Alan Levine is the President and CEO of Ballad health, the innovative integrated healthcare delivery system that serves 1.2 million people in 29 rural counties of Northeast Tennessee, Southwest Virginia, Northwestern North Carolina, and South Eastern Kentucky. Alan is a longtime friend who is re-imagining our nation’s approach to non urban and rural care with impressive results.
Alan Levine: It isn’t about just running hospitals; that’s not our business. We really want to be a health improvement organization that’s designed to transform our region so we’ve become a place people want to move to, want to grow a family, want to work, want to place a business; all these things, a health system should be able to contribute towards. We shouldn’t just be sitting there waiting until people get sick and cross our doors.
Bill Frist: You’re listening to a second opinion, your trusted source engaging at the intersection of policy, medicine, and innovation, and rethinking American health. Before we get started, I want to thank our sponsor. A Second Opinion is powered by PYA, providing healthcare insights and strategy for nearly 40 years. Learn more in PYAPC.com.
Bill Frist: Alan Levine is the President and CEO of Ballad health, the innovative integrated healthcare delivery system that serves 1.2 million people in 29 rural counties of Northeast Tennessee, Southwest Virginia, Northwestern North Carolina, and South Eastern Kentucky.
Bill Frist: Alan is a longtime friend who is re-imagining our nation’s approach to non urban and rural care with impressive results. I’m your host, Senator Bill Frist, welcome to A Second Opinion. Ballad Health. Where did it come from, what is it, and start with the magnitude to give our listeners a feel of what we’re talking about?
Alan Levine: Well, I came to Tennessee about six years ago, and I came to work for a system called Mountain States Health Alliance, we had 14 hospitals, and our competitor was [Wellmont 00:01:49]. Both were excellent systems, Wellmont had six hospitals, and Wellmont was beginning to go through a process of looking for a partner. Because like many health systems in the country, they were they realized that they couldn’t do it on their own anymore.
Alan Levine: And, of course, Mountain States was sort of in the same position. You’re in a rural region with all these hospitals declining use rates, all the pressures that hospitals faced. One hospital had been closed, Lee Regional Hospital in Southwest Virginia. There were several others, four or five hospitals that were on the bottom of the bubble in terms of closure.
Alan Levine: So you had all these hospitals that were failing, financially, and then you had some markets like Wise County, Virginia, for instance where you had three hospitals serving a community of 40,000 people. You had five general surgeons that did a great job of doing amputations of people who are diabetic, but that community didn’t have an endocrinologist.
Bill Frist: No.
Alan Levine: And so system was behaving exactly how the payment system designed it to behave. And so we came up with the idea of saying, “What if we brought all these assets together, eliminated the unnecessary duplication?” Here you’re in a rural region that has two level one trauma centers and a level two trauma center. Miami Florida has one level one trauma center, Nashville, Tennessee has one level one trauma center.
Bill Frist: Yeah.
Alan Levine: Two level three NICUs 20 minutes apart. First of all, the evidence shows that that doesn’t deliver the best quality, and it costs a lot of money and, frankly, it was driving these hospitals into financial insolvency. So we proposed to bring them together, our feeling was based on our analysis if we did this, we could save several hundred million dollars of unnecessary costs from eliminating duplication, and then reinvest those synergies into things that are really needed.
Alan Levine: So for instance, recruit more physicians that are needed in those communities so you don’t have a mismatch where you have five general surgeons, but no endocrinologist where you’re really good at amputations, but you’re doing nothing to prevent the amputations. Or you have another community like Greenville, Tennessee, where you have two rural hospitals with less than 20% capacity that had lost $50 million; both hospitals were financially insolvent.
Alan Levine: Well do you need two hospitals replicating each other and putting themselves out of business, or do you find a way to consolidate and then repurpose one of the two hospitals into something that’s really needed? So for instance, the opioid problem and addiction are a huge issue for our region, so why not convert the other hospital to a residential facility for women who are pregnant, who suffer from addiction or homelessness? Where now you provide safety, food security, housing security, and you take those issues off the table so now you can actually treat the addiction, if you have literacy problems, or if you have workforce training, or parental training, things that can reduce the need for children to go into foster care.
Bill Frist: Take me back just to those early days. Everything that you just said makes so much sense, and I know you’re capturing that, you’re realizing that today. But it’s hard to do, and how do you take that first step, how do you pull people to the table? If there’s one thing all of our listeners and viewers know is that health and health care argues for the status quo, everybody doesn’t really want to change things because they don’t want to give up what they have today.
Alan Levine: Right.
Bill Frist: So you’re asking a lot from people. And before we get to how did you do it, describe a little bit what it took. Because you’re in multiple states, you’re in 29 … How many counties?
Alan Levine: 29 counties.
Bill Frist: In 29 counties, your population is-
Alan Levine: About 1.2 million people, and the geography’s the size of New Hampshire.
Bill Frist: And all of this just on a map again for imagery, is all Northeast Tennessee, and West Virginia-
Alan Levine: Southwest Virginia.
Bill Frist: North Carolina, Southwest Virginia.
Alan Levine: Mm-hmm (affirmative).
Bill Frist: And so four states, and so we’re talking about putting all that together with regional planning, regional engineering in the sense of looking at system, getting rid of the waste, and the duplication. So I just said it, but even that, how do you get to that? You had to pull people in room, and get them around the table and say, “You got to give up something and come on board.”
Alan Levine: Well you know it actually started from a conversation I had with a business leader, the founder of Bank of Tennessee, a gentleman named Bill Green.
Bill Frist: Yeah.
Alan Levine: He and I were talking about how the employers are tired of paying for all this marketing and competition between the two systems where everything was duplicate, and both systems were financially struggling. And we talked about what if … There’s this thing called state action immunity under federal antitrust law, where states are the innovators, and states are where policy occurs. And so we said, “Well what if we went to the state of Tennessee and the Commonwealth of Virginia where all the hospitals are actually located, and we propose bringing them together under state supervision?” And Mr. Green and other business leaders took the mantle.
Alan Levine: This actually was created because the business community, that’s paying for the cost of all this, demanded something different. This was not something that just we woke up and said, “We’re going to go do it.” It took a concerted effort of Eastman Chemical, Bank of Tennessee, chambers of commerce, all the municipalities, they all came together and said, “We want this.”
Alan Levine: And so the legislature … And it took getting legislation passed in Tennessee and in Virginia. It took a Democrat governor in Virginia and a Republican governor in Tennessee to sign the legislation. It took the Attorney Generals in both states, one a Democrat one a Republican to approve it, and it took two health commissioners, from two states to approve it. It was not for the faint of heart. I mean it-
Bill Frist: This podcast is centered around this intersection of health, and policy, and doing things in a new way, innovation, and this is really a perfect example of that. And it means we all got to get out of our own little sphere. If you’re a doctor, you got to get out of your sphere. Hospital administrator, you got to get in the policy world, and you got to get in this new world of innovation.
Bill Frist: And what you’ve just described takes you into that intersection. Give one more crack at it. So you had to pull all these people together, in a unique way, in a region. The what, in terms of pulling them together? It was business leadership initially-
Alan Levine: Mm-hmm (affirmative).
Bill Frist: And then policy makers who were receptive to that?
Alan Levine: Yes.
Bill Frist: And then pulling them in with legislation?
Alan Levine: Yeah, and it’s such a different idea that a lot of people recoiled initially, as the policymakers, “And you want to do what?” But when you talk about the policy, it made perfect sense.
Bill Frist: Yeah.
Alan Levine: But most people, they recoil when you think about eliminating competition. But in health care, particularly in rural areas … And, of course, the Bipartisan Policy Center put out a report just this month where they say the issues of competition in rural areas are very different than in urban and suburban areas.
Alan Levine: So, to some degree, there’s an old saying, “It wasn’t the pioneers that settled the West, it was the ones that came after the pioneers that took the arrows out of the backs of the pioneers and settled the West.” In some cases, I feel like that pioneer, where we were the first ones to step out there and say, “We need to do this.”
Alan Levine: And did it with fierce opposition from the Federal Trade Commission, they did not want it to happen they opposed it, they testified against it. But both governors, both state legislatures, both health commissioner said, “You know what? This is the right policy for Virginia and Tennessee.”
Alan Levine: And I will tell you the things that have had to happen, Senator, since doing it, it wasn’t just convincing the policymakers. Even the bond rating agencies that hold our debt … We have $1.4 billion of debt. The bond rating agencies, they had to look at all this and think, “Does this make sense?”
Alan Levine: Well we got upgraded by all three rating agencies, both systems historically had B rated, B double A1 bonds with Moody’s, and S&P and Fitch had us at below A rating. Fitch and S&P upgraded us to A rating, and Moody’s gave us a positive outlook. Everyone who understands the implications of what we’re doing understood the policy reasons why it made sense. The question was could we execute? And the execution’s the hard part.
Bill Frist: And let’s go back to the execution, because you’re exactly right. And I know you’re right in the middle of that, and you could talk a little bit about the success today, and the challenges today. But before we doing that, let’s go back and look at rural health. It’s different than with urban health and health delivery.
Bill Frist: The challenges are different yes, both urban, suburban, and rural have issues of chronic disease, we all hear that, and it’s aggregated together. And it’s heart disease, and lung disease, and asthma, and chronic obstructive pulmonary disease, diabetes, the obesity epidemic, and all of that.
Bill Frist: On top of that, you’ve got the opioid epidemic which started in the mid 1990s. It’s had one sort of big wave, and then now we have the fentanyl wave, and returning to methamphetamine. And that has a unique flavor to it in the rural health. Then you have the lack of social structure there. If you had to give sort of three or four things that are unique about the rural health populations of healthcare that distinguish it from urban, what would that be?
Alan Levine: Well, I think there’s sort of a three legged stool that’s creating a crisis in rural America in terms of both health and the infrastructure for health. Number one, the movement towards value-based care, the alternative payment models, by definition that’s destructing the demand for inpatient services in hospitals, so you’re seeing a decline in use rates.
Bill Frist: Mm-hmm (affirmative).
Alan Levine: When you couple that in rural areas where you have no population growth, so you have declining use rates and no population growth, which means you have declining business. By definition, that’s a business model that’s destined to fail, right?
Bill Frist: Yeah.
Alan Levine: So that’s why I said some rural hospitals have been predicted to close, and why so many have closed. But then you add to that the third leg of that stool which is the real disproportionate number and amount of social determinant issues: poverty, geography distance to services, food insecurity, housing insecurity, all of those things combined, and then you add to that the opioid epidemic.
Alan Levine: And when I mention social determinants, there’s really two parts. You have the population that’s there today experiencing the social determinant issues: addiction, drug addiction, alcoholism, things like that, inability to pay for simple medications because they can’t afford it.
Alan Levine: But then you have the root cause social determinant which is in the first three years of life, so many issues affect those young children. If you’re in a rural region where you have a high rate of addiction, and you have a woman that’s pregnant, and there’s nobody there working with her to help get that baby born in a healthy setting as possible, trying to avoid abuse, neglect, addiction, illiteracy; all of that has to start happening before that baby’s born.
Alan Levine: We’re actually going to focus on that, that’s something that’s very unique, it hasn’t been done at the scale we’re about to do it, but that’s the policy reason for Ballad Health. It isn’t about just running hospitals; that’s not our business. We really want to be a health improvement organization that’s designed to transform our region so we become a place people want to move to, want to grow a family, want to work want, want a place a business.
Alan Levine: In order to do that, you got to provide a workforce, you got to have a high workforce participation rate; all these things a health system should be able to contribute towards. We shouldn’t just be sitting there waiting until people get sick and cross our doors, and that’s the policy reason for it.
Bill Frist: I want to come back to a lot of examples, because it’s fascinating in terms of what you’ve been able to accomplish. And it’s not what a typical hospital administrator or a doctor would turn to, initially, because it does get into these non-medical, impactful determinants. They start very young, and education’s something that you and I care both a lot and work together on is where a lot of it starts, and goes into those deeper roots of poverty and equity issues.
Bill Frist: But that does come to how does it get paid for? And most people will turn right around, whether it’s a provider of some sort at any particular level, or a hospital, or a doctor, or a nurse; there’s just not money there, we just don’t have the money. We would love to be able to do all that, we know it’s important. We’ve got to focus on what we’re doing, we can’t expand into these social determinants, into the community, into schools, and into the preventive things.
Bill Frist: People say, “Oh we want to and our heart’s there.” So how do you get that into the reality? Is it a payment issue, have you figured out some way to change the payment, or the systems, or the flow of resources are there?
Alan Levine: You know that’s a great point, Senator. We’ve been active participants in the transformation to value based care. We have one of the accountable care organizations in the country, and one of only 18 that has generated savings for the taxpayers in every year of the program.
Bill Frist: Yeah.
Alan Levine: More than $50 million that we’ve saved for taxpayers, which is great except it’s destructive to our bu- … We’re destroying our own business. And so a lot of people don’t understand and this is so complex. The part that has frustrated me the most is that it’s hard to explain to people. When you talk to somebody about the fact that we don’t need to level one trauma centers within 20 minutes of each other, that’s hard for folks to understand, and I get that, “I had something, now I don’t.” And that’s a hard thing for-
Bill Frist: So let’s play that out a little bit. Because I’m sitting there, the trauma center is six blocks from me. My biggest concern in life is safety and security for my kids and my family. And then somebody such as you comes in and said, “We’re going to take that trauma center away.”
Bill Frist: So we get it, and I know you get it, and it is scary, because in your mind that means you’re taking away my safety. So how do you come back and respond to that? Because I know you’ve had to do it again and again to make a systematic, value driven, safety driven system really work. But what is your response to that?
Alan Levine: Well, and in fact, our region still has three trauma centers. What we did was we created a regional trauma system; before we didn’t have one. We had three independently operating trauma centers that were replicating all their efforts. We created a regional system where you have one level one trauma center, you have two level three trauma centers, and so the access hasn’t changed.
Bill Frist: Yeah.
Alan Levine: All three are still seeing trauma, but the real major trauma, where you need those high end specialties for the most serious of trauma, that’s being provided in one hospital for the whole region; which looks more like, frankly, the best practice trauma systems all over the country. But the results have been good, Senator, and that’s the key.
Alan Levine: We’re focused … And you’re right, while we’re trying to do all these things, we can’t forget about our core business, which is to take care of people who need our services. So the state and we agreed on 17 target quality measures. Because one of the knocks on consolidation is hospital systems consolidate promise to improve quality but then they don’t.
Alan Levine: Well of the 17 target quality measures in the first two years since the merger, 12 of them have improved. Some of them so dramatically we had to double check to make sure it was accurate. But like C. Diff, hospital acquired infections, we’ve reduced by more than 40%. Post operative sepsis, we’ve reduced it by almost 50%.
Alan Levine: Instead of everybody focused on, “We’re going to steal each other’s doctors, we’re going to try to replicate what we’re all doing.” We created a clinical council with 40 doctors from all over the region, they meet and they focus on helping us achieve those quality objectives.
Alan Levine: The year we merged, we had $11 million of operating income. Even while we’ve reduced our admissions by 5,000 under value based care, losing $50 million of top line revenue, we went from 11 million of operating income to 40 million of operating income by eliminating all that duplicative cost.
Alan Levine: So it used to be people thought to get better quality it had to cost more; it’s the opposite. The value equation is value equals quality over cost. You reduce cost and focus on quality, and you create more value, and that’s what Ballad is doing. And that’s irrefutable the data is very compelling and. And I’m proud of our doctors, I’m proud of our team members they’re the ones doing it.
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Bill Frist: PYA professionals take their responsibilities seriously because they keep in mind beneath all the complexity is a patient in a room, with the doctor, and that’s what really matters. Learn more at pyapc.com. And now back to the episode. Tell me rural areas; I mentioned in the opening some of the problems there. Let’s talk about workforce.
Alan Levine: Mm-hmm (affirmative).
Bill Frist: You have rural areas that you need the human capital, and it may be community health. The workers may be nurses, it may be doctors, it may be specialists, or access to specialists. How successful have you been in terms of bringing workforce to rural communities with telemedicine, and telehealth and virtual care? We talk about the technology later, and how successful have you been to date?
Alan Levine: Well, on the physician side, hugely successful, and we’re actually investing upstream. We now have communities that didn’t have … For instance, we have orthopedics now in a couple of rural communities, we have cardiology spread throughout the whole region. We’ve recruited endocrinologists, urologists; specialties that are very hard to recruit.
Alan Levine: We’ve also funded an Addiction Medicine Fellowship Program at East Tennessee State University so that we can start growing our own addiction medicine physicians. We’ve invested in a master’s program in addiction counseling and Milligan College so that we can get more folks who do mental health counseling for addiction; so we’re investing in the training of these folks.
Alan Levine: Obviously, there’s a huge nursing shortage. We’ve got a partnership with East Tennessee State University where we’re training almost 100 nurses that are training at Holston Valley Medical Center in a special program. What we hear from the doctors that we’re recruiting in; so many of them are so incredible.
Alan Levine: And what they tell me is the difference maker for them in choosing to come with Ballad, is that we have a purpose beyond them showing up in a clinic and seeing patients. What I talked about with strong starts for children, identifying children with adverse childhood experiences. We’ve recruited two pediatric surgeons, both of whom said that’s why they came.
Alan Levine: We have a family practice doctor who has … He was very mission driven, and he came out of ETSU, he came to meet with me, personally, to tell me that he was choosing to stay in the region because he believed so much in what we’re trying to do as Ballad. So I think Ballad having a purpose beyond just being a hospital system is drawing people to us. And there’s been a lot of negative publicity out there, there’s been a lot of folks that have expressed opinions, some-
Bill Frist: And, again, to help educate, because this is not easy.
Alan Levine: No.
Bill Frist: And to go from a [inaudible] for service competition, barriers, non-alignment world, it’s really hard to do. If you had to package the three or four biggest complaints that you have to answer, and they could be … I could say challenge, I say whatever. But in truth people say, “It’s just going in the wrong direction.” And that you’ve had to overcome, what would they be? So a one, two, three?
Alan Levine: Well the biggest one was is when you change services in a community.
Bill Frist: Yeah.
Alan Levine: When you downgrade a trauma center, or close a NICU, or consolidate services between hospitals, or even close the inpatient services at a hospital to consolidate; those are all very difficult. Now we’ve learned along the way, when we first rolled out the trauma and NICU changes, we learned a lot about that communications is really important. And we’ve gotten a lot better at reaching out to communities and sort of trying to over communicate before we make those decisions and execute on them.
Alan Levine: So look, we’re human, we make mistakes too, and the biggest mistake we made along the way was poor communication early on. But you know what’s interesting? A lot of the things people are complaining about are issues that existed before, but people are now woken up because of the merger, and all of the news. So all of a sudden, things that were a problem before, people assume that Ballad created those problems.
Alan Levine: For instance, ER wait times. ER wait times at a couple of hospitals are a problem for a lot of reasons. A lot of patients that come in with mental health issues where we have to hold them because there’s no services available, which occupies staff time and creates a log jam, and creates waits, or the nursing shortage creates wait time. So those wait times were there before, and actually they’re better now, but anytime people have a complaint like that they-
Bill Frist: Yeah.
Alan Levine: Assume it’s because of the merger.
Bill Frist: Yeah, attribute it to the merger.
Alan Levine: Yeah and that’s been-
Bill Frist: Yeah.
Alan Levine: The hardest part is these are problems that did exist; and they’re right. When they complain about some of those things, they’re actually right that those are problems. But those are not problems created by the merger, those are problems that existed with the healthcare system before that we’re trying to resolve.
Bill Frist: You’re unusual in the sense that you have this system together across state borders in four states, and most of it is Tennessee, but four states. Are there particular problems that arise because of the state border issues?
Alan Levine: No, I think the Department of Health in Virginia and the Department of Health in Tennessee are supervising this. Under federal law, to be able to do this, you have to have … To meet the requirements of antitrust law, it has to be the policy of the state to permit the elimination of competition, and then it has to be actively supervised by the state.
Bill Frist: Mm-hmm (affirmative).
Alan Levine: Both Virginia and Tennessee authorized this, so both of them are actively supervising, but they really are kind of working together. But as you go into this, there’s a lot of … You don’t know what you’re getting into, and so the documents that created this, there’s a lot of complexity in the regulation.
Alan Levine: We have three [COPPA] monitors. We have a local advisory council in Tennessee, a health authority in Virginia, a subcommittee of the health authority in Virginia, two commissioners of health, two attorneys general, and an internal COPPA compliance officer. The cost of compliance for all this is about $5 million a year, and I think both states recognize that that’s not sustainable over time.
Alan Levine: But the good news is I think everybody’s trying to make this work. The state’s role is to make sure they protect the public, and that they sustain access in these communities, and it’s high quality access; we want that too. And our board … We have a board made up of 11 people who live there, who raise their families there who, God forbid, when they get sick, they’re going to have to rely on the services in those hospitals; they want the best possible care for the community as well. And, at the end of the day, it is working and I think both states have concluded that it is working.
Bill Frist: Give me some examples of things you’re excited about. The world of innovation, things you’ve been able to do, because of this more regional system-wide approach. The recognition, the prevention’s important, the social determinants, or non-medical determinants are important, starting, you mentioned, third grade education. Give me several examples of the things that excite you that you really know are going to be important investments, but they’re already working-
Alan Levine: Oh-
Bill Frist: To improve health and well being?
Alan Levine: I’m super excited about some of the things we’ve already done-
Bill Frist: Yeah.
Alan Levine: And some of the things that are yet to be done that we’re working on. Just to go down the list number one, we’re now in 108 schools with telemedicine. So parents, when their child is sick, they don’t have to run to the school, leave work to pick their kid up, we actually have connectivity to our urgent care from the school, so the school nurses can deal with the children right there.
Alan Levine: Every one of our hospitals has telemedicine connectivity to our children’s hospital so that no matter where a child goes, there’s connectivity immediately to pediatric specialists that are available to that rural hospital.
Alan Levine: We’re building two new pediatric emergency departments, one in Bristol and one in Kingsport; excited about that. And 17,000 pediatric visits now benefit from pediatric ERs that our specialty driven by physicians that are programmed to take care of kids.
Alan Levine: We’re starting a dental residency program in southwest Virginia that’ll serve the rural region in Tennessee and Virginia. We funded … And this is something I’m super proud of for our whole region, we funded $15 million to create the Center for Rural Health and Research at East Tennessee State University.
Alan Levine: One of the top universities creating physicians for rural communities in the country, we now have the Center for Rural Health and Research housed at a top 10 public health school in the southeast, and the state, Governor Lee, matched our contribution with $10 million of state funding. So now, that’s a 70% return on our investment right off the top. They’re gonna do cluster hires for research. Well within five years, that center could be doing 50 to $100 million a year in research that can serve the entire country, and-
Bill Frist: A great resource for everyone, yeah.
Alan Levine: So we created something that the entire state of Tennessee is going to benefit from.
Bill Frist: And maternal child health, are you doing anything unusual in that regard?
Alan Levine: Oh yeah, back to what we talked about earlier, and elevator speech here. But in our region we have more than 50,000 people out of the workforce. And the reason for that is there’s addiction, there’s alcoholism, they didn’t finish high school, college or career ready because they couldn’t read at grade level at the third grade.
Bill Frist: Yeah, yeah.
Alan Levine: We decided, as a health system, “Let’s focus on the root cause. From an innovation standpoint, why don’t we try to break that cycle?” We believe that the best way to grow the region, economically … And this is the confluence of economics, policy, and health care. We know if you can get every 18 year old college or career ready, you know you’re creating the opportunity to close the poverty gap, which is that one thing that leads to higher health care costs.
Bill Frist: Yeah.
Alan Levine: Well how do you do that? Well as the science shows third graders that read at grade level are more likely to graduate high school, college, or career ready. You know that if you want to get to third grade reading, kindergarten readiness is critical. Well now you’re in our territory because we deliver every baby in the region.
Alan Levine: So now let’s work with our physician colleagues to do assessments of these moms, while they’re pregnant, to determine what are the risk factors for these children to have adverse childhood experiences. We’ve created the largest accountable care community in the United States, right there in Northeast Tennessee in Southwest Virginia.
Alan Levine: We have 270 organizations: churches, law enforcement, schools, businesses, United Ways all participating with us; we funded it. What we’re going to do is we’re going to identify every one of these children, every one of these moms where there’s risk factors, and we’re going to link those mothers to be up with services that help make sure that when that baby’s born, there’s a support structure in place to avoid that child going into foster care, to make sure that child shows up kindergarten ready by the time they’re kindergarten age.
Alan Levine: And we know, over time, we can study this at the Center for Rural Health and Research that we’ve created in the state, and share our knowledge with the rest of the country; this has not been done. You’re a cardiovascular surgeon, you know the Framingham Project has done a lot to contribute to the field of cardiology.
Alan Levine: What we’re going to be doing, what we’re going to be announcing is an initiative very much similar to the Framingham Project, where people from all over the country … Harvard University’s already reached out, they want to work with us. University of Virginia, we’ve got partners, calling us about wanting to collaborate to study this and learn so that we can share our knowledge.
Alan Levine: Governor Lee, when he ran for office, and talking to him when he actually attributed this to advice you gave him, “We got to stop chasing bright shiny objects. We’ve got to pick a policy that we believe will, over time, reduce healthcare costs and reduce poverty.”
Alan Levine: You got to have patience with that policy, implement it, get everybody focused on it, and get everybody to collaborate long term. And in 20 years, we should see the result through an improved workforce, and a state that’s growing.
Bill Frist: Yeah, consolidation, lack of competition. We hear so much about prices going up because of consolidation. There’s good data in areas that if happens, you had the FTC, the Federal Trade Commission, come in and I’m sure that was their argument, I don’t know, but I assume that their argument as well. That giving you so much control, that eliminates competition and, therefore, prices will go up.
Bill Frist: You obviously won that battle, but what assurances are there that by having all of this … And even though it’s a grand vision, but to pay for all of this, you got all of a sudden, with no competition, just raise those prices?
Alan Levine: That’s a great question, and I respect the FTC, and even as they opposed us, I never once-
Bill Frist: Yeah.
Alan Levine: Criticized them; I do believe they need to modernize their approach. Rural and non-urban America is very different than highly con-, than markets like Nashville where you have a lot of critical mass in terms of people. The only thing I could do is point to the facts; number one, we actually lowered our pricing.
Alan Levine: We have 850 employed physicians, all of our physician practices, we reduced our pricing by 17%, we increased our uninsured discount to 85%; and there’s a reason we did this. By lowering the cost for physician services, we’re trying to move patients from going to the ER for things that can get taken care of at an urgent care or at the doctor.
Alan Levine: The problem with what the FTC has done is they look at pricing, pricing is not any … That’s not the metric anymore; it’s total cost of care. Actually we have reduced the cost of care in our region. Washington County, Tennessee, for instance, one of our largest employers. The mayor of Washington County sent us a letter about three or four months ago, he said because of what Ballad Health is doing to reduce unnecessary utilization, and move business away from high cost areas like the ER, their health care costs for their employees has actually decreased by 10%, and their insurance premiums have actually gone down.
Alan Levine: We’re seeing, in the data from insurance data that we get, that that’s happening for multiple employers. If you’re just looking at price, and you’re not looking at the total cost, you’re not looking at the right thing. The entire movement toward value based care and alternative payment models, the rest of the policy world is moving toward total cost of care, the FTC is still looking at per unit pricing.
Bill Frist: Yeah, that’s a great description, great description. You’ve had an interesting career, you and I worked in other areas in education, K through 12 education, and both passionate about that. And when we started it, Tennessee was probably 47th, 48th in the nation, and now we’re about 25; a long way to go, but it shows that progress can be made in K through 12 education.
Bill Frist: Health, the same sort of thing. Our overall public health population in Tennessee is not good. And I say that embarrassed in many way because the ecosystem of health services like where we’re sitting now in Nashville, Tennessee, is all over America and doing great things with high quality and efficiency.
Bill Frist: Yet we look at Tennessee, lots of different reasons, and Tennessee’s being a rural state, and that’s why this discussion, I think, is so fundamentally critical and important for not just you and I to have, but people all over America to have. As we bring things a little bit to a close now, and we look ahead, are there three or four things, or policies that give you hope and optimism that, “Yes, we’re moving in the right direction?”
Alan Levine: I gained my passion when I left the private sector the first time to go work for a person we both admire, that’s Governor Jeb Bush when he was governor of Florida.
Bill Frist: Yeah.
Alan Levine: And I learned from him that you have to have an urgency about everything you do. If you want to move the needle, and if you want to make an impact, you got to act with urgency. And education and health care are two areas I’m very passionate about because I think they go hand in hand.
Alan Levine: More education leads to more opportunity, which leads to less poverty, which leads to lower healthcare costs, period; that’s the formula. And I’m inspired by Governor Lee and, frankly, the policies of Virginia that recognize that particularly rural areas, you’ve got to approach the rural communities differently, and I think most states have moved in that direction; I’m very encouraged by that.
Alan Levine: Governor Lee proposed a $250 million fund for mental health. Think about this, we’ve invested to be, through telemedicine, in 108 schools in our region, we’ve already made that capital investment. Now, they’re going to put a $250 million fund in place where they’re going to make investments in mental health for students K through; we’ve already put the infrastructure in place.
Alan Levine: So the incremental cost of doing what they want to do from a policy standpoint, that gives me such hope that there’s a link between the policies of our governor and the things we’re doing in the marketplace. The extension of Medicaid services for women postpartum up to one year post delivery, they just created a sustainable model for our residential services for women who are pregnant and drug addicted. We now have a way to get them reintroduced back into the community in a safe, secure way, so they can take care of their children.
Alan Levine: And so I have a lot of hope that this can happen, and I attribute … Look, I lost my mother when I was five years old; my mother died, very suddenly, of a brain aneurysm. And I always wanted to be a doctor until I took freshman chemistry in college; cured me of that.
Bill Frist: Yeah, [inaudible] many.
Alan Levine: But I learned from the experience of losing my mother, my father remarrying, and dealing with the trauma that came with that that adverse childhood experiences is a real thing, and the things that your brain does to program you to protect you as a child, those things carry with you the rest of your life.
Alan Levine: And we now have enough science to realize that if we don’t try to deal with that at a young age for those children, we’re disadvantaging those kids all the way through. And I’m really excited that we’re going to do this, I’m excited that people are excited that we’re going to do it, and I think we’re going to gain a lot of momentum.
Alan Levine: So Ballad Health is a manifestation of years, and years, and years of irrational behavior in the marketplace. I’m hoping that in 10 years, people look back and say, “That was the beginning of something special.” I’m not saying it’ll work in every part of the country, but I do think it’s unique to us, and I think it’ll work for us.
Bill Frist: And I think that for our viewers and listeners, is a great case study that I’m glad that we’ve had the opportunity to introduce to 10s of thousands of people, just so that they can follow it say, “It’s unique.” It’s regional, it’s not federal, it’s homegrown, it crosses state borders, it looks at systems approach, it takes out the friction and makes the care more seamless, it recognizes that social determinants are important, it starts really sort of cradle to grave the way you’ve described it, and at the end of it, it’s value based, it’s got that quality denominator that you shine a light on it while you manage those costs; so I think it’s great.
Bill Frist: Not an experiment, but the innovation and creativity that you and your team have put together is something the nation will watch, should watch, and then go, not just to scale here, but others can learn from as well.
Alan Levine: Yeah, and we’ll continue to learn as we go to; we’ll make mistakes.
Bill Frist: Yeah.
Alan Levine: But we will continue to learn, we want to be a good example, and we’re going to continue to work to do that.
Bill Frist: Alan, thank you so much-
Alan Levine: Thank you.
Bill Frist: For being with me and our listeners today. I’ve learned a lot, and I know they have as well. Thanks a million.
Alan Levine: Thank you so much.
Bill Frist: Thank you.
Alan Levine: That was fun.
Bill Frist: This episode of A Second Opinion was produced by Todd Schlosser of Modis Creative Group and Snapshot Interactive. You can subscribe to A Second Opinion on Apple podcasts, Spotify, or wherever you are listening right now. You can also watch our interviews on YouTube and on our website. And be sure to rate and review A Second Opinion so we can continue to bring you great content.
Bill Frist: You can get more information about the show, its guests, and sponsors at asecondopinionpodcast.com. That’s asecondopinionpodcast.com. A Second Opinion broadcast from Nashville, Tennessee, the nation’s Silicon Valley of health services where we engage at the intersection of policy, medicine, and innovation.
