One particular commitment — along with millions pledged up front toward population health — makes a proposed union between two hospital networks in Tennessee and Virginia especially unique.

Six-hospital Wellmont Health System, based in Kingsport, Tenn., announced plans Thursday to merge with 13-hospital Mountain States Health Alliance in Johnson City, Tenn. The two are promising to spend some $450 million toward population health improvements and a health information exchange between their slew of facilities, in an agreement those involved are calling “innovative” and “transformational.”

But particularly noteworthy is the proposed 19-hospital organization’s pledge to stave off any growth in health care costs, placing limits on negotiated rates with insurers to keep increases below the national average.

“This is an affirmative commitment to absolutely reduce the growth in the price of health care,” Alan Levine, president and CEO of Mountain States, said at a press conference Thursday.

The two systems are pledging to address six key areas in their communities, if the states of Tennessee and Virginia approve the deal: improving community health, enhancing health care services, expanding health care choices and access to care, bolstering value, investing in research and education, and attracting and retaining a strong workforce. They’re backing up those commitments with big bucks in several areas over the next decade:

  • At least $75 million toward population health improvements, allocated through a 10-year plan developed with the health system’s communities and public health resources;
  • A minimum of $140 million to expand community-based mental health services, residential and outpatient addiction recovery programs, and tobacco and substance abuse prevention programs, along with further support for children’s and rural health services;
  • A minimum of $85 million to develop and grow academic and research opportunities, support postgraduate health care training and strengthen the pipeline of health care professionals;
  • Up to $150 million to implement a common information technology platform to support the regional exchange of health information and connect their hospitals.

Faced with the options of either getting bought out by a much larger organization, or teaming with one another, the choice was easy, Levine said during yesterday’s press conference. Remaining independent was not an option, and a larger acquisition of both systems, he believes, would have spelled a loss of both control and jobs in their communities.

“In the environment where you have the largest insurance company mergers in history happening, where really 90 percent of our nongovernment payer mix is going to be controlled by three payers, it’s an environment where we don’t think, long term, we can sustain ourselves as small, independent systems,” Levine said.  “So, the choice is whether we merge with each other, or whether we’re acquired by outside systems.”

For more on the partnership, you can check out the website here, or watch for our full report in the February issue of Hospitals & Health Networks