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In First Financials Since Merger, Ballad Revenues Rise 1.3%

By Jack O'Brien  
   August 16, 2019

The first-year metrics for the system based in Tennessee and Virginia were positive.

Ballad Health benefited from flat expenses and revenues that rose 1.3% during its first fiscal year since the merger between Mountain States Health Alliance and Wellmont Health System, according to its annual financial report released Thursday.

The Johnson City-based system saw its operating cash flows rise by more than $30 million to $228.1 million, overall EBITDA increased 27.5%, and EBITDA margin rose 2.6% year-over-year.

Perhaps most notably among its reported financials was Ballad's net income, which jumped from $9.9 million to $36.5 million, thanks in large part to improved productivity, a reduction in the reliance of contract labor, and more focused supply chain management.

"The improvement in our financial and quality performance has led to lower costs, which translates into savings for the employers in our region, a goal we remain committed to," Alan Levine, CEO of Ballad Health, said in a statement. "This improvement has also allowed us to make additional investments in nursing resources, which we hope will help alleviate the stress of the nursing shortage on our staff."

Related: Ballad Health Relies on Partnerships to Excel With Difficult Payer Mix

Despite these improvements, Ballad also reported a 0.8% decline in volumes, a 2.7% drop in inpatient surgeries, a 1.4% decline in outpatient surgeries, and a 3.8% fall in ER visits.

In the report, Ballad stated that these issues are not unique to the system as other rural health providers also struggle to deal with declining patient volumes.

"Ballad Health is facing a rapidly changing landscape where our financial success is no longer judged solely by volume, but increasingly, how we care for fewer people more efficiently, effectively and with better outcomes," Levine said.

Related: Ballad Health CEO Responds to Criticism From Federal Trade Commission Panel

The system's investment strategy was also a prominent aspect of the annual financial report, with Ballad spending more than $1 billion on salaries, wages, and benefits, as well as $200 million in capital throughout the region.

Ballad said this reinvestment initiative applies to "new equipment, diagnostic technology, building improvements, information technology infrastructure and a common electronic health record."

Additionally, Ballad reported the recruitment of more than 150 physicians to the organization since its merger went through, including nine who were recently promoted to leadership positions.

Related: Ballad Health Announces Organizational Leadership Changes

Related: COPA Annual Report Notes Successes, Challenges of Ballad Health Merger

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: JOHNSON CITY, TN, USA-9/30/18: An open grassy park called "King Commons",, featuring the large "Johnson City" steel sign. - Image / Editorial credit: MilesbeforeIsleep /

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