Tennessee Determines Ballad Health Continues to Provide a Public Advantage

Cites Ballad Health's management during the pandemic, measurably better population health and a compelling decrease in preventable hospitalizations

The Tennessee Department of Health (TDH) released its Fiscal Year 2021 Certificate of Public Advantage Department Annual Report, determining “that the Ballad Health COPA continues to provide a Public Advantage” to the citizens of Tennessee.

Each year since the creation of Ballad Health, the State of Tennessee and the Commonwealth of Virginia have independently confirmed the public advantage created by the unification of the hospitals in a rural region.

Prior to the merger, one hospital in the region had closed, and several were facing financial insolvency. For instance, in Greeneville, Tennessee, one previously independent hospital’s debt was called by the bank, while the other hospital had been “put” by each of its partner owners – meaning, neither party wanted to keep the hospital. Since the merger, and during 2021, Ballad Health opened a hospital in Lee County, Virginia, which had previously closed, and every community served by hospitals that were previously in financial jeopardy has retained their hospitals, which are operating today.

In its latest report – covering the time period of July 1, 2020, to June 30, 2021 – TDH noted that as a combined health system, Ballad Health was able to respond to the COVID-19 pandemic “in ways that would not have been possible as two separate health systems” to ensure the deployment of staff, beds and personal protective equipment met the needs of the community and served as a trusted voice in the region for COVID-19 information.

TDH highlighted that, despite the significant challenges for population health across the United States during the pandemic, the 11 Tennessee counties served by Ballad Health in “the COPA region performed better, and [were] shown to be healthier, than peer counties in 50 percent of population health” measures and that drug overdoses have decreased considerably in the region since the merger. The region also outperforms peer counties on all vaccination measures for children and adults.

Important to taxpayers, area businesses and individuals, the overall cost of healthcare was reduced due to the reduction of preventable hospitalizations and avoidance of emergency department utilization for certain populations – for instance, childhood asthma. The TDH annual report cites that Ballad Health reduced preventable hospitalizations in adults 65 and older by almost half (72.2 discharges per 1,000 people in 2017, vs. 37.9 discharges per 1,000 people in 2020). Preventable hospitalizations are defined as admissions for certain illnesses or chronic conditions that might not have required hospitalization had these conditions been managed successfully by primary care and other providers in the outpatient setting.

Reducing preventable hospitalizations also leads to improved patient safety and lower cost. Patients, employers and taxpayers also pay less out of pocket for healthcare by avoiding expensive hospitalizations and other procedures if they are better managed in the outpatient environment by their physician and clinical team. Prior to the COVID-19 pandemic, Ballad Health had reported an annualized decrease of more than 15,000 hospitalizations, translating into at least $200 million less spent annually on hospital care.

In each year prior to the COVID-19 pandemic, Ballad Health has maintained one of the nation’s most successful Accountable Care Organizations, which has been highlighted by the Centers for Medicare and Medicaid Services as one of a handful of organizations that has produced savings for taxpayers in each year since the program’s creation, while producing high quality scores.

“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,” said Ballad Health Chairman and Chief Executive Officer Alan Levine. “While we have reduced the overall cost of healthcare for the region, we are also very pleased that just last week, U.S. News and World Report cited eight Ballad Health hospitals as high-performing in multiple specialties – notably, our great heart and stroke care, as well as many surgical specialties. 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 TDH also found that Ballad Health has consistently complied with provisions of the merger agreement, which limits pricing to a rate below peer organizations. In addition, Ballad Health satisfied all other economic conditions placed upon it by the agreement, which protect local competition. The report of the state monitor also cited that no complaints have been filed with the COPA Monitor from any physician that were determined to be a violation of the Terms of Certification of the agreement.

“The physicians who partner with Ballad Health are grateful the state sees the value in the work that is being done on behalf of our patients,” said Dr. Mark Chang, an area cardiologist and elected leader of the Ballad Health Clinical Council. The Clinical Council is composed of physicians from throughout the region, both independent and affiliated with Ballad Health, who partner with the health system in identifying opportunities to elevate quality, reduce cost and create value for patients.

“The spirit of partnership is important, and this is how we have been able to achieve such good results for the community we all love and call home,” Dr. Chang added. “All of us must keep our focus on the patient, particularly during this challenging time defined by national staffing shortages, which we all are working to mitigate.”