Ballad Health Chairman and CEO records guest spot on healthcare podcast
Ballad Health Chairman and Chief Executive Officer Alan Levine recorded a guest spot on “Healthcare is Hard: A Podcast for Insiders,” which aired on Thursday, June 17.
In the episode “When Consolidation Isn’t About Pricing Leverage: How Ballad Health Merged Two Systems to Reduce Costs and Reinvent Rural Healthcare,” Levine spoke with podcast host Keith Figlioli about how Ballad Health is working to better understand the dynamics of rural healthcare and making big structural changes to address them.
He shared specifics about many of the changes Ballad Health has already implemented and his plans to continue down this revolutionary path. Their conversation covers topics including:
Trading competition for regulation. In the areas of Tennessee, Virginia, North Carolina and Kentucky where the legacy Wellmont Health System and Mountain States Health Alliance operated, only 50% of hospital beds were occupied, and rates were declining. To survive and give it stability, Wellmont looked to be acquired by an outside system, until Mountain States stepped in with a unique solution to merge. But the FTC opposed the merger at every step, forcing legislation in Virginia and Tennessee, followed by approval from both states’ governors, attorneys general and health commissioners. Against significant odds, the merger was approved, with Ballad Health agreeing to cap pricing and price increases at a rate well below the hospital consumer price index (CPI).
Eliminating duplication. Many of the structural changes at Ballad Health revolved around reducing duplicate services. Intense competition between Mountain States and Wellmont forced one system to always keep up with the other. As a result, a small town such as Greeneville had two hospitals a little more than a mile apart, both of which had lost $70 million at 30% capacity in the years leading up to the merger. One of Ballad Health’s key goals is to implement a more rational approach and business model that makes sense for rural areas.
Transforming from hospitals to health improvement. While reducing duplication, Ballad Health is thoughtfully applying the resources it saves to improve the health of its communities upstream. For example, in one region where it consolidated hospitals, it converted one building into a residential facility for women who are pregnant, homeless, drug addicted or have other needs. It gives these women housing security, food security and resources to help ensure their babies are born into healthy situations.
The new competitive landscape. Levine said his biggest competition is no longer the health system or physician group down the street. It’s the tech-enabled company across the country or a retail chain that could provide primary care. And unlike health systems in urban areas that can offset the loss of a patient with populated growth, there’s nothing to replace that loss in a rural area. This is why technology will play a significant role in the transformation of rural healthcare.
“Healthcare is Hard: A Podcast for Insiders” is available on all major podcast directories, including Apple, Google and Spotify.
