As 2026 approaches, hospitals and health systems are reflecting on key initiatives and preparing for the year ahead. For Johnson City, Tenn.-based Ballad Health — a 20-hospital system serving 29 counties across Northeast Tennessee, Southwest Virginia, Northwest North Carolina and Southeast Kentucky — this includes significant capital investment.
In this conversation with Becker’s, Ballad Health COO Eric Deaton shares more about those investments, from emergency department expansions and rural access to scaling oncology services and surgical robotics. He also discusses the system’s workforce efforts, including how the organization is strengthening retention.
Editor’s note: Responses have been lightly edited for length and clarity.
Question: What are your top operational priorities heading into 2026, and how have they shifted post-shutdown?
Eric Deaton: We continue to focus on making capital investments across the region. We aim to at least match or exceed our depreciation each year with the capital we reinvest in the organization.
Workforce has also been a key strategy, especially since COVID. Many people left the healthcare field due to burnout and other reasons. We’ve made a tremendous effort to develop our workforce and reduce turnover.
We’ve also focused on new services, particularly around oncology.
Q: How is Ballad Health addressing workforce shortages and labor cost pressure across its footprint?
ED: Since the pandemic in 2020, we’ve leaned into investments in nursing and front-line team member pay. We’ve made an incremental annual increase of $144 million in salaries and wages, affecting 4,059 RNs and LPNS, and 1,155 CNAs and nursing assistants.
We also created the Ballad Health Academy with support from a Bloomberg Foundation grant. It allows local high school students to graduate with associate degrees — like LPNs — and enter the workforce right after high school. We expected about 100 students and had more than 200 participate. It’s been very successful.
We’ve also developed entry-level programs for CNAs, certified assistants in our division offices, and phlebotomy to support the workforce. In 2022, our turnover rate was as high as 23-24%. The most recent data shows we’ve reduced it to about 11% in nursing retention.
We’ve found most nurse turnover happens in the first year. Often, the job isn’t what they expected or it’s more challenging than anticipated. So we created mentor programs, increased the number of nurse managers, and improved support for early-career nurses.
About five or six years ago, we also created the Balladeer Program for our team members’ children. They participate in activities and day trips together. We now have over 3,000 children involved. All of these efforts help stabilize the workforce and show our team members they’re appreciated.
We conduct satisfaction surveys and have seen positive response rates. People feel more connected with the organization and are proud to be part of Ballad Health.
Q: What infrastructure or capital projects are you prioritizing, and how are you balancing those investments with current financial constraints?
ED: Our focus has been on creating capacity and throughput in our emergency departments. At Franklin Woods Community Hospital in Johnson City, we just completed a 20-bed expansion. It’s a busy community hospital, and we were seeing delays in getting patients admitted from the emergency department. The board approved the expansion about a year and a half ago, and it opened this month. Already, we’re seeing fewer patients held in the ED for admission.
At our largest tertiary hospital and Level 1 trauma center, Johnson City Medical Center, we’re embarking on a $60 million expansion and renovation of the ED. It will add 53 adult beds, 24 pediatric beds, and two trauma areas. This ED sees a high volume of visits and admissions, so improving throughput is essential.
We also expanded the ED at Lonesome Pine Hospital in Big Stone Gap, Va., with a $1.5 million project.
Another exciting project is the NICU expansion at Niswonger Children’s Hospital, affiliated with Johnson City Medical Center. Previously, the NICU was one large space. Now we’ve renovated it into two floors with 48 private rooms — 40 of them single rooms where parents can stay with their children, and four for twins so families can stay together. Each room includes a shower and sleeping space for parents. That’s a $56 million project.
We’re also investing in oncology. Cancer is the leading cause of death in our region. We partnered with Varian, and we’re replacing all nine of our linear accelerators with TrueBeam and Ethos systems over eight years. This is cutting-edge technology for our cancer patients.
In robotics, we’re adding five new Da Vinci surgical robots, bringing our total to 18 across the system. This lets us extend robotics to rural areas, which is critical since today’s surgeons are trained on robotics and expect to use them in practice.
Intuitive, the maker of Da Vinci, also produces the Ion robot, which we use for lung cancer biopsies. It allows us to take much smaller biopsies — just three to four millimeters — which helps us detect cancer at stages 1 and 2, instead of 3 or 4. This is truly saving lives.
We’ve also upgraded imaging — replacing CTs, MRIs, PET scans, and enhancing our pathology labs. Our board has been very supportive of reinvesting capital. We try to match or exceed our annual depreciation with new capital. This past year alone, we put $150 million into capital projects.
When we build our budget each year, we allocate funds first for debt payments and salaries. Then we budget for capital. What’s great is that the earnings we generate are reinvested in salary increases or expanding services and capital — all going back into the region.
