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Alan Levine explains why ‘an unapologetic free market capitalist’ thinks East Tennessee can be healthier with less competition

Alan Levine, CEO of Ballad Health, talked to a group at Health:Further on Aug. 29 about how, and why, the newly merged health system wants to rethink the way people get care in East Tennessee.  
The Great Smoky Mountains. Photo by Sean Stratton on Unsplash


Alan Levine, CEO of Ballad Health, described himself as “an unapologetic free market capitalist” right in the midst of explaining why competition hadn’t solved — and won’t improve — the health problems in his region of Tennessee.

Northeast Tennessee has higher rates of babies born with neonatal abstinence syndrome, a striking amount of mental health problems and increased rates of chronic disease, with only about 15 percent of the population covered under commercial insurance.

“Competition didn’t solve those problems,” Levine said at Health:Further, on an innovation track sponsored by The Disruption Lab. “Even as the economy boomed, our health rankings have gotten worse. We need to take a region by region approach.”

Two health systems, Mountain States Health Alliance and Wellmont Health System, were focused on the endless competition for patients and doctors. Instead of one selling to a separate, larger entity for scale, which Levine said would have likely caused the other to do the same — they merged.

Wellmont and Mountain States had to get special state approval from Tennessee and Virginia to merge into a single entity that will monopolize the care systems of the Tri-Cities region. The deal took years.

The argument the leaders made was the region needed coordinated services and care, and that they could do work toward those goals and tackle prices if removed from the race for patients and physicians. Levine doesn’t think the model works everywhere but the economics and problems facing the Tri-Cities needs focus and resources.

There was redundancy in services — and it was overbedded — with the systems acting independently, and the care wasn’t strategically planned for what the region needed, he said. Instead, the systems focused on how to compete against the other.

In one community, the “competitive marketplace had us each hiring surgeons” to amputate limbs, but there was no endocrinologist to help diabetic patients keep their limbs, said Levine.

The combined entity, with 21 hospitals serving 29 counties in four states, is better suited to meet the needs of its patients, he said, both with the types of services and a joint IT system to track and engage with patients. Ballad just selected Epic for a new system that will hopefully decrease “click fatigue” among providers and offer a trove of data to study about its population.

“We’re not a hospital system. We’re a health improvement organization — and we’re a data organization,” said Levine. 

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The region needs flexibility and innovation, not just hospitals trying to best one another

As part of the deal, Ballad committed to take on community improvement initiatives that the two systems couldn’t do independently, Levine said.

For instance, Ballad leaders talked to school leaders from across the region about serious concerns from administrators and teachers about a surge of students arriving at the start of the school year in crisis or suicidal.

There is a dearth of mental health resources across the state, and the summer break means students who are dealing with stress or chaotic situations have few, if any resources, in the months between semesters.

Ballad is implementing a telehealth network in which it will hire counselors to whom school workers can refer a student.

Ballad doesn’t have a reimbursement model to get paid for the quick launch network “and if we were still competing it wouldn’t be on our radar,” said Levine.

The response from administrators was overwhelming.

“You would have thought I invented bread,” he said. “This is not a big deal to do, but that’s how starving these rural areas are.”

There’s a plan to improve literacy across the region by getting up to 1,000 health system employees plugged into schools.

There’s also an initiative in the works to identify pregnant, homeless women so they can be provided housing, care and food to improve the health of the baby and then connect them with additional resources after labor and birth.

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Measurable results are years away but Levine wants leaders to think regionally to meet local needs

Evidence and data by which to assess the merger’s success or failure — or some combination thereof — won’t be available for years.

Health outcomes don’t improve overnight. Integration of systems and realigning or redeploying services and staff take time.

Levine expects “we’ll start to see tangible things happening in next 12 months” but other proposed benefits, such as impacts on pricing and health, won’t be measurable for four to five years.

The combined health system expects to be able to work on pricing — although critics of the deal said it’s likely to rise.

Levine told the audience it wasn’t easy to get approval and the systems had to prove the deal was in the best interest, and make commitments to improving health. Ballad is still in the process of submitting six strategic plans to the state for approval, which is required under the merger approval.

Support from the business community in the area was vital, and he recalled meeting with a CEO who expressed concerns about the impact on pricing if either, or both, health systems were purchased by larger operators.

Down the road, Levine wants independent studies, perhaps from East Tennessee State University, to look at the impact the merger had. He thinks it will benefit the region.

Levine doesn’t think the Ballad model should be a template for everywhere. Instead, he wants business, health care and political leaders to think regionally about care to make decisions that fit economic and cultural characteristics.

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