Ballad Health assumes full ownership of 2 Virginia hospitals, commits $310M to community health investments

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A new partnership granting Ballad Health the entirety of Johnston Memorial Hospital and Smyth County Community Hospital now allows the system to funnel hundreds of millions toward community health, workforce development and other initiatives in rural southwest Virginia. (rawpixel)

Ballad Health has obtained full ownership of two rural Virginia hospitals and, as part of the agreement, announced over $310 million of planned investments into two local foundations supporting community health, workforce development and education.

Ballad Health already had partnerships in place with the Wellspring Foundation (formerly the Johnston Memorial Healthcare Foundation) and the Smyth County Community Foundation.

The Appalachian health system was also the majority owner and operator of both foundations’ hospitals through its Mountain States Health Alliance subsidiary, owning a 50.1% stake of Abingdon, Virginia-based Johnston Memorial Hospital and an 80% stake of Marion, Virginia-based Smyth County Community Hospital.

According to the deal announcement, the partnership restructure allows Ballad to uncork hundreds of millions to invest into the two foundations to support efforts across Virginia’s Washington, Russell, Smyth, Wythe and Grayson counties.

“This new partnership brings the best of all options to Southwest Virginia,” Ballad Health Chairman and CEO Alan Levine said in a statement. “The hospitals will continue to be operated by people the communities have become familiar with, while at the same time, unleashing historic investment into the communities served by these critically important assets we have also invested so much in. The relationship we have with the people of Southwest Virginia could not be more important now that we are moving forward together with these exciting initiatives.”

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Ballad Health said it will not be changing the leadership structure of Johnston Memorial but announced that Sean McMurray, its senior vice president of market operations and service line integration and development, will take on a new role as the executive director of the Wellspring Foundation next month.

The announcement did not address leadership changes for Smyth County Community Hospital nor its foundation.

Ballad Health said it does not intend to reduce the services provided by either hospital. A community board will be established for the hospitals, and each foundation will continue to have a hand in their hospital’s local governance.

The $310 million investment will be broadly used “to improve health and healthcare” for the areas served by each hospital, Ballad Health wrote.

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Those efforts will include financial support for other charitable organizations in the area, community health initiatives, education, healthcare workforce development and “other initiatives consistent with the goals agreed to by each foundation and Ballad Health,” they wrote.

Additionally, the Smyth County Community Foundation will be pledging an immediate $3 million investment toward a grant program addressing substance abuse, according to the announcement. The foundation also plans to partner with Ballad Health for additional initiatives targeting aging care, substance abuse prevention and youth-focused health education.

Further, both of the community foundations and Ballad Health “will begin immediate work identifying options for enhancing behavioral health services for the community,” they wrote.

“Both the Wellspring Foundation and the Smyth County Community Foundation have been steadfast supporters of Ballad Health’s mission, and similarly, we strongly support their goals and visions for the future,” Levine said. “This announcement is historic in terms of the resources it will unlock.”