A pledge to spend $450 million on population health improvements and a health information exchange is part of an eye-catching agreement for two regional health systems to join forces — six-hospital Wellmont Health System, Kingsport, Tenn., and 13-hospital Mountain States Health Alliance, in Johnson City, Tenn.partnership-hospital-funding

Details of the agreement were unveiled in January by the two systems. “This will prove to be one of the most exciting economic development initiatives in our region over the coming decade,” says Bart Hove, Wellmont’s president and CEO. “I mean, think about it; almost half a billion dollars worth of investments back into our region. The economic development professionals ought to be doing backflips right now.”

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. Those involved say such a commitment puts to rest any argument that joining the two organizations would mean higher costs for consumers. “This is an affirmative commitment to absolutely reduce the growth in the price of health care,” says Alan Levine, president and CEO of Mountain States.

The two systems are pledging to address six key areas in their communities, if the states of Tennessee and Virginia green-light 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.

Faced with the option of either getting bought out by a much larger organization, or teaming with one another, the choice was easy, Levine says. 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 says.  “So, the choice is whether we merge with each other, or whether we’re acquired by outside systems.”

Wellmont and Mountain States submitted paperwork for the merger to the Tennessee Department of Health and Southwest Virginia Health Authority, initiating the state review process. They expect that evaluation to extend into late summer.