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Business Roundup: Health System Buyers, Partnerships Sought

John Commins, for HealthLeaders Media, January 20, 2014

In need of financial stability, Wellmont Health System is reviewing its options, including possibly aligning with another health system. California-based Daughters of Charity Health System believes "new ownership is in the best interest" of the communities it serves.

Wellmont Health System is looking for a partner.

The Kingsport, TN-based health system, with seven hospitals serving Upper East Tennessee and Southwest Virginia, announced this month that it has "launched a process to evaluate strategic options for the organization's future, including the possibility of aligning with another health system."

Wellmont CEO Denny DeNarvaez says the myriad pressures and uncertainties in the healthcare sector have created an especially challenging environment for smaller, more isolated health systems. The challenges, named in a statement released by Wellmont, include the increasing sophistication of information technology and its cost, quality mandates, demand primary care services and population health management, lower patient volumes, reimbursement cuts and performance penalties under the Patient Protection and Affordable Care Act.

"Unlike many health systems, Wellmont is fortunate to be in a position of clinical strength and relative financial stability thanks to the great work of our physicians, co-workers and leadership," DeNarvaez said. Nevertheless, Wellmont must improve its financial position by millions of dollars during the next several years, she added. "The board and the administration are committed to continue pursuing all internal options to ensure the financial stability of our health system for the future.

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