Levine: ‘They didn’t even read it,’ following economists’ comments blasting MSHA, Wellmont merger plan

Alan Levine, CEO of MSHA, has led the effort to merge with Wellmont Health System by winning state approval through a Certificate of Public Advantage.

JOHNSON CITY, TN (WJHL) – Economists from some of the nation’s top universities want the state of Tennessee to reject a merger application from Mountain States Health Alliance and Wellmont Health System.

But the CEO of MSHA said the economists criticizing the merger haven’t even read the application.

In a letter dated November 21 and recently posted on the Tennessee Department of Health’s website, 46 economists from Harvard, Vanderbilt, Yale, and other top universities “urge the Department of Health to reject the COPA application submitted by Mountain States Health Alliance and Wellmont Health System.”

The COPA, or Certificate of Public Advantage, is the written agreement by state health officials to govern hospital mergers to protect the public where there’s reduced market competition. In the case of MSHA and Wellmont’s planned merger, Tennessee and Virginia health officials have to decide if the benefits of a merger would outweigh the potential negative impacts of reduced competition.


The economists want the state to reject the merger request saying there’s “no longer any meaningful debate” over whether competition is good for health care consumers. “The proposed merger would (by the admission of the parties) eliminate head to head completion between rival hospitals,” the economists said in a letter to Dr. John Dreyzehner, TN Health Commissioner. “An extensive body of economic literature finds that hospital mergers among close competitors lead to higher prices, on average, while evidence of cost savings and quality improvements is scant.”

In an interview Monday, MSHA CEO Alan Levine discredited the economists’ comments calling them “speculative,” not backed by actual evidence, and missing any reference to numerous promises made by the health systems outlined in the COPA application to keep costs down for people getting care.

“Not one of those economists spoke with us,” Levine said. “Not one of those economists actually read the documents that we submitted to the state. Not one of them saw the documents we submitted to the state in terms of the synergies we would create.”

Levine said key parts of the application which prove benefit to the region aren’t part of the public record at this point, so it’s impossible for the critics to understand the full scope of what’s being considered by state officials.

Levine also was critical of another recently submitted comment to the Department of Health.

An “Independent Assessment of the Proposed Merger Between Mountain States Health Alliance and Wellmont Health System” also was submitted to Tennessee Health Officials on Nov. 21.

Written by Dr. Kenneth Kizer, Distinguished Professor of the UC Davis School of Medicine, and commissioned by the Federal Trade Commission which has publicly opposed the merger, the assessment concluded “many of the claims of efficiencies and savings, improved access and quality of care, and better population health lack credibility because the parties have not provided a reasonable explanation for how the claimed benefits will be accomplished.”


Kizer wrote, “even if one were to suppose that the claimed benefits would occur, there is a marked lack of substance in the stated reasoning about why the merger itself is necessary to achieve them and how the merger per se will lead to the claimed savings, quality improvements and other benefits.”

The Kizer assessment and economists’ letter are among 134 written comments received by the Tennessee Department of Health, which doesn’t include comments made during listening sessions and public meetings during which Tri-Cities region business and government leaders voiced widespread support for the merger.

“It’s amazing how everyone from California to Boston to Washington seems to know what’s best for our region except for the multitude of business leaders, the political leaders, the people who have created jobs here (who) overwhelmingly supported this merger,” Levine said.

Requests for comment have been made from Kizer and several economists who signed the report.

The Tennessee Department of Health has until Jan. 13 to approve or deny the merger application.

“I hope that the state will give weight to the people who live here and create jobs here who are actually the ones paying for the services,” Levine said. “Not the people who’ve not even read the full documents or who don’t even understand what we’re talking about doing.”

News Channel 11’s Nate Morabito contributed to this report.

Copyright 2016 WJHL. All rights reserved.

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