come to that? Would it or could it? I think realistically you have to say, 'Sure, maybe it is what forces Mountain States to align with a strategic partner as well,' but we do want to keep it local," Wilkes said. "If it continues this way, you could see a handful of extremely large health systems headquartered out of this area and it would take hundreds of millions of dollars out of this area, because Wellmont and Mountain States' key executives would be relocated."

When we followed up with Mountain States about future plans today, the organization released a statement from CEO Alan Levine.

"Our friends at Wellmont have embarked upon a process to determine the future of their system," Levine said. "We refer all inquiries about their process to Wellmont and have no comment about it. The combination of Medicare cuts, cuts from commercial insurance companies, volume reductions and the refusal of the leadership of Tennessee and Virginia to accept the billions of dollars of funding available to fund the care for the uninsured being provided by hospital systems has, indeed, led to reductions in employment, and hundreds of millions of dollars of negative economic impact to our region. Like Wellmont, we remain concerned about the employment impact of these financial challenges. Most importantly, our focus is on ensuring high quality care is available when our friends and neighbors need it, and that will always remain our priority."

As far as Wellmont's process, whichever organization Wellmont aligns with, Wellmont says a deal could be in place by the end of the year. The company previously cited increasing regulations and financial pressures as the reasons for considering alignment.

When asked if Mountain States is among the organizations interested in alignment, a Wellmont spokesperson would not comment.

"Due to the legal and confidential nature of this process, unfortunately we are unable to share that information," spokesperson Jim Wozniak said.

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