NASHVILLE, Tenn. (WJHL) — Ballad Health continued in 2020-21 (July 1, 2020 to June 30, 2021) to provide the “public advantage” required to maintain its status as an inpatient monopoly, the Tennessee Department of Health (TDH) announced.
TDH’s annual report, required as part of the Certificate of Public Advantage (COPA) that allowed Ballad’s 2018 creation through the merger of Wellmont Health System and Mountain States Health Alliance, was different than any before it due to the COVID-19 pandemic. It also came out later than previous ones, with the 2019-20 report being released in April 2021.
The report noted several areas of success Ballad achieved even in the midst of the COVID-19 pandemic. It scored the hospital system only on its “economic sub-index,” one of four areas usually scored, though it did provide data on the other three (population health, access and quality).
“Ballad Health’s handling of the pandemic and the fact that all of Ballad Health’s 21 hospitals, including its many vulnerable rural hospitals, remained open throughout the year have been identified by TDH as two of the system’s greatest successes for FY21,” the report said.
Within its 95 pages are data and narratives showing areas where Ballad exceeded peer groups or expectations and others where it fell short of those. For instance, Ballad’s service area outperformed “peer counties” in rates of drug deaths and non-fatal overdoses and vaccination measures, the report noted, adding that it outperformed peer counties in more than half the population health sub-index measures.
Conversely, smoking rates, cardiovascular deaths and infant mortality were higher in Ballad’s “general service area” than in the peer counties.
Ballad CEO Alan Levine lauded the report’s finding that Ballad continues to provide a competitive advantage.
“The investments we have been making into population health initiatives, and our ongoing collaboration with hundreds of physicians in the region, has led to some compelling results,” Levine said in a news release. He added that Ballad has “reduced the overall cost of healthcare for the region … Lower cost of care and better quality go hand in hand, and we are grateful for the partnership we have with our region’s physicians as we seek to continue improving.”
The report also revealed that “preventable hospitalizations” among people 65 and over had dropped by nearly half for the 2021 report compared to a 2017 baseline. The metric was 37.9 discharges per 1,000 people in that age group in 2020, compared to 72.2 in 2017.
For adults overall, the figure had dropped from 25.6 in 2017 to 17.5 in 2022, a 32% decline.
The annual report is among numerous requirements of Ballad and the states of Tennessee and Virginia after they approved legislation that gave Ballad “state action immunity” from normal antitrust enforcement. That immunity stems, the annual report states, due to the COPA “replacing competition with state regulation and Active Supervision.”
Because the merger formed a monopoly the Federal Trade Commission (FTC) could have opposed, Ballad had to prove to the states that its benefits would outweigh any disadvantages created by lack of competition.
The report, the work of COPA Monitor Larry Fitzgerald and other intervention and oversight from TDH and the Tennessee Attorney General’s office, reflect the “ongoing supervision” that federal law requires when a monopoly is shielded. The FTC expressed its concerns about the proposed merger as it was developed in 2015-2017 and continues to scrutinize Ballad, albeit with limited to no enforcement power.
If the states ever determined the public advantage had ceased to exist, the merger could be subject to federal intervention and potentially be forced to be unwound.
The broad overview — good, not as good, and COVID-suspended
Ballad’s COPA requirements diminished significantly between March 2020 and early 2022, with numerous suspensions granted through Gov. Bill Lee’s state of emergency due to COVID. Ballad didn’t have to complete its own annual report for FY21. It didn’t have to meet spending commitments that are an important part of the COPA.
The report noted the major negative impact COVID has had on hospitals and health systems. It listed a half dozen “things that are working well” based on the 2020-21 time period. In addition to keeping open hospitals that were under threat of closure, those included:
- Efficiently redeploying staff across the system to respond to COVID “in ways that would not have been possible as two separate competing systems.”
- Ballad’s COPA compliance office responding “quickly and thoroughly” to inquiries from TDH and Ballad executives meeting regularly with Fitzgerald, the COPA monitor.
- Executive staff updating TDH staff through monthly calls and quarterly meetings to discuss progress in implementing three-year plans around behavioral, mental and children’s health, health research and graduate medical education, population health, and the system’s health information exchange (electronic medical records).
- The “size and range” of stakeholders involved in a regional “Accountable Care Community” that Ballad led establishment of.
The report found that Ballad maintained and even approved access for patients in many areas. It said struggles with quality improvement efforts and hospital-associated infections at Ballad were consistent with similar shortfalls nationwide as hospitals, particularly rural ones, adapted to the pandemic.
Fitzgerald’s report looked at pricing limits Ballad agreed to when it was formed. Those are found in the “Terms of Certification” (TOC) that govern the merger. They cover insurance companies and what they pay Ballad for services provided to their patients. Fitzgerald monitors contracts before they’ve been signed, if they’re going to be amended, during their terms and for a year following the start of new or renegotiated contracts.
“Based on the reviews … completed in fiscal year 2021, Ballad complied with the pricing limits in the TOC for fiscal year 2021,” Fitzgerald reported.
Fitzgerald’s report also noted that Ballad has fallen behind in its commitment to reinvest $308 million over 10 years on efforts to improve health in the region. The annual spending commitments were also suspended during the health emergency, so nothing was required during FY21, but those amounts will have to be made up in later years.
The population in Ballad’s area had a mixed record on various “population health” measures.
Adults smoked at a 21.8% rate, 2.4% higher than the peer counties and well above the 14.2% national rate, but youth who’d ever tried cigarettes was lower than peer or national statistics.
The region continued to struggle with neonatal abstinence syndrome, with a rate of 38.4 per 1,000 births, almost double the peer counties’ rate and quadruple the state’s. Overdoses were lower than the peer county and state rates.
People in the Ballad area were prescribed a higher level of morphine or morphine equivalents than peer counties and almost double the U.S. average — 827 milligrams to 789 for the peer counties, 569 statewide and 425 nationally.
On the outcomes/quality section, Ballad hospitals had improvements from baselines in 30-day death rates for stroke patients as well as for heart failure and heart attack patients. Postoperative respiratory failure rates were only half the baseline amount.
Rates of death from surgical patients with serious treatable complications were higher than baseline, as were 30-day readmission rates for most measured hospitalization categories.
Finally, the access issues surrounding emergency medicine that Ballad officials have acknowledged were clear in the “outcomes” section.
Ballad’s baseline for Medicare and Medicaid patients (2017) was 227 minutes “median time from ED arrival to transport for admitted patients,” or just under four hours for patients who ended up admitted to the hospital from the emergency room. In FY 2021, it was 366 minutes, having gone from just under four hours to just over six hours.
At Ballad’s Tennessee hospitals, the measure had gone from 232 minutes to 411 minutes – or nearly seven hours.