Image Credit: tn.gov & balladhealth.org
On October 21st, retired healthcare executive Wally Hankwitz, MBA, LFACHE submitted a letter to the Commissioner of the Tennessee Department of Health, Ralph Alvarado, and others expressing concerns about the continuing state-approved monopoly of Ballad Health in Northeast Tennessee.
With Mr. Hankwitz’s permission, the letter is copied below verbatim.
Dr. Alvarado,
Recent reports indicate you are finally addressing some of the numerous issues posed by Ballad as a low-quality hospital monopoly in northeast TN by trying to renegotiate the COPA. The major question is “Why is this being done in closed-door negotiations after years of complaints and protests from patients and their families?”. Ballad is a public entity, and as such, public input must be sought and heeded prior to any contract finalization.
Your department has a notorious history of providing excessive leeway and exceptions succumbing to Ballad’s requests for ‘amendments’ to the COPA’s TOC. To para quote Dani Cook, “Ballad seems to never be held to account, and that’s why, when I look at this, I say, ‘Oh that sounds great.’ But let’s see what happens.” For example, in your September 24, 2024 letter to Alan Levine, you state “Ballad did not meet its commitment and obligation for Plan Spend in FY23 as expressed in Exhibit B of the TOC, Ballad did not notify us as required by TOC Section 6.05 of any potential or actual shortfalls in any of the Spending Plans.“ To quantify, per Exhibit B, the shortfall carried to FY24 for Behavioral Health Services and HIE Plan totaled $9,905,413
.
Your September 24, 2024 letter further states “FY23 is the third year under the TOC that Ballad has not met its Baseline Spending as required by TOC Section 3.01(b). Based upon the shortfalls above, we could take multiple actions as listed in TOC Section 6.05(d), including (1) prohibiting payments of bonuses or other incentive compensation above base salary to any executive officer; (2) requiring the COPA Parties to make a remedial contribution in the amount determined by the Department to the Population Health Initiatives Fund; (3) a COPA Modification or other listed actions.” But you don’t take any corrective action, you state in the letter “we will defer assessing Corrective Actions for this failure to at this time.” Per Ballad’s 2023 990 Schedule J, Ballad’s executives were granted bonuses in excess of $6.287million in bonuses. Your department never takes action to hold Ballad accountable, but rather continually allows (and even promotes) trophies for failure. Merriam-Webster defines ‘claw back’ as the reclaiming of money or benefits under special circumstances stipulated in a contract. It’s an effective motivator advocated in the COPA. Why has it not been used?
As your negotiations with Ballad are being conducted ‘closed-door’, there’s no knowing the amount of leniency you’ll continually allow in response to Ballad’s constant bloviation of hot air full of feeble rationale and excuses … especially if you’re using the most recent 4th Amendment to the original COPA as the basic core document. It’s fraught with numerous ridiculous exceptions exempting Ballad from carefully thought-out conditions that involved extensive public input prior to COPA approval. Based on that fact alone, your starting document for renegotiation should be the original COPA approved, before all the exceptions for Covid, objections to CONs, physician employment ratios, etc., that your department allowed over the last half dozen years.
A Ballad COPA Public Hearing is scheduled for November 21, 2024. That would be a good venue to solicit public input before you finalize the final renegotiated agreement by sharing your ‘closed-door’ draft via widely distributed media outlets by the end of this month and asking for feedback at the Hearing venue. Please also note that Ballad’s FY24 Annual Report to your department is due on October 28, 2024. Your prompt posting of that report on your website is requisite to review of Ballad’s performance this past year (post-Covid and pre-flood). An in-depth analysis of FY24 with prior years and the merger will undoubtedly be done by independent parties and shared at the Hearing, analyses your department has not done or publicized when performed by independent parties and provided to you.
One of the main drawbacks to a monopoly and CON is that it cuts out the competition and takes away choice from consumers. This means that customers can only get certain goods and services from one provider at the providers fixed price. Because there is only one player in the market, entities may abuse their power, increase prices, and provide poor quality customer service. “We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. – George Orwell”. Such is the case with Ballad, and it’s up to you to contain Ballad’s power. Do you have the courage and clout to ‘checkmate’ and contain Ballad’s power? Prove it. To date, you have failed.
Wally Hankwitz, MBA, LFACHE
Retired Healthcare Executive
