Peer Pressure of a Different Kind
How hard did Bill Greene and the "hole-in-the-wall gang" push?
In my last post, I shared with you the contradicting messaging that has gone out to the public around the merger of Mountain States Health Alliance and Wellmont Health System. Much of it came from an article in the Johnson City Press in September 2017 about the events of 2014 with banker, Bill Greene.
Today, I’m taking the time to go into more detail about those events and the apparent pressure the self-proclaimed “hole-in-the-wall-gang” put on Wellmont leadership and its Board of Directors. I’ve covered most of the high points over the last five years, but with the recent Request for Information by the Federal Trade Commission, Department of Justice, and Department of Health and Human Services and the Assistant Attorney’s announcement of the new Health Care Monopolies and Collusion task force, I felt it prudent to review that information in greater detail and depth.
When you grow up or live in a small town or rural community, you get used to the “good ol’ boys”. You know who the major players are, who comes from old money, who is new, but controllable money, and who will do what the major players want. You know that they sit on each other’s boards, pretty much control the Chamber of Commerce, the local press, the charities, all the good paying jobs, and pretty much anything and everything else.
That doesn’t make it right. And maybe, in some instances, it doesn’t make it legal.
I’m not a lawyer or legal expert so I don’t know what constitutes collusion or conspiracy. I can’t, and won’t, make any assumptions or accusations. What I can do is examine people’s words, their actions, and the resulting transactions and then, ask questions.
The Math Ain’t Mathing
When you look at the press articles surrounding this transaction, some things just don’t add up. Let’s look at a few pieces of the sequence of events:
January 9th 2014 - Wellmont announces it is looking for a strategic partner because they are in a great financial position, have invested in upgrading their electronic technology and medical records, and is looking for someone who can expand their current service line abilities.
January 16th 2014 - Mountain States Health Alliance announces that it is cutting 161 jobs throughout their system, including 18 at three hospitals in SW Virginia.
February 13th 2014 - Wellmont selects a national consulting firm, Kaufman Hall & Associates, to explore strategic partners.
May 16, 2014 - Alan Levine states that MSHA is “not likely to follow suit in the near term.” when asked about Wellmont’s search for a strategic partner and if Mountain States would consider something similar. He also refers to MSHA being a “local” system, successful as a “local” system, etc. several times. (note the “local” reference)
May 2016, 2014 - In the same Business Journal article, Levine states, “… financially, we’re strong.” in reference to Mountain States.
May 16, 2014 - A separate article in the same Business Journal issue Levine and Marvin Eichorn are discussing MSHA’s challenges and strategies. Over the last two years prior to the January 16th jobs loss announcement, MSHA had shed 700 jobs through attrition - more than 7 percent of its workforce.
June 10, 2014 - Wellmont CEO, Denny DeNarvaez, and its Board of Directors Chair, Buddy Scott state that three of the nine systems originally being included were eliminated because they “did not meet the guiding principles the board of directors established for the process”. The article also states several more months of research and discussion are needed before the board will determine final recommendations this fall.
Now, here’s where it gets interesting.
Two points to remember as you read this next points in the timeline of events:
Alan Levine said that Mountain States is ‘not likely to follow suit in the near term” in terms of looking for a strategic partner.
DeNarvaez stated in mid-June that several more months of research and discussion were needed before the Board could make its final recommendations in the fall. (“Fall” is widely considered to begin in September.)
To connect the dots effectively, we have to jump forward a bit and work our way back.
July 30th, 2014 - Wellmont announces they have narrowed the potential partner search down to three, including a “regional system”.
In an August 27, 2014 article, the banker leading the charge for a merger between Wellmont Health System and Mountain State Health Alliance, Bill Greene, states that the July 30th announcement by Wellmont comes roughly three weeks after he personally approached Wellmont CEO. DeNarvaez - then later, Wellmont Board Chair, Roger Leonard - about what he considered the lack of transparency in their search for a strategic partner.
Greene goes on to say that he asked both DeNarvaez and Leonard to meet with the major players in the region he calls the “hole-in-the-wall-gang” but that “They’ve never answered us that they would be able to do that,”.
Now, you may have noticed that the Wellmont Board of Directors Chairperson has changed. In June, it was Buddy Scott. By July 3rd, it was Roger Leonard. So, if Greene met with them several weeks before the July 30th announcement, it would have been within a week of Leonard being named the new Chair.
Here’s where things start moving fast.
August 11th, 2014 - Wellmont rolls our forwardwithvision.org website to provide more details about their search for a strategic partner and their process.
Around the same time, Greene and the “hole-in-the-wall-gang” launch their website saveyourhospitals.com. (site no longer active)
August 13th. 2014, the Kingsport Chamber of Commerce announces a public forum organized the Greene’s group, Save Your Hospitals, that will happen on August 18th. East Tennessee State University (ETSU) President, Brian Noland, Bill Greene, and Kingsport Mayor, Dennis Phillips, and Holston Medical Group founder, Jerry Miller, are among the speakers at the forum.
Let’s pause for a minute to explore a few things.
ETSU, Brian Noland, was mentioned by Greene as being one of the people “instrumental” to the “hole-in-the-wall-gang’s” COPA campaign. According to Greene, Brian Noland was present at the “hole-in-the-wall-gang” meeting where Alan Levine, CEO of Mountain States Health Alliance, “explained what it (the COPA) was all about and went over the financials of Mountain States,”.
An important piece to consider in the context of business interaction is that the Medical Education Assistance Cooperation (MEAC) is a private non-profit corporation established to support ETSU’s medical education-related objectives. ETSU is a state university. As such, it provides certain protections for their employees. Medical practice is not one of them. So, the physicians and health professionals often have dual (or more) employment contracts which means they are employed by ETSU for their academic duties and MEAC for their practice of medicine. You may know MEAC better under their DBA, ETSU Physicians and Associates.
The part that I question about Noland’s involvement is this: If Brian Noland is the President of ETSU, then he’s also the ex-officio President of MEAC/ETSU Physicians and Associates. Well, according to the COPA application submitted by Mountain States and Wellmont, ETSU Physicians is one of the top two competitors of Ballad Health.
Since when does the president of your competition join you in a meeting where you explain how your financial and how you can avoid antitrust regulations while merging with your competitor to become a medical monopoly??
Read that part again if necessary.
Remember, there’s no antitrust protections. As a matter of fact, Tennessee doesn’t yet have a Certificate of Public Advantage law. That doesn’t come until May of 2015 when Mountain State’s vendor and state senator, Rusty Crowe, sponsors the legislation for them.
We’ll dig deeper into that in another post.
So at this point, Wellmont’s Board Chair has been replaced, MSHA is now being considered in the search for Wellmont’s strategic partner, and a community forum has taken place because Greene doesn’t feel like he’s making any progress with the board.
Guess what happens next.
Wellmont CEO Denny DeNarvaez resigns with a $1.7 Million confidential severance package. Two other high level Wellmont executives, including the COO, follow suit in the coming weeks, also with private severance packages.
A month after leaving, Denny told WJHL that she “left Wellmont to remove herself from the lightning rod position as the organization moved forward with the merger process.”
September 15, 2014 - Bart Hove is named interim Wellmont President.
After reading all of this, you probably have lots of questions. I did too and I hope to answer them in the subsequent posts.
But the one question I’d like to know is when in all of this did Greene have 10 days to spend in the hospital with a bad case of cellulitis in his leg, recover, and then travel to Banner Elk, NC for a golfing outing with Alan Levine? Sounds like he was in remarkable shape for an 80-year old man. Biden should have no trouble then.
I hope you appreciate the humor.