When affording health care is already a burden for Americans in rural and underserved regions, making patients spend additional hours and gas money for basic and emergency health needs adds insult to injury. Yet this is exactly what Tennessee and Virginia lawmakers allowed to happen. 

In 2018, two rival health systems – Mountain States Health Alliance and Wellmont Health System – that serve northeast Tennessee and parts of neighboring states Kentucky, North Carolina and Virginia merged into one health system. The resulting entity, Ballad Health, serves as the sole provider for an estimated 1.2 million Americans. 

The “unusual, controversial” merger raised alarms with regional physicians and the Federal Trade Commission (FTC) from its announcement in 2016. However, Tennessee and Virginia have found a way to skirt around the normal scrutiny by creating Certificates of Public Advantage (COPAs) that prevents a health care merger from antitrust enforcement because the state promises to monitor the combined health system. 

Last month, the Tennessean released a series that shows the resulting gaps in the region’s health coverage and how rural Americans in the area are already noticing a decline in access and quality. Earlier in June, the FTC hosted a panel workshop in Washington to consider the legality of the COPA that allowed the Ballad merger to happen. It’s no question that this merger was a boon for the health system:  as CEO Alan Levine told Business Journal last year, the merger allowed the two companies to restructure their combined $1.3 billion in long-term debt and decrease annual payments from $105 million to less than $85 million. However, this merger so far appears to have caused only trouble for patients and the physicians who serve them. 

In light of these recent developments, Tarbell would like to highlight the analyses of Dr. Raymond Feierabend, a professor emeritus from East Tennessee State University’s Department of Family Medicine and a retired family medicine physician who had served Bristol, Tenn. and surrounding areas. As such, the active physician has noticed issues with the merger and written about them on our website. 

In his first Tarbell analysis in March, Dr. Feierabend explains the creation and operation of COPAs, the legislation that even allowed the Ballad merger to happen in the first place, and how the state may (or may not) be able to monitor a system like Ballad. 

Dr. Feierabend then unpacks some of the promises that Ballad used to defend the merger of the system, and how his community is not seeing those benefits thus far, and in fact appears to be suffering. 

Finally, Dr. Feierabend notes how merging insurance systems further limit patients’ options when they live in a region overtaken by a monopoly like Ballad. If any of the five dominating health insurers cannot negotiate further with Ballad, they can just leave the region, with no great loss to them. As he mentions in his analysis: 

One would think that when consolidated insurance companies are able to negotiate lower prices with hospitals, physician groups, and pharmacies, those lower costs would benefit enrollees in the form of lower premiums, deductibles, and co-pays. However, the opposite appears to be the usual outcome.

Defenders of America’s current, privatized health care system – and those who want to privatize the system further – rely on one key argument: privatization offers patients more choice in their care. Yet, when hospital systems and insurers are allowed to operate in their interests, they expand, merge and conquest territories just as retail companies Amazon or Walmart would. Patients are left with no choice but to travel out for their care, or put their medical needs on hold. 

Please stay tuned to Tarbell.org, as Dr. Feierabend will soon return with a new analysis. 

Correction: This article originally made it seem as if Dr. Feierabend is still actively serving as a physician. He is fully retired. We regret the error.