JOHNSON CITY, Tenn. (WJHL) – Rural hospitals in Southwest Virginia would have been at high risk of closing without efficiencies that came from the merger that created Ballad Health, a consultant told an oversight board in Southwest Virginia this week.

“We don’t know what would have happened if there had not been a merger between Mountain States and Wellmont, but it is hard for me to conceive that if those two legacy systems had continued as they were that they wouldn’t have been forced to close some of their facilities, probably rural hospitals, during the past year,” Dennis Barry told the Southwest Virginia Health Authority (SVHA) Wednesday.

“So I think that one benefit that we have seen from the merger is simply that we didn’t have a disaster occur in 2020.”

Barry said savings Ballad has gained after the merger of Wellmont Health System and Mountain States Health Alliance have helped it weather COVID-19 and even add services that help Southwest Virginians.

Barry told board members Ballad reported about $32 million in efficiency savings in the fiscal year that ended June 30, 2019 and another $28 million through eight months of the next fiscal year.

SVHA members help oversee the “cooperative agreement” the Virginia Department of Health approved in exchange for allowing the merger and the near-monopoly status it created.

The agreement is meant to ensure Ballad improves health care consumers’ access, price and quality compared to what would have occurred under the status quo.

Ballad CEO Alan Levine told News Channel 11 Friday it hasn’t always been easy for community members to accept the system’s service line consolidations and other efficiencies in its first few years of operation.

Those changes have drawn the largest outcry in Kingsport, particularly when Ballad announced it was closing the neonatal intensive care unit and Level I trauma center at Holston Valley Medical Center.

“At the time people felt mostly the negative effects of that but they didn’t yet see the positives that come when you do service consolidation,” Levine said.

“The consolidation of NICU resulted in us committing to a brand new NICU for the whole region. We couldn’t have done that if you were still dividing the volume between two smaller NICUs.”

But changes have also occurred in Southwest Virginia, where the population has been stagnant to declining for years and hospitals were vastly underutilized but kept open as Wellmont and Mountain States competed.

He cited the example of Wise County, which had three hospitals for a declining population. Ballad consolidated two obstetrics programs into one, for instance and also consolidated surgical/ICU services.

“We moved all those services to Norton Community Hospital and the benefit is that now you have more consistent coverage for surgery and call and you have better care for patients.

“Consolidating to one hospital where you have higher volume and more consistent coverage leads to better outcomes for patients.

“This is what the science and the evidence shows works best and I think that’s what Mr. Barry was talking about.”

Barry addressed the Wise County consolidations Wednesday, which he said were pre-approved in the cooperative agreement and probably helped lead to Ballad having enough resources to reopen the previously closed Lee County Hospital.

“Ballad has opened an urgent care center in Lee County in October 2019 and is on track to reopen Lee County hospital on July 1,” Barry said. “I know that’s a very welcome addition in that community.”

Levine said there’s no way the Lee County reopening could have occurred without the cost savings the merger has provided. And he said Barry’s comment about possible closures was accurate.

“We couldn’t do Lee County, we probably would have had to close one or both of the hospitals in Greeneville, Unicoi we couldn’t have done,” Levine said.

“There’s a few other hospitals, Russell County Virginia, Mountain View – there’s a lot of hospitals in our region that we subsidize that we would not have been able to continue subsidizing.”

Barry said in general, even with the pandemic, Ballad has made good progress toward many of its objectives.

He mentioned that the system slipped on some quality measures compared to its previous year’s report, though he said he anticipated that given the stress of the pandemic.

“Ballad is really focused on quality, but it is really, really important and for that reason I’m going to recommend to (board member and Virginia Senator Dr. Todd Pillion) that he have Ballad report back to the task force in a presentation on quality in the fall, perhaps September.

Barry also noted that Ballad hasn’t met spending requirements outlined in the agreement in either of the past couple of years. Those requirements are currently waived due to the pandemic, but he said they are important.

“It’s not an area we are worried about but it’s an area that we’re following very closely,” Barry said. “It is absolutely key to achieving the results that the states wanted when they entered into their agreements with Ballad.”