Kingsport, Tenn.-based Wellmont Health System and Johnson City, Tenn.-based Mountain States Health Alliance could cut $25 million in annual labor costs if their proposed merger goes through, according to a WJHL news report.
The systems revealed that information in paperwork filed in response to questions from the Tennessee Department of Health.
A spokesman told WJHL, the $25 million in savings would be achieved through job cuts over time and mainly through attrition. Savings from labor reductions would be invested in new healthcare programs, which would create new jobs, according to the report.
Top executives from both systems said it is too early to provide a specific number of jobs that would be cut. However, it will be less than the estimated 600 to 1,000 jobs that would be eliminated if the merger falls through and outside companies purchase the systems, according to Mountain States CEO Alan Levine.
"It's not a choice between the status quo and a merger," Mr. Levine told WJHL. "It's a choice between the merger and the systems joining larger outside systems."
Wellmont and Mountain States began exclusive merger talks last April. The organizations inked a definitive agreement after a period of due diligence, and the boards of both systems approved the agreement. In February, the systems filed applications for a Certificate of Public Advantage in Tennessee and a cooperative agreement in Virginia.
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