FTC Staff’s Third Submission to the Tennessee Department of Health Regarding the Certificate of Public Advantage Application of Mountain States Health Alliance and Wellmont Health System

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Bureau of Competition
Bureau of Economics
Office of Policy Planning
July 18, 2017
VIA ELECTRONIC MAIL
John J. Dreyzehner, M.D., MPH, FACOEM
Commissioner
Tennessee Department of Health
710 James Robertson Parkway
Nashville, TN 37243
TN.Health@tn.gov
Honorable Herbert H. Slatery III
Attorney General
State of Tennessee
500 Charlotte Avenue
Nashville, TN 37202
Herbert.Slatery@ag.tn.gov
Re: 	Certificate of Public Advantage Application of Mountain States Health Alliance and Wellmont
Health System
Dear Dr. Dreyzehner and General Slatery:
On behalf of the staffs of the FTC’s Bureau of Competition, Bureau of Economics, and Office of Policy
Planning, and pursuant to the Tennessee rules implemented at Chapter 1200-38-01, we are providing the
attached written public comment in response to the three consultant reports submitted by Mountain States
Health Alliance and Wellmont Health System to the Tennessee Department of Health. We can provide copies
of any documents referenced in these comments, upon request.
Please direct questions concerning this submission to Goldie V. Walker, Attorney, Bureau of
Competition, 202-326-2919, gwalker@ftc.gov; and Stephanie A. Wilkinson, Attorney Advisor, Office of Policy
Planning, 202-326-2084, swilkinson@ftc.gov.
Respectfully submitted,
cc: 	Marissa J. Levine, State Health Commissioner, Department of Health, Commonwealth of Virginia
Enclosure

Federal Trade Commission Staff’s Third Submission
to the Tennessee Department of Health
Regarding the Certificate of Public Advantage Application of
Mountain States Health Alliance
and Wellmont Health System
Pursuant to Tennessee Code § 68-11-1301 et seq.
and the rules implemented thereunder at Chapter 1200-38-01
July 18, 2017
Bureau of Competition
Bureau of Economics
Office of Policy Planning

FTC Staff’s Third Submission - July 18, 2017
1
I. 	Introduction1
Federal Trade Commission (“FTC”) staff conducted a detailed investigation into the
proposed merger of Mountain States Health Alliance (“Mountain States”) and Wellmont Health
System (“Wellmont”) (collectively “the applicants”) and submitted two previous public
comments.2 Those comments discuss the potential for the proposed merger to cause significant
harm to the region and raise concerns that the applicants’ proposed commitments would not
remedy these harms. Based on detailed analyses discussed in the comments, FTC staff
concludes that the benefits of the proposed Certificate of Public Advantage (“COPA”) do not
exceed the likely harm to healthcare competition and consumers in Northeast Tennessee and
Southwest Virginia, and definitively do not do so by clear and convincing evidence.
The Tennessee Hospital Cooperation Act directs the Tennessee Department of Health
(“the Department”) to review applications for a COPA between merging hospitals and to issue a
COPA if the Department “determines that the applicants have demonstrated by clear and
convincing evidence that the likely benefits resulting from the agreement outweigh any
disadvantages attributable to a reduction in competition that may result from the agreement.”3
As we have previously testified and submitted in prior written public comments, local consumers
benefit from the close competition between the applicants in the form of lower prices, higher
quality, and greater access to care. If allowed to merge, the combined hospital system would
have a dominant market share of inpatient services and significant market share in several
outpatient and physician-specialty service lines. The loss of competition that would result from
the merger is likely to have significant negative effects on hospital prices, quality of care, and the
availability of services. As FTC staff explained in its initial and supplemental public comments,
the applicants have failed to meet their burden of demonstrating that the purported benefits of the
COPA will outweigh the likely harm from the proposed merger.4
The applicants recently submitted some additional information with their revised
application. In particular, in April 2017, Mountain States and Wellmont submitted three reports
by outside consultants to support their COPA application:
1 These comments express the views of the FTC’s Bureau of Competition, Bureau of Economics, and Office of
Policy Planning. These comments do not necessarily represent the views of the Commission or of any individual
Commissioner. The Commission has, however, voted to authorize FTC staff to submit these comments.
2 Federal Trade Commission Staff Submission to the Tennessee Department of Health Regarding the Certificate of
Public Advantage Application of Mountain States Health Alliance and Wellmont Health System (Nov. 21, 2016)
(“FTC Submission, Nov. 21, 2016”),
https://www.tn.gov/assets/entities/health/attachments/COPA FTC Staff Public Comment Submission to Tenness
ee 11-21-16.pdf; Federal Trade Commission Staff Supplemental Submission to the Tennessee Department of Health
Regarding the Certificate of Public Advantage Application of Mountain States Health Alliance and Wellmont
Health System (Jan. 5, 2017) (“FTC Submission, Jan. 5, 2017”),
https://www.tn.gov/assets/entities/health/attachments/FTC Staff Supplemental Submission to Tennessee 1-5-
17.pdf.
3 Tennessee Hospital Cooperation Act of 1993, Tenn. Code Ann. § 68-11-1303 (e)(1) (“Tennessee Hospital
Cooperation Act”).
4 See FTC Submission, Nov. 21, 2016; FTC Submission, Jan. 5, 2017.

FTC Staff’s Third Submission - July 18, 2017
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• 	Margaret Guerin-Calvert, Compass Lexecon (“Compass”), Independent
Assessment of the Benefits and Disadvantages in the Proposed Merger of
Mountain States Health Alliance and Wellmont Health System (Apr. 11, 2017)
(“Compass report”);
• 	Conduent Community Health Solutions, Healthy Communities Institute, Ballad
Health Population Health Improvement Plan, Capacity and Preparedness
Assessment and Recommendations (“Conduent report”); and
• 	Dennis Weaver, Advisory Board Consulting, Independent Assessment of Ballad
Health’s Likelihood of Successfully Navigating the Narrow Corridor in a Merged
Integrated Delivery System, Prepared for Mountain States Health Alliance and
Wellmont Health System (Apr. 7, 2017) (“Advisory Board report”).
FTC staff carefully reviewed these reports, in consultation with our healthcare expert. The
applicants’ revised application and these supplemental reports do not change our
recommendation that the Department deny the COPA. Our concerns that the proposed merger
likely would increase prices and decrease the quality of healthcare services in Northeast
Tennessee and Southwest Virginia, as articulated in our prior public comments, remain.
Fundamentally, the applicants’ supplemental reports provide no new information or analysis that
changes FTC staff’s conclusion that the proposed merger is likely to significantly harm
consumers in Northeast Tennessee and Southwest Virginia and that the COPA’s benefits do not
exceed these harms by clear and convincing evidence. We respectfully submit this supplemental
comment to explain certain analytical and evidentiary gaps in the applicants’ consultants’
reports.
II. 	The Compass Report Contains Insufficient Analysis to Conclude that the COPA’s
Benefits Outweigh the Disadvantages from the Resulting Loss of Competition
Compass “was asked to provide an independent assessment of whether the likely benefits
of the proposed merger of [Wellmont] and [Mountain States] outweigh the potential
disadvantages of displacing competition, as set out in statutory criteria for issuing a [COPA] . . .
in Tennessee.”5 Because Compass is an economic consulting firm and Ms. Guerin-Calvert is a
well-known economist, it is reasonable to have expected her assessment to include a thorough
economic analysis to inform the evaluation required by the statute. It does not, however. The
Compass report offers some discussion of healthcare and competition in the region, but fails to
sufficiently analyze the likely harm from the merger or provide sufficient economic evidence to
support its claims of the proposed merger’s likely benefits.
A. 	The Compass Report Fails to Provide an Adequate Competitive Analysis
The Compass report offers an overview of healthcare in the region and background
information about the proposed merger and it recites the applicants’ proposed commitments. It
5 Compass report at 1.

FTC Staff’s Third Submission - July 18, 2017
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also provides a high-level discussion of the incentives and commitments that Ms. Guerin-Calvert
argues may mitigate harm from the transaction. Prominently absent from the Compass report,
however, is an economic analysis of the region’s competitive environment, both as it exists now
and as it will likely exist under the COPA. Typically, economic analysis uses several tools to
assess the likely effects of a merger on prices and quality. For example, to determine likely
competitive effects of a merger, economists often define a market or markets in which to assess
the competitive effects of a merger, measure market concentration, and determine how much a
merger would increase market concentration. They also often calculate competition metrics,
such as diversion ratios, to measure the degree of substitution between the merging parties and
other potential competitors, and thus the likelihood of competitive harm.
The Compass report includes virtually none of this critical analysis. Only one paragraph
in the report describes the competitive landscape for inpatient, outpatient, and physician services
in the applicants’ 21-county service area.6 That single paragraph provides limited information
about market concentration and the level of competition between the two hospital systems and,
hence, provides an incomplete and inadequate analysis of competition in the area. The absence
of such economic analyses severely limits the Compass report’s usefulness, and leaves open the
question of why Compass omitted such standard economic tools to assess likely harm to
consumers. Comparatively, FTC staff submitted a thorough analysis of market dynamics and
competition in the region and provided an assessment of the harm and benefits from the
proposed merger. This comprehensive analysis demonstrated a high likelihood of significant
harm to consumers because the merger would eliminate the vigorous competition between the
two systems.7 America’s Health Insurance Plans (“AHIP”) performed its own empirical analysis
of the market and also found that significant harm likely would result from the merger.8 The
Compass report fails to rebut the conclusions reached in these more rigorous analyses.
The Compass report references several interviews conducted with Mountain States and
Wellmont executives and other stakeholders in the region, including interviews conducted for the
Advisory Board report.9 The report does not indicate how the applicants or the Advisory Board
selected the interviewees or under what conditions they conducted the interviews. It is unclear
from the report whether the interviews were performed in a rigorous and reliable manner, and the
rules under which the interviews were conducted.
The Compass report does not add sufficient analysis or evidence to the application to
show that the merger’s purported efficiencies and other benefits outweigh the significant harm to
competition. Economic analysis of hospital mergers typically includes information about cost
reductions and quality of care improvements, also known as efficiencies, that may lessen the
harm from a merger. When a hospital merger significantly reduces or eliminates competition,
this typically leads to increased prices and reduced quality. Only when merging parties
6 See id. at 19.
7 See FTC Submission, Nov. 21, 2016 at 8-50.
8 See Michael Doane & Luke Froeb, Competition Economics LLC, An Economic Analysis of the Proposed Merger
Between Wellmont Health System and Mountain States Health Alliance (Jan. 2015) (“AHIP report”),
https://www.tn.gov/assets/entities/health/attachments/COPA Wellmont-Mountain States Merger Report.pdf.
9 See, e.g., Compass report at 2, 3, 11, 13, 14, 25.

FTC Staff’s Third Submission - July 18, 2017
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adequately demonstrate that their transaction will result in benefits achievable only through the
merger that will be passed on to consumers, and those benefits outweigh the harm to consumers
from lost competition, should the merger be approved.10 That is the COPA law framework, and
how the courts and antitrust agencies analyze efficiencies.
The Compass report, however, provides an inadequate analysis of the likely efficiencies
from the transaction. The report simply relies upon the cost savings projected by FTI
Consulting, Compass’s parent company,11 because “their findings appear to be well-documented
and conservative.”12 The Compass report lists the applicants’ quality commitments without
conducting a comprehensive examination of each quality improvement claim or why the merger
is necessary to achieve these improvements.13
The COPA statute requires the Department to evaluate the benefits of the transaction,
such as cost saving and quality improvements, against disadvantages from the loss of
competition.14 The Compass report contains crucial gaps because it lacks a sufficient
competitive analysis and does not fill the holes in the COPA application to allow the Department
to adequately weigh the benefits and disadvantages of the proposed merger.
B. 	The Compass Report Lacks Sufficient Evidence to Support Its Claims
The Compass report lacks evidentiary support for its claims, is contradicted by the
evidence in several respects, and ultimately fails to supplement the COPA application
sufficiently to meet the required evidentiary burden. For example, the Compass report states
“[o]f all available alternatives, [the new health system’s] incentives best align with those of
payors . . .,”15 but the report provides no evidence of payor support for the transaction. Instead,
public evidence demonstrates the exact opposite: payors are concerned about the transaction’s
likely harm.16
Additionally, the Compass report states that the new health system will “have greater
incentives to make necessary investments to sustain [its] operations than either [system] would
10 The FTC staff submission on November 21, 2016 and the AHIP report both predicted significant price increases
from the merger. See FTC Submission, Nov. 21, 2016 at 3, 9, 12-13, 57-59; AHIP report at 2, 17-18, Table 14. In
order to mitigate this harm, the benefits of the transaction would need to be substantial, likely beyond what the
applicants have claimed, even taking their proposed commitments into account. FTC Submission, Nov. 21, 2016 at
70.
11 See About Us, Compass Lexecon, http://www.compasslexecon.com/about-us/.
12 Compass report at 12.
13 Id. at 10-11.
14 Tennessee Hospital Cooperation Act § 68-11-1303(e).
15 Compass report at 10.
16 See, e.g., Comments from America’s Health Insurance Plans to the Tennessee Department of Health-COPA Index
Advisory Group (Apr. 19, 2016),
https://www.tn.gov/assets/entities/health/attachments/AHIP COPA Comments 041819.pdf; Declaration of Colin
Drozdowski, Vice President for National Provider Solutions, Anthem, Inc. (FTC Submission, Nov. 21, 2016 at
Attachment A); Comments from Virginia Association of Health Plans to Southwest Virginia Health Authority (May
25, 2016), https://swvahealthauthority.files.wordpress.com/2016/09/8-vahp-comments-to-swva-health-authority-
members-5-25-16.pdf.

FTC Staff’s Third Submission - July 18, 2017
5
have independently or through an out-of-area merger.”17 The report does not discuss the specific
alternative offers made to Wellmont, rather it relies only on this statement without comparison to
concrete alternatives. The Compass report fails to assess the benefits that Wellmont could
achieve through any less competitively harmful alternative. Indeed, the statute requires the
applicants to evaluate the “availability of arrangements that are less restrictive to competition
and achieve the same benefits or a more favorable balance of benefits over disadvantages
attributable to any reduction in competition likely to result from the agreement.”18 As noted in
FTC staff’s previous comments, the COPA application failed to address this factor in any
meaningful way, thus it does not satisfy the statute. Similarly, the Compass report does not
provide additional information about these alternatives to the merger to understand how the
purported benefits of the COPA compare to the benefits that other transactions could provide to
the region.
It is inadequate for the applicants to state there are no active alternatives at this time. If
that were the standard—that applicants could simply reject alternative bids not raising
competitive concerns and then file an application stating that there are no active or current
alternatives to the COPA transaction—that would vitiate the very purpose of this statutory
provision. The only way the COPA statute makes sense is to require the applicants to
demonstrate that before executing an agreement to merge, the applicants had no alternatives
available that raised fewer competitive concerns or had a better balance of benefits to
disadvantages. Mountain States and Wellmont have wholly failed to make that showing.
C. 	The Compass Report Overlooks that Mountain States and Wellmont Already
Are Fully Integrated Systems
The Compass report argues that the new health system will become a “single, fully
integrated delivery system” that will be “accountable, both clinically and fiscally, for health
outcomes and the health of the region’s population”19 and discusses the purported benefits that
will result from this integration.20 The suggestion is that only through the merger can the
applicants become integrated health systems, which, only then, will unleash tremendous benefits.
But the broad statements in the Compass report overlook the applicants’ own statements that
Mountain States and Wellmont each already are fully integrated delivery systems.21 Thus, the
region currently realizes many of the benefits that the Compass report discusses. Further,
although some additional benefits may result from combining the two systems, by failing to
analyze the benefits created by merging the two systems compared to what each system can
achieve independently or through alternative arrangements, the report overstates the benefits
17 Compass report at 10.
18 Tennessee Hospital Cooperation Act § 68-11-1303 (e)(3)(D).
19 Compass report at 8.
20 Id. at 10-11.
21 Mountain States Health Alliance & Wellmont Health System, Application for a Certificate of Public Advantage
for State of Tennessee (Feb. 16, 2016) (“COPA Application”) at 11,
http://tn.gov/assets/entities/health/attachments/COPA application.pdf (“Throughout its multi-state service area,
Mountain States functions as an integrated delivery system.”); id. at 12 (“Wellmont owns and operates an integrated
health care delivery system providing inpatient, outpatient and other health care services at multiple locations in
Northeast Tennessee and Southwest Virginia.”).

FTC Staff’s Third Submission - July 18, 2017
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(e.g., quality and cost efficiencies). The comparison must be made between the benefits that the
region would gain from the two fully integrated healthcare systems remaining separate and
continuing to compete and improve their quality and cost effectiveness, versus the potential for
benefits if they combine. Compass looks at only the potential benefits from the combination,
and ignores what the fully integrated systems are doing in these areas and likely would do in the
future.
The Compass report emphasizes the financial challenges facing some individual
hospitals,22 and claims that, without the proposed merger, smaller rural hospitals may be
downsized or face “fundamental changes” to their operations.23 First, it is important to note that
the applicants’ commitments do not alter this risk of downsizing or operational changes—they
merely ensure the hospitals will stay open as some type of healthcare facility for five years, and,
as the applicants admit, could entail fundamental changes to the services offered. Moreover, the
report fails to consider the role of those hospitals in each system’s larger network. In particular,
the report does not analyze whether the health systems derive benefits from having affiliated
rural hospitals. These benefits could include increased referrals from outlying communities that
contribute to the profitability of the overall system. Indeed, the applicants have not claimed that
either system is in financial distress. An individual hospital could appear unprofitable because of
how each applicant allocates costs to each of their system hospitals for accounting purposes. A
hospital may appear unprofitable on a standalone basis, but may still be profitable to the system
as a whole and, therefore, likely to remain operational even without the COPA. The Compass
report does not engage in this analysis.
In sum, the Compass report does not add new evidence or new analysis to fill in the
evidentiary and analytical gaps in the COPA application. As a result, its analysis does not
change FTC staff’s view of the market or conclusion that the merger will likely harm
competition and consumers. The Compass report does not change the fact that the applicants
still fail to demonstrate by clear and convincing evidence that the benefits of the COPA will
outweigh the harm from the merger to near-monopoly.
III. 	The Advisory Board and Conduent Reports Do Not Change FTC Staff’s Previous
Analysis and Conclusions
The applicants also submitted two reports—the Advisory Board report and the Conduent
report—discussing the merged hospital system’s readiness to transition toward population health
management and risk-based contracting.24 Although the reports describe the framework by
which these goals could be met, they change nothing about the applicants’ plans or commitments
to achieve these goals. The applicants have indicated that the proposed commitments to invest in
22 Compass report at 5.
23 Id.
24 The Advisory Board report is intended to assess the “likelihood that the merged integrated delivery system,
known as Ballad Health, will be able to achieve its stated goals . . . of successfully transitioning toward population
health management and risk-based contracting.” Advisory Board report at 4. The Conduent report “is intended to
serve as an assessment of the capacity of the new health system, Ballad Health, to develop and implement an
effective population health strategy – and to improve the community health of this region.” Conduent report at 5.

FTC Staff’s Third Submission - July 18, 2017
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community health are contingent on achieving their cost-savings targets.25 As we explained in
our initial public comment, if the applicants do not achieve these cost savings, it is unclear
whether or how they could fulfill these commitments.26 The applicants have not answered these
questions. The Advisory Board and Conduent reports do not do so either. These reports do not
describe any new mechanisms (beyond those already mentioned in the COPA application) to
ensure the investments will be made or to guarantee the success of the applicants’ proposed
commitments and initiatives.
A. 	The Advisory Board and Conduent Reports Overlook the Benefits from
Competition Between Mountain States and Wellmont
Both the Advisory Board and the Conduent reports emphasize that the merger will allow
the new health system to leverage complementary capabilities and programs between Mountain
States and Wellmont.27 We do not doubt that each system has certain strengths that benefit the
region or that the new health system could realize some benefits from financial and operational
integration.28 But these reports fail to note the extensive overlap—and consequently head-to-
head competition—that exists between the two hospital systems. In other words, while there
may be some complementary capabilities and programs, the applicants’ competitive capabilities
and programs, and the patient benefits they provide, far outweigh them.
As explained in FTC staff’s initial public comment, when competition determines the
range of choices available to consumers, patients ultimately benefit from improved quality, lower
prices, and more effective utilization of resources.29 Moreover, although the Conduent report
states that the “health systems have had little incentive to work together and have lacked the
resources to collaborate on a regional approach . . .,”30 the applicants have worked
collaboratively before and during the COPA process to achieve community health goals. These
collaborations include bringing a Susan G. Komen affiliate to the region, implementing an
antibiotic stewardship program, and starting a partnership with East Tennessee State University
to develop a community health improvement assessment.31 In doing so, they have already
shared some of their strengths and capabilities—without merging—and the applicants have not
specified what collaborations, if any, they have been unable to undertake because of antitrust
concerns. Indeed, antitrust law recognizes the value of procompetitive collaboration that benefits
consumers, and would not necessarily prevent the applicants from collaborating and sharing
25 Response by Applicants to Federal Trade Commission Staff Submission on September 30, 2016 and Supporting
Memorandum to the Southwest Virginia Health Authority and Virginia Department of Health Regarding
Cooperative Agreement Application (Oct. 14, 2016) at 33 (“The monetary commitments are possible solely based
on savings to be realized from merger efficiencies. . . .”),
https://swvahealthauthority files.wordpress.com/2016/09/response-to-ftc-comments-submitted-to-swvha.pdf.
26 See FTC Submission, Nov. 21, 2016 at 29-30.
27 See, e.g., Advisory Board report at 21; Conduent report at 17-19.
28 It is, however, by no means clear that each system will completely transmit all of its strengths or that it will not
also import any of its weaknesses to the combined system.
29 See FTC Submission, Nov. 21, 2016 at 9.
30 Conduent report at 14.
31 COPA Application at 13-14. Although the East Tennessee State University community health improvement
assessment was done as part of the COPA process, there does not seem to be any reason why this could not have
been done outside of the COPA process.

FTC Staff’s Third Submission - July 18, 2017
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these costs with each other (or with other partners) absent a merger. Additionally, certain
healthcare reform efforts, such as population health initiatives, may incentivize independent
healthcare providers to engage in a greater degree of collaboration in the future.
B. 	The Advisory Board and Conduent Reports Ignore the Applicants’ Current
Programs and Likely Overstate the Merger’s Population Health Benefits
Together, the Advisory Board and Conduent reports tout the applicants’ independent
successes as proof that the merged entity will have the ability to engage successfully in risk-
based contracting and population health initiatives.32 But these successes actually illustrate why
the applicants can engage in these programs and activities without merging with each other. The
reports fail to identify how much, if any, of the purported benefits can be achieved only through
the proposed merger rather than alternatives “that are less restrictive to competition and achieve
the same benefits or a more favorable balance of benefits over disadvantages.”33
The Advisory Board report argues that increased scale will improve the new health
system’s ability to engage in risk-based contracting.34 But the report also notes that both
organizations already have experience in value-based arrangements and contracting.35 In fact,
according to the report, Mountain States has had early successes with risk-based contracts
containing both upside and downside risk,36 and Wellmont has experience with pay-for-
performance and bundled-payment arrangements.37 Although the merger will allow the
combined entity to spread risk over a larger group of covered lives, the report does not address
the incremental benefit the new health system will gain relative to Mountain States’ and
Wellmont’s current level of successes or what improvements to scale the applicants each could
achieve from another transaction. Without this analysis, the Advisory Board report does not
demonstrate the transaction will lead to benefits obtainable only through this merger, and it
likely overstates the benefits from the merger. Taken to its logical conclusion, the scale benefits
the applicants argue for would encourage all hospital systems in Tennessee to merge to
monopoly—an outcome clearly harmful to competition and Tennessee healthcare.
With respect to population health management, the Advisory Board report states that the
“merged entity’s scale is critical to pursue population health management in a financially
sustainable manner.”38 The Conduent report notes several successful population health programs
that each hospital system has already developed, including programs designed to combat obesity,
physical inactivity, tobacco use, and substance abuse.39 However, the Conduent report fails to
provide any specifics about these population health initiatives, including the number of current
participants or people reached by the programs, whether the programs are at capacity, or how
much business the programs drive to each hospital system. Thus, the Conduent report does not
32 See, e.g., Advisory Board report at 13; Conduent report at 17-19.
33 Tennessee Hospital Cooperation Act § 68-11-1303(e)(3)(D).
34 Advisory Board report at 13.
35 Id.
36 Id.
37 Id.
38 Id. at 6.
39 Conduent report at 18-19.

FTC Staff’s Third Submission - July 18, 2017
9
demonstrate whether the merger actually will improve or expand these existing population health
programs. To the extent any of these population health initiatives already exist, they cannot be
counted fully as merger-specific benefits. Only improvements over what the applicants could
achieve independently or through an alternative transaction should be counted as benefits
attributable to the merger.
C. 	The Advisory Board and Conduent Reports Do Not Adequately Substantiate
Their Claims
The Advisory Board and Conduent reports do not offer sufficient additional evidence to
substantiate their claims that the new health system actually will engage in population health
initiatives or risk-based contracting. For example, beyond providing an amount of money the
applicants could spend, the reports do not identify specific plans to implement any of these
initiatives. Moreover, the reports lack evidence demonstrating that the new health system will
successfully achieve its population health or risk-based contracting goals. These reports neither
evaluate the effectiveness of current programs nor offer evidence that the programs the
applicants plan to implement with the merger will improve population health in the region
relative to the currently offered programs. Further, the reports provide no evidence to
demonstrate that the merger is necessary to implement these programs.
Like the Compass report, the Advisory Board and Conduent reports fail to provide
sufficient evidence or analysis to advance the applicants’ claims that the purported benefits of the
merger will outweigh its likely harm to residents of Northeast Tennessee and Southwest
Virginia.
D. 	Applicants Have Not Provided Any Additional Commitments or Offered
Improvements to Their Existing Commitments
FTC staff’s prior public comments also identified numerous flaws, gaps, and
shortcomings with the applicants’ proposed commitments. The proposed commitments fail to
remedy the competitive harm to consumers from the merger. At least publicly, the applicants
have not offered additional or improved commitments—as such, those flaws, gaps, and
shortcomings remain. While we encourage the Department to carefully consider any additional
commitments that the companies may propose as part of the COPA application, FTC staff
remains concerned that behavioral remedies generally are far inferior to structural remedies
because they are difficult and costly to construct, implement, monitor, and enforce. The
requirement to agree to commitments also may be eliminated by legislative or other changes.
Moreover, once the applicants merge, it will be difficult, if not impossible, to unwind the merger
as a practical matter, notwithstanding any plan the applicants propose or any right the
Department has to do so. As such, the applicants may have tremendous leverage to resist
enforcement of commitment terms if they fall out of compliance.
IV. 	Conclusion
FTC staff’s previous public comment submissions to the Department contain substantial
information and evidence demonstrating that the proposed merger will eliminate competition and

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likely lead to higher prices, lower quality, and reduced availability of healthcare services in
Northeast Tennessee and Southwest Virginia. The FTC staff’s submissions have provided
detailed evidence to rebut the applicants’ claims that the purported benefits of the COPA would
be significant enough to outweigh its very likely harm to competition and consumers. The
applicants’ consultants’ reports fail to provide sufficient additional information or analysis to
demonstrate by clear and convincing evidence that the purported benefits of the proposed merger
would outweigh the serious competitive harm that would likely result from creating a near-
monopoly. We are not aware of other evidence or analysis that does so. Therefore, FTC staff
remains deeply concerned that this proposed merger will cause significant and irreversible harm
to competition and consumers in the region, and we continue to urge the Department to reject
Mountain States and Wellmont’s COPA application.