FTC urges Tennessee regulators to reject Wellmont-Mountain States merger

The proposed merger of Mountain States Health Alliance and Wellmont Health System was mostly supported by public comments at a Tennessee hearing, but the Federal Trade Commission (FTC) urged regulators to block the deal.

The FTC has actively opposed the deal in southwest Virginia, but hadn’t voiced their concerns to the Tennessee Department of Health. As with other mergers it has opposed, the agency said merging the two systems would result in higher prices and reduced quality, while the hospitals claim the deal would benefit patients through clinical efficiencies.

“Mountain States and Wellmont have not provided sufficient information to substantiate many of them, nor have they demonstrated that the claimed benefits and cost savings would offset the merger’s substantial harm to competition,” the FTC said in its comment to the department. “Moreover, the proposed merger does not appear necessary to achieve many of these claimed benefits, which could be realized either independently or through another collaboration or merger that would not be as harmful to competition as the proposed merger.”

The Johnson City Press reported most of the 27 speakers at the Nov. 21 hearing were employees of the two health systems and spoke in favor of the merger.

A report released by the FTC in September said the combined Mountain States-Wellmont system—which would be rebranded as Ballad Health—would control 71 percent of the geographic area which they both currently serve in Tennessee and Virginia.

That report didn’t sway regulators in southwest Virginia, as its health authority unanimously approved the deal Nov. 7. The decision now goes to the Virginia Department of Health.