Tennessee’s latest “COPA Monitor Report” on Ballad Health’s performance raised concerns about the hospital system’s spending on facilities and equipment maintenance. The report suggested that Ballad may not be investing enough in maintaining and modernizing its property, plant, and equipment. Monitor Larry Fitzgerald recommended that the Tennessee Department of Health consider the impact of inadequate investment on Ballad’s continued public advantage.
Although Fitzgerald acknowledged that Ballad continued to provide a clear and convincing public advantage, he noted that the system’s capital spending fell below the recommended levels. Ballad CEO Alan Levine disputed Fitzgerald’s claims, stating that the system had rebounded its capital expenditures to the highest levels in its history and had a routine capital plan in place.
Fitzgerald suggested that Ballad’s spending on facilities and equipment should average a minimum of 90% of depreciation expense each year, with an even better rule of thumb being 100%. He made specific recommendations to ensure adequate investment and prevent deterioration of property beyond its lifespan.
Levine criticized Fitzgerald’s assertions as inaccurate and unsupported, emphasizing that Ballad had strategic reasons for its investment decisions and strong cash flow. He highlighted that Ballad would invest about 130% of depreciation in capital this fiscal year, exceeding the recommendations in Fitzgerald’s report for FY 2023.
Overall, the report highlighted the importance of adequate investment in maintaining high-quality facilities and equipment to ensure quality patient care and satisfy regulatory requirements. Levine called for accurate information and factual support in assessing Ballad’s performance and public advantage.
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