Despite years of patient complaints and quality-of-care concerns, Ballad Health — the nation’s largest state-sanctioned hospital monopoly — will now be held to a lower standard by the Tennessee government, and state data that holds the monopoly accountable will be kept from the public for two years.
Ballad is the only option for hospital care for most of the approximately 1.1 million people in a 29-county swath of Appalachia. Such a monopoly would normally be prohibited by federal law. But under deals negotiated with Tennessee and Virginia years ago, the monopoly is permitted if both states affirm each year that it is an overall benefit to the public.
However, according to a newly renegotiated agreement between Ballad and Tennessee, the monopoly can now be considered a “clear and convincing” benefit to the public with performance that would earn a “D” on most A-to-F grading scales.
And the monopoly can be allowed to continue even with a score that most would consider an “F.”
“It’s an extreme disservice to the people of northeast Tennessee and southwest Virginia,” said Dani Cook, who has organized protests against Ballad’s monopoly for years. “We shouldn’t have lowered the bar. We should be raising the bar.”
The Ballad monopoly, which encompasses 20 hospitals and straddles the border of Tennessee and Virginia, was created in 2018 after lawmakers in both states, in an effort to prevent hospital closures, waived federal antitrust laws so two rival health systems could merge. Although Ballad has largely succeeded at keeping its hospitals open, staffing shortages and patient complaints have left some residents wary, afraid, or unwilling to seek care at Ballad hospitals, according to an investigation by KFF Health News published last year.
In Tennessee, the Ballad monopoly is regulated through a 10-year Certificate of Public Advantage agreement, or COPA — now in its seventh year — that establishes the state’s goals and a scoring rubric for hospital performance. Tennessee Department of Health documents show Ballad has fallen short of about three-fourths of the state’s quality-of-care goals over the past four fiscal years. But the monopoly has been allowed to continue, at least in part, because the scoring rubric doesn’t prioritize quality of care, according to the documents.
Angie Odom, a county commissioner in Tennessee’s Carter County, where leaders have clashed with Ballad, said she has driven her 12-year-old daughter more than 100 miles to Knoxville to avoid surgery at a Ballad hospital.
After years of disappointment in Tennessee’s oversight of the monopoly, Odom said she was “not surprised” by Ballad’s new grading scale.
“They’ve made a way that they can fail and still pass,” she said.
Virginia regulates Ballad with a different agreement and scoring method, and its reviews generally track about one or two years behind Tennessee’s. Both states have found Ballad to be an overall benefit in every year they’ve released a decision.
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Neither Ballad Health nor the Tennessee Department of Health, which has the most direct oversight of the monopoly, answered questions submitted in writing about the renegotiated agreement. In an emailed statement, Molly Luton, a Ballad spokesperson, said the company’s quality of care has steadily improved in recent years, and she raised repeated complaints from the hospital system about KFF Health News’ reporting. The news organization has reviewed every complaint from Ballad and has never found a correction or clarification to be warranted in the coverage.
Tennessee Health Commissioner Ralph Alvarado, who has more than once described the regulation of Ballad Health as a matter of national importance, has declined or not responded to more than a dozen interview requests from KFF Health News to discuss the monopoly.
“Our effort and progress serve as a model for health care in Tennessee, the Appalachia Region, and the entire nation,” Alvarado said in a May news release about the monopoly, adding, “We do not take our role lightly as we remain committed to transparency in our COPA oversight.”
Tennessee’s revised agreement was negotiated behind closed doors for more than a year and announced to the public in early May. As part of that announcement, Tennessee said it wouldn’t score Ballad next year, to give the company time to adjust to the new scoring process.
Under that process, the minimum score Ballad needs to meet to show a “clear and convincing” public benefit has been lowered from 85 out of 100 to 70 out of 100. The new agreement also awards Ballad up to 20 points for providing Tennessee with data and records — for example, a report on patient satisfaction — regardless of the level of performance documented. The state can also raise or lower Ballad’s overall score by up to 5 points in light of “reputable information” that is not spelled out in the scoring rubric.
Therefore, Ballad can score as low as 65 out of 100, with nearly a third of that score awarded for merely giving information to the state, and still be found to be a “clear and convincing” benefit to the public, which is the highest finding Tennessee can bestow, according to the agreement. And Ballad could score as low as 55 out of 100 without the monopoly facing a risk of being broken up, according to the new agreement.
The agreement also increases how much of Ballad’s annual score is directly attributed to the quality of care provided in its hospitals, from 5% to 32%. But the agreement obscures how this will be measured.
Tennessee sets “baseline” goals for Ballad across dozens of quality-of-care issues — like infection rates and speed of emergency room care — and then tracks whether Ballad meets the goals. The new agreement resets these baselines to values that were not made public, leaving it unclear how much the goals for Ballad have changed. Health department spokesperson Dean Flener said the new baselines would not be disclosed until 2027.
Cook, the longtime leader of protests against Ballad, said she believes Tennessee is attempting to silence data-supported criticism until the final year of the 10-year COPA agreement, which ends in 2028.
By then, any outrage would be largely moot, she said.
“If you are going to wait until the last year to tell us the new measurements, why bother?” Cook said. “It is clear, without a shadow of a doubt, that the Tennessee Department of Health is putting the needs and concerns of a corporation above the health and well-being of people.”
