Regulators Try to Rein in Tennessee Hospital Monopoly Amid Substandard Care

By Consumers for Quality Care, on October 9, 2024

The country’s largest state-sanctioned hospital monopoly is facing new calls for reform after patients complained for years about the quality of care, according to KFF Health News. 

Ballad Health is a large 20-hospital system serving over 1 million residents in northeast Tennessee and southwest Virginia. The system was established six years ago, when Tennessee and Virginia lawmakers agreed to waive anti-monopoly laws. In exchange for this waiver, Ballad agreed to uphold certain levels of quality care, but in the years since, Ballad has not met these goals, failing consumers and the community who have no choice where they receive medical care. 

In documents obtained by KFF Health News, Tennessee officials are giving Ballad an ultimatum – improve patient quality care or face the possibility of being broken up.  

Though the hospital is graded by the Tennessee Department of Health each year, only a fraction (5 percent) of Ballad’s final score depends on performance standards, such as surgery complications, emergency room speed, and patient satisfaction. This has allowed Ballad to receive an “A” grade each year despite its glaring shortcomings. 

Now, state officials want the hospital performance rating to be “the most heavily weighted” criteria by which the hospital system is judged, from 5 percent to 40 percent. 

The health system has a history of failing to meet quality of care standards. Over the last two years, Ballad has missed 74 percent of its benchmarks for quality.  

As negotiations continue between Ballad and Tennessee health officials, CQC applauds efforts to improve the quality of care for consumers. Decreased competition hurts consumers, often leading to fewer options for care and higher out-of-pocket costs. CQC urges regulators and lawmakers to promote more competition and to discourage mergers and other business practices that leave consumers worse off.