Tri-Cities Business Journal July 2015 by The Business Journal of Tri-Cities TN/VA

Path to Prosperity: Business Backs Healthy Kingsport

Plus: Bristol Country Club Changes Hands

and

Heather Cook, executive director Healthy Kingsport walks with Perry Stuckey, Eastman Chemical Co., vice president on Kingsportâ&#x20AC;&#x2122;s Greenbelt. Photo by Jeff Keeling

Mountain States, Wellmont Seek Public Input on Merger

JULY 2015

$3.00 Volume 27 Number 11

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

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Business Journal The

| COVER STORY

of Tri-Cities Tennessee/Virgina

Changing Face of Health Care: Path to Prosperity

Office 423.854.0140 Publisher William R. Derby bderby@bjournal.com 423.979.1300

Businesses in the Tri-Cities are starting to realize the economic impact of healthcare costs, and are beginning to take steps to support organizations like Healthy Kingsport

Heather Cook, executive director Healthy Kingsport walks with Perry Stuckey, Eastman Chemical Co., vice president. Photo by Jeff Keeling

Face of Health Care: 14 Changing Pure Foods

Face of Health 18 Changing Care: Fundraiser nets almost

$1MM for Children’s Hospital

The focus on lowering healthcare costs includes a healthy dose of healthier living. Companies like Pure Foods, now starting operations in the Tri-Cities, plan to capitalize on that.

The plan to hire more sub-specialists, creating more opportunities for families of sick children to seek treatment locally, resonated this month with record philanthropy for Niswonger Children’s Hospital.

| FEATURES Partners with the 20 Eastman University of Tennessee

The corporation and the university both hope to benefit from a shared research commitment focusing on additive manufacturing and neutron science.

100 Years of Success The Chamber of Commerce Serving Johnson City, Jonesborough and Washington County celebrates its centennial in style.

Club at Bristol Changes Hands The oldest continually operating country club in Tennessee has new owners. Will their plan to broaden the club’s appeal bring it back from the brink?

Managing Editor Scott Robertson srobertson@bjournal.com 423.767.4904 Associate Editor Jeff Keeling jkeeling@bjournal.com 423.773.6438 Sales & Marketing Jeff Williams jwilliams@bjournal.com 423.202.2240 Robin Williams rwilliams@bjournal.com 423.794.6938 Creative Derby Publishing, LLC Graphics Director / Judd Shaw jshaw@bjournal.com 423.833.2726

The Business Journal of Tri-Cities Tennessee/Virginia

The End of an Era Kingsport sees its longtime mayor off into retirement amidst a remembrance of pro-business policies and actions.

is published monthly by Derby Publishing, LLC 1114 Sunset Drive, Suite 2 Johnson City, TN 37604 Phone: 423.854.0140 ©2015 Periodicals postage paid at Johnson City, Tenn. and additional offices. ISSN#10406360

| DEPARTMENTS 7 From the Editor 9 FYI 24 On The Move

Assistant Publisher Jeff Derby jderby@bjournal.com 423.306.0104

25 Awards & Achievements 28 Med Briefs 30 The Last Word

POSTMASTER:

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Business Journal of Tri-Cities, TN/VA 1114 Sunset Drive, Suite 2 Johnson City, TN 37604 Subscription per year $35.

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| FROM THE EDITOR

The newest oxymoron: Greek discipline And this did not sneak up on anyone. It was more than five years ago that credit rating agencies downgraded the Greek government’s debt to junk status. That pushed the cost of borrowing in tradierhaps the tional markets so high that the country essentially citizens of had its overdraft protection cancelled. To avoid Greece should bankruptcy then, Greece borrowed from the EU and brush up on the International Monetary Fund. For countries, the writings going to the IMF for funds is the equivalent of going of one of their to see a guy with the middle name “the” for a loan venerable – Barry the Blade, for instance. It’s the loan of last philosophers. resort. Again, that was in 2010. Epictetus knew Yet somehow, Greece continued on its merry path about disciof reckless spending and haphazard fiscal managepline. So why ment, pretending tomorrow would never come. has his country Finally, on July 13, 2015, in Brussels, tomorrow forgotten it? came. Negotiators for the EU and the Greek govern You ment agreed on what would become the third Greek could call bailout package, after a day of meetings that one the Greek official called “a day of mental waterboarding” for voters the Oxi Greek Prime Minister Alexis Tsipras at the hands of morons. The electorate of Greece voted overwhelmEuropean creditors. As of this writing, the full Greek ingly to reject a European Union bailout package that government had not agreed to the plan, but failure included strict austerity measures. They celebrated to do so would result in Greece’s expulsion from the their vote with dancing in the streets, waving banners EU, which would, in short order, likely lead to the emblazoned with the word “Oxi” ¬– Greek for “No.” collapse of the Greek banking system. Days later, their prime minister accepted an And now Tsipras, who has led the Greek EU bailout proposal that was stricter than the one it government to this point by eschewing austerity, is had asked the people to reject as being too strict. charged with selling the idea of a radical austerity Greece built its economic system on the ideals package to his people, and then making it work. from the old joke that ends, “I can’t be overdrawn, I With everything that’s going on in America, still have checks left!” it’s easy sometimes to ignore the rest of the world’s The Greeks invented organized sport, but that news. But Greece is teaching us more now than it has given way to the country’s new national pashas since the days of Epictetus, Plato and Socrates, time – tax evasion. A government cannot borrow, if we care to listen. then borrow some more, then keep borrowing, if No country, no matter how proud, can continue it is lax in collecting the revenues to pay back the a cycle of borrowing, spending, and failing to debt. To call the Greek system of tax collection lax collect the revenues necessary to pay down the debt is like calling the Olympics a track meet. Theirs has forever. Tomorrow always comes. not merely been a tax-and-spend economy. It has been a tax-but-don’t-bother-to-collect-and-spend economy. Alongside all that borrowing and all that noncollection of taxes, the Greeks also have one of the most generous pension systems on the planet at a time when pensions worldwide are disappearing out of economic necessity. “Freedom is not procured by a full enjoyment of what is desired, but by controlling the desire.” - Epictetus

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| FYI

&Downs

Ups

A quick check of the conventional wisdom on who’s going what direction in Tri-Cities business

Koyo – An auto industry manufacturer in Tennessee’s Washington County Industrial Park appears set to invest $8 million and add 11 new jobs after the Washington County Industrial Development Board approved a tax incentive for the company last month. Mark Williams, a consultant who works closely with the company, Japanese-based Koyo Corp., said the expansion could be completed this summer. It would expand a heat-treating component of the

plant’s work at a time when domestic vehicle sales continue to rise. IDB members voted unanimously to approve a 10-year “payment in lieu of tax” (PILOT) agreement should Koyo expand. The PILOT agreement would be Washington County’s third with Koyo, which began operations in 2008. Koyo currently has 154 employees, 46 more than it committed to having when it inked its first agreement with Washington County in November, 2006.

Tulsa Dentsply – Tulsa Denstply closed July 1 on the purchase of its manufacturing facility in Johnson City. Washington County’s Industrial Development Board had approved in March a payment-in-lieu-of-tax agreement with JCM International Inc., a holding company for Dentsply, that included the county putting in roughly $700,000.

In return, the company guaranteed it would keep its existing 189 jobs in place at the facility in addition to creating 25 new jobs and making a $16.6 million capital investment in the facility over the course of the next 15 years. The PILOT agreement includes mandatory payments by Dentsply to the county if it fails to meet its hiring and investment goals, ensuring the taxpayers will be made whole over the course of the deal.

Alpha Natural Resources – The U.S. Supreme Court finally agreed the Obama EPA overstepped its bounds with environmental regulations that have come to be known as “The War on Coal.” Too bad the decision came after Alpha’s stock slipped below 25 cents a share and creditors began lawyering up.

Alpha is making what strategic moves it can. The company recently informed 165 miners in Wise County their facilities may be sold. At the same time, Alpha is spending $125 million diversifying into a natural gas development in Pennsylvania. Still, the road back will be long and hard, at best, as natural gas has overtaken coal in the electricity marketplace. The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| COVER STORY

By Sarah Colson, Jeff Keeling and Scott Robertson

umbers don’t lie, and when those numbers pertain to the health of Tennesseans – and particularly to East Tennesseans – they aren’t kind. Alarmingly high rates of adult-onset diabetes, obesity, heart disease and other chronic, largely preventable maladies cost the Tri-Cities area plenty. Costs include high health care spending; lowered quality of life; and missed economic opportunities when employers balk at settling in an otherwise attractive location, or spend more than they should on health costs if they’re already here. Efforts to combat these issues for the sake of both business and for the population in general have been ongoing, but a recent development has leaders in Kingsport hopeful about truly changing the population health landscape there, and eventually throughout the greater Tri-Cities. It’s Healthy Kingsport’s transition from a half-decade volunteer effort to a funded, high-profile pilot community in Gov. Bill Haslam’s Healthier Tennessee initiative. Healthy Kingsport’s executive director, Heather Cook, said the infrastructure and opportunities for better health through diet and exercise improvements exist in the form of biking paths, greenways, and quality health systems. The messages that will drive change to a healthier culture, she said, need to be repeated – over and over. “It’s not about telling people once or about the institution telling the community,” Cook said. “It’s about one source telling people over and over and over what we have to offer and how to 10 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

improve our health.” The cost of inaction is frightening to consider, at least according to Cook, Healthy Kingsport Board member and Eastman Chief Human Resources Officer Perry Stuckey, and East Tennessee State University College of Public Health Dean Dr. Randy Wykoff. All three spoke to The Business Journal for this article. They added two related factors into the equation: education and poverty. “Often the general public looks at health and thinks health care,” Wykoff said. “But the bottom line when you go to an employer is that they need a healthy, educated, drug-free workforce. So behavior is important, education is important, and health care is important. It’s easy to see health care. It’s harder to see behavior change and health promotion.” Added Stuckey, who in addition to his role with Healthy Kingsport serves on the Healthier Tennessee board and the American Health Policy Institute Board of Governors: “The Nashville region is probably the healthiest (in Tennessee) and you know that lifestyle, education and income determines that. “For me, this is about emotional health,” Stuckey added. “It’s about managing physical fitness. It’s about lifestyle. One out of three Americans is living from paycheck to paycheck. And the number one cause of that is financial stress. The number one cause of a lot of medical problems in the nation is stress. There’s no secret that for all the good things that go on in this state, that the two most unhealthy regions of the state are West

Tennessee and East Tennessee and I think a lot of that is correlated to education and income.”

Wykoff said while the Tri-Cities “health outcomes” are poor, its “health factors” rank better than its outcomes. Those factors are the very things Healthy Kingsport is trying to improve even further. And factors that rank better than outcomes suggest better outcomes in the future. “That’s consistent with improving health care, improving education, increasing economic development and so on,” Wykoff said. “So what we hope to see over time is our health outcomes improve. That’s what Heather is working on in Kingsport. Activity, decreased smoking, healthier eating, the things the governor’s Healthier Tennessee is working on.”

because of the structure already in place in Kingsport and the Tri-Cities. With the quality health systems, biking paths, sidewalks, the Green Belt and more, it How bad is it? just made sense for Kingsport to be one of Tennessee has the fourth highest those pilot communities. adult obesity rate in the nation. In Sul Healthy Kingsport’s main compolivan County alone, 36.4 percent of adults nents are nutrition, physical activity and reported being obese in 2010. Among tobacco cessation. The third component children and youth, 41 percent of elmay come as a surprise, but Cook said ementary students, 46 percent of middle at least 29 percent of pregnant women school students and 41 percent of high in Sullivan County smoke. Stuckey said school students in Sullivan County are he sees this and other grim statistics as considered overweight or obese. At this a threat to businesses throughout the rate, for the first time ever, these children region. are predicted to have shorter life spans “When you’re a global company and than their parents. Similar stark numbers you’re doing business in 100 countries can be found when it comes to rates of around the world and when Tennessee other costly, life-shortening, chronic and is in the top 10 unhealthy states and I’ve preventable conditions. got, for example, a highly talented Ph.D. Wykoff: “If you look at things like chemist or scientist who’s into fitness and early death rate, the U.S. is 33rd in the they read the data about our region, they world and Tennessee is 43rd in the U.S., are less likely to want to come relocate to and most of the counties in Northeast this region for those reasons.” Tennessee and Southwest Virginia are One byword in the program is “small worse than the Tennessee rating. So starts.” Cook said a “Small Starts at if you take the Tri-Cities area, we are Work” effort is designed to give people less healthy than the state, which is less achievable objectives that, taken together healthy than the nation, which is only the and over time, can lead to better health. 33rd healthiest nation in the world.” - Dr. Randy Wykoff “That’s our overarching philosophy,” A bit of context and information on Type she said. “We’re not trying to overthrow II (adult-onset) diabetes is instructive. or overhaul people’s lives. We’re not tryThe problem is expensive both financially The scope of work ing to go into a workplace and say, ‘You and emotionally, Cook said, adding that As a part of Governor Haslam’s need to start this program, it’s going to 45 percent of employed people in Sullivan Healthier Tennessee initiative, Healthy cost this much and you have to have this County are either “pre-diabetic” or have Kingsport has been working behind the much participation.’ It literally is about Type II. scenes since 2009 and officially launched small starts. For example, one of them “The average cost of a diabetic in April. Initially a Pioneering Healthier is, ‘do you offer water at your place? Do patient for one year is $13,700,” Cook Communities grant from the Robert you offer a break room where people can said. “That does not address anything Wood Johnson Foundation led to a bring food from home or can store food?’ else—any of the other conditions or an“dream team” traveling to Washington They’re very simple, very easy, and those nual check-ups or anything else, just what D.C. to learn ways to improve community small starts lead to big success.” it would cost to be treated for pre-diabetic health. A volunteer organization was According to Cook and Stuckey, it’s or type II. So if you start multiplying that formed and named Healthy Kingsport in going to take more than an organization by almost 50 percent of your workforce, 2011. Three years later, the team reallike theirs to convince the community of that’s not productive. The healthier ized that in order to stay organized and the importance of its health. It is going the employee, the more productive the effective as one of nine pilot communities to take the combined efforts of school employee. in Tennessee, a dedicated staff person systems, churches and other institutions. “I think workplaces are well aware of needed to be hired. That’s where Cook Healthy Kingsport has already initiated the need to have healthy employees and came in. part of that with the “Morning Mile” it’s a cost savings for them,” she said. “It “We realized a lot of good work is program where students and faculty are helps their bottom line and of course it already going on in Kingsport,” she said. meeting before school every day to run increases productivity. If you feel better, “By being selected a pilot community, we or walk a mile. Cook said that Sullivan you typically enjoy life a little better and have the ability to get some spotlight from County schools have already seen an so everything is improved when someone the state, get some additional resources increase in test scores. is healthy.” to come in and help us with this issue and “For us, we know that to really have “We have some work to do.” that just gives us additional momentum.” SEE HEALTHY KINGSPORT, 12 Reasons for hope exist, though. The grant itself was awarded largely

“

As this region gets healthier, suddenly the region becomes much more attractive to business.

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| COVER STORY

Heather Cook

Perry Stuckey

HEALTHY KINGSPORT, CONTINUED

that stress is caused by financial burdens that plague much of this region. To that the transformation in this region, it’s got end, Healthy Kingsport and the state to be a regional effort,” Stuckey said. “At as a whole are trying to be as realistic the end of the day, if our employees are as possible. The popular move toward healthy and their kids are not, it does not organic eating is not cheap. He said if any help the region. Actually, their kids are single parent, for example, living below our future employees.” the poverty line is trying to feed a family Cook agreed, and added that eduof five, they most likely know that canned cating the public about the dangers of food is not the healthiest option, but it is processed, packaged and fast foods is also the cheapest. crucial. “We have to do something to equalize “I don’t think people realize how a way for our people in our community convenience has hurt us,” she said. who are making $25,000 a year or less, to One of Stuckey’s goals is to get help them make healthy choices and give regional restaurants to buy more locallythem fresh fruits and vegetables so they’re produced foods and provide healthier not buying a bunch of canned goods full options for customers. of sodium,” Stuckey said. “The restaurants have to be engaged One example of Healthy Kingsport’s to help people make healthy choices. small steps turning into something great We’re not trying to legislate what people is Healthy Kingsport’s partnership with eat, but we are trying to tell people what’s the University of Tennessee’s Agriculture more healthy for them,” he said. Extension office in Blountville. Staff One way Eastman is getting its member Jennifer Banks reached out employees to adopt healthier lifestyles is to Cook a few months ago to ask if her by offering $1,000 per family toward a team would like to participate in “Walk health savings account when employees Across Tennessee,” a program designed to and their family members each take a raise up teams of walkers to record their health risk assessment. If employees don’t mileage in an effort to promote physical take the assessment, they lose out on that fitness in the workplace. Banks’ original money. goal was 15-20 teams. When The Busi Stuckey is asking what he and his ness Journal spoke with Cook only three colleagues can do to reduce stress and weeks into the eight-week program, 131 anxiety in his employees. He said most of teams had signed up and 94 million steps 12 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

Dr. Randy Wykoff

had been taken. That’s enough steps, according to Cook, to walk to New Zealand and back, or to walk across the state of Tennessee 35 times. “This is a perfect example of how people are excited about the effort,” Cook said. “They are joining the effort and what better way to talk about a collective impact model, which is our philosophy, than the fact that this isn’t our program? We’re just supporting someone else.”

Hoping for big change, knowing it will take time These examples are encouraging to folks like Stuckey, who care deeply about making sure their employees are not just productive, but as productive and healthy as they can be. “I really, fundamentally believe that if we crack the code in this region, we can be a model for the rest of the nation,” he said. “It’s going to help economic development because if we can get our region more educated with what the governor’s trying to do through the Tennessee Promise Program, and also with what we’re trying to do around health and wellness, and with no state income tax, this can be a very attractive place for a corporation to relocate.” It attracted him several years ago from another part of the country, and he sees no reason the region couldn’t

heighten its desirability through the kinds of changes for which Healthy Kingsport is striving. “I love it here,” Stuckey said. “This is a beautiful part of the country and every time I fly back here on the plane and I see those mountains and how beautiful it is and how friendly the people are, I am glad I’m here. I want to help this region excel, so I’m very happy about this.” Cook said she’s looking forward to getting some longitudinal data on the program’s work. “We’ve been trying to establish baselines so in a couple of years we’ll be able to say if we’ve made any significant progress. Everyone wants to know if the obesity rate has dropped. “We have to wait two years to get county health rankings to see if we’re making a difference, so we are trying to be proactive in that area to determine leading indicators, like, ‘are farmer’s market sales up or down? Are sugary beverages up or down? Sale of tobacco, up or down? Gym membership and usage

of that membership?’” She doesn’t lack confidence as to what is possible. “I strongly believe that health is a thread that permeates every piece of a thriving community. Economic development… people want to relocate here if you have healthy citizens. Quality of life. If you eat right and move more, you feel better. So you get out and participate more. A healthy student is a more productive student. If kids have the opportunity to eat breakfast in the morning or move more throughout the day, there’s not a study that doesn’t show they’re not better.” Wykoff, too, sees reason for hope. “I don’t think I have ever been anywhere where there are more people who care about improving health than here. It resonates for people, and I think you see it across the Tri-Cities. Employers know you need a healthy, educated, drug-free workforce. Schools understand you need healthy teachers and students. We have elected officials who focus on health. We have businesses who focus on

health. Many of our largest employers in the region are health and/or education related. “We have incredible resources here. We are battling, if you will, long-standing issues of poverty and lack of opportunity. Those things don’t change overnight. But as you start seeing more people finishing high school, more people going to college, more and better jobs, the growth of the healthcare industry, those are all good signs.” Wykoff said if health outcomes do indeed improve, as the area’s health factors suggest they will, good things should follow. “As this region gets healthier, suddenly the region becomes much more attractive to business. You have the infrastructure already. You have good weather, good transportation, central location. So imagine being able to add to all those factors a vibrant, health-focused community. You could see a lot more businesses saying, ‘This is where we want to be.’ That’s what I find exciting.”

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| FEATURES

Would you like kale chips with that? Pure Foods moving toward production in late 2015 By Jeff Keeling

s Kingsport aims to radically improve its community health status, it is set to become home to a leading healthy snack producer. Vancouver, B.C.-based Pure Foods announced in March it would locate production, along with research and development, at a new plant in Kingsport’s Gateway Commerce Park. Likely before year’s end, employees will begin making the likes of cheese puffs with 50 percent more fiber and protein and 50 percent less fat, or kale chips that maintain the green’s nutritive benefits using cost-effective processes that will give Pure Foods a market edge. “Nutrientdense healthy snacks,” says the company’s literature. Pure Foods President John Frostad summed it up this way: “We don’t use any artificial ingredients, no artificial colors, no trans fats. Our ingredient deck, if you see our products, is completely clean, but taking that one step further, when you look at functional benefit we are doing an immense amount of R&D in terms of more healthful integration of things that provide protein and lower fat.” Frostad and the other principals behind the company are old hands in the snack business who believe they can operate a successful company while toning down the unhealthy elements of their products and increasing the healthy ones. Call it a bit of absolution if you wish. “The management of the company is older, and a more healthy bent on the products we produce is a legacy we want to leave,” Frostad told The Business Journal. “We’re looking at the things that snack foods have perhaps brought to the North American culture as an issue, things like childhood obesity, and what we’re trying to do is dial that back. You’ll never prevent people from snacking, but if you’re going to snack, snack on something that’s good for you.” A 10-year lease agreement with the Kingsport Economic Development Board (KEDB) includes a “payment in lieu of tax” (PILOT) agreement with the KEDB on the

land and building value, estimated at a total of around $7 million. This means Pure Foods will pay increasing percentages of what the property tax bill would be until ownership transitions to the company. The company will pay full taxes on its equipment immediately. Frostad and his partners wound up leasing the new, 88,000-square-foot building largely because their first foray

Company: Pure Foods (President, John Frostad) Product: Healthy Snacks Location: 88,000-square-foot, new building, expandable Gateway Commerce Park, Kingsport

Company investment:

$22 million Jobs: Production, management, R&D 50-75 by late 2015, 250-300 within several years

Public sector investment: $6.5 million (includes $1.2 million state grant, total to be recouped through local lease/purchase) into the Tri-Cities has been a success. The group had been producing private label, traditional snacks in the Western U.S. and Canada since the mid-1990s when, in 2004, Wise announced it would shutter its Bristol facility and consolidate in Spartanburg, S.C. Frostad and company made an unsolicited offer to buy the Bristol building, and the group – now called Interstate Snacks – kept the operations in Bristol. “Our leadership team there was very quick to redesign the plant and make it much more manufacturing efficient,” Frostad recalled. “We lowered cost and

14 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

improved quality within 90 days of taking over the facility.” The Bristol operations stuck with the original niche of standard private label snacks for large retailers such as Walmart. “We made their Great Value snacks and built our business in partnership with them and other retailers on their own brands.” A key player in that success was Mike Wells, who has become Pure Foods general manager. Meanwhile, as Wells helped build Interstate Snacks to employment of 200-plus, Frostad and his partners made their first foray into healthy snacks, launching “Riceworks” in 2006. The company produced gluten-free products, among other offerings, when that was still cutting edge. Riceworks, “became quite a large brand very quickly, and that generated interest in the company,” Frostad said. So in 2010 they sold to a large private label snack maker, Ohio-based Shearer’s Foods. Frostad served as vice chairman for a couple of years, then found himself contemplating his next move. It has come in the form of Pure Foods. Rather than traditional private-label manufacturing, Frostad said, Pure Foods will do what he called contract manufacturing, as well as some of its own branded manufacturing. That’s a far cry from changing out a few specs for slightly different tortilla chips depending on whether the maker is, say, a Kroger or a Walmart, and it means the company’s own R&D, plant and equipment investment is much more important. “We’ll be partnering with people who want to produce using our assets as opposed to tendering offers to do somebody’s tortilla chip, for instance,” Frostad said. “Most businesses in our industry wouldn’t spend a significant amount on R&D. We have several patents under license. One is for the integration of protein into snack foods, which again is a very helpful trend.” Another patent under license is for an accelerated dehydrating method for transforming raw fruits and vegetables into an ingredient for snack foods, or to process

Pure Foods President/CEO John Frostad, left, talks with then-Mayor Dennis Phillips of Kingsport during a visit to Pure Foods production facility at Kingsport’s Gateway Commerce Park. Photo by Sarah Colson

further as standalone snacks. “An example might be a kale chip where we’re able to take kale, dehydrate it down, maintain 95 percent of the nutritive benefit of that kale and also do it much quicker than conventional ways of dehydration or freeze drying.” Frostad said research and development in the snacking world is accelerating rapidly. The company has worked with universitybased research centers prototyping products, and also worked in Europe, where non-GMO products are required in many cases. But, whereas many traditional food companies are scrambling – he said Kraft deciding to remove all artificial colors and ingredients from its macaroni and cheese as, “testimony to the fact that the food industry is changing, and quite rapidly” – Pure Foods is ahead of the game. While the company will continue keeping up with the latest research and trends in the industry, Frostad said Kingsport will be the nerve center for both production and research. “There’s a very skilled workforce there. Not just Eastman, but a lot of the industry there has brought some very talented folks, and now that second generation is also there.” Pure Foods’ lease-purchase agreement with the KEDB came after KEDB borrowed $6.5 million to purchase and finish out the shell building that NETWORKS-Sullivan County built “on spec” at the commerce park. A $440,000 company investment in the land, and a $1.2 million state grant, are in escrow with KEDB for two years, after which Pure Foods will begin up to 15 years of lease payments on the building. The state grant is contingent on the company reaching prescribed employment levels. Pure Foods is taking a “very frugal” approach to startup, Frostad said. Employment levels will begin in the 50-75 range, but with the building on 35 acres and expandable, Pure Foods could double its building footprint within five years depending on its success in the market. “It would be our hope that within five years we could certainly grow employment to the 250 to 300 person level,” Frostad said. At the targeted employment level, the company would expect to have an annual payroll in the neighborhood of $8 million, NETWORKS CEO Clay Walker said. Walker added that Frostad and company have been helpful as economic developers investigate the possibility of bringing additional food processing jobs and investment to the area.

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We are making a differe Eastman is making a difference. With emphasis on environmental stewardship, education, empowerment, and economic development, the company continues to focus on creating a better future for our world. “Change begins locally,” said David A. Golden, Eastman senior vice president and chief legal officer. “I’m a firm believer that small hinges swing big doors. By focusing on the right projects in the right places, our actions at Eastman are making a difference in the world.” We bias our investments toward those that are catalytic and transformative. We also don’t fear failure as we search for innovative solutions. By leveraging our expertise, resources, and innovative culture and working with strategic partners, Eastman employees are making a positive impact and investing in meaningful ways.

“

I’m a firm believer that small hinges swing big doors.

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To learn more visit our website at www.Eastman.com and click on ‘Sustainability.’

16 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

ence. Eastman and the DM Thomas Foundation are raising money for local children’s charities in Europe through the “Ducks for Change” program.

Eastman supports some of the world’s leading ocean scientists at Woods Hole Oceanographic Institution (WHOI) as they develop innovative solutions to understand ocean processes that affect our world.

Eastman and Engineers Without Borders USA collaborate with community officials in rural Latin America to design and implement a safe and sustainable water infrastructure system.

A component of the Responsible Care® Beijing Manifesto, Eastman China, with help from local communities and their respective city/county Environmental Protection Bureau, continues to strengthen community engagement at site communities with the ‘Open to Public Day’ program.

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The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| FEATURES

$940,000 raised for Niswonger Children’s Hospital Golf tournament, Beach Boys concert eclipse previous record By Scott Robertson

he annual concert and celebrity golf tournament benefitting Niswonger Children’s Hospital in Johnson City grossed around $940,000, the largest total raised in the history of the event. The Mountain States Health Alliance hospital, which opened in 2009, allows children to receive treatment locally for conditions that previously would have forced their families to seek treatment for them outside the region. “One of the mothers who was here this morning told me that if Niswonger weren’t here, she and her family would have had to move,” Alan Levine, CEO of Mountain States Health Alliance, said. For the second year running, the celebrities and local businesspeople who took part in the event met patients and their families in order to fully understand the benefits the hospital brings to the Laura King, mother of NCH patient Maddy King, talks region. From Trae Wampler, a two year about her daughter’s care as Alan Levine, Peyton old thrombocytopenia patient to Maddy Manning and Jason Witten listen. Photos by David Wood King, a four year old neurofibromatosis patient to Devin Wilkinson, a 16-year-old who had what surgeons called the worst to continue to give. brain abcess they had ever seen, the stories “When there are 200,000 children in a of young survivors and their families’ ability region, there are bound to be kids born with to continue living in the region while receiv- special needs,” Levine said. “There are going ing care reinforced the desire of benefactors to be children, young kids and teenagers

Former Atlanta Falcons Head Coach Mike Smith enjoys meeting patient Maddy King. 18 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

who experience life-altering health challenges. A big part of that is being able to keep the family together to deal with the challenge because the resources are available locally.” The event maintains a regional flavor by holding the concert at the Niswonger Performing Arts Center in Greeneville, Tenn., then moving to Bristol, Va., for the golf tournament the next day. “Last year when we had this event, we shared that we were going to use the proceeds to invest in pediatric neurosciences,” Levine said. “A few months after the tournament, we hired the region’s first pediatric neurosurgeon. Devin, the 16-year-old young man we met today, was one of his patients. We have pediatric neurosurgery and neurosciences in part because of the philanthropy from the community.” By the time summer ends, NCH will have added 11 new specialists to its staff, Levine said. “We have two pediatric neurologists. For the first time we have a pediatric endocrinologist coming. We have really been trying to round out the subspecialties locally, because in each case, when the treatment is not available locally, these families have to go a great distance to get it.”

The Beach Boys played a benefit concert the night before the golf tournament.

MSHA, Wellmont seek input on merger plan By Jeff Keeling

Niswonger patient Trae Wampler, who suffers from thrombocytopenia, with Scrubs the Bear at the golf tournament.

The annual fund-raiser is co-chaired by Scott Niswonger, who, alongwith his wife Nikki, are the hospital’s namesakes. “I cannot find the words to express the sincerity of my gratitude to Scott and Nikki,” Levine said. “Many philanthropists write a check, and we appreciate that. But Scott and Nikki continue to make it their priority. It’s a passion they have invested in both financially and emotionally. Other people see that and it makes a difference. I have had a number of people today tell me that they knew when they got involved that this was important, but now it has become a passion. People want to know how to get more involved. That’s great for the hospital, but most importantly, it’s great for these children and their families.”

Denver Broncos quarterback Peyton Manning is inspired by a local patient’s story.

he region’s two hospital systems are seeking public input through four “work groups” centered around key elements of the proposal to create a “health improvement organization.” A series of meetings, along with online input, will center around three broad areas that are seen as impacting the cost of health care in the region – mental health and addiction, “healthy children and families,” and “population health and healthy communities.” A fourth area, Mountain States Health Alliance and Wellmont Health System representatives said, will examine the opportunity to capture funding to improve outcomes in the other three: research and academics. Citizens can learn full details, including ways they can become involved and provide input, at becomingbettertogether.org/get-involved. The work groups began meeting this month and will continue through the end of the year. Each group will be led by a subject matter expert and staffed by members of both systems, as well as master’s and doctoral level students from East Tennessee State University. The merger proposal anticipates a much-enhanced role for ETSU’s health sciences division, partly in hopes of drawing in research dollars. The goal, Wellmont’s Todd Norris and Mountain States’ Tony Keck said, is to build a system best equipped to improve the health of Northeast Tennesseans and Southwest Virginians – outside the hospitals as well as in them. Keck said visits to chambers of commerce and civic clubs by Wellmont and Mountain States CEOs Bart Hove and Alan Levine are good, but don’t reach all the people the systems need to reach in order to craft the most effective plan. “That’s one way to reach the public, but this is another way for people to get even more involved and to set the agenda a little bit themselves in terms of presentations and public comments and so on. We’re looking forward to it. We think we’re going to get a lot of perspectives that we can’t get otherwise.” Work groups will provide regular updates as well as final findings to the Integration Council, a group of executive and physician leaders from both systems who are overseeing the analysis and making preparations for the integration of the proposed combined system. As these groups form, due diligence research, led by the Integration Council and the Joint Board Task Force, continues between Wellmont and Mountain States to establish the proposed new system. The next step is approval of a definitive agreement by both organizations’ boards of directors, after which the systems will enter a government approval phase likely to take through the end of 2015. Norris said a “health improvement organization” that encompasses outpatient care, public health and community involvement is a great opportunity for the region to get “upstream” of health care trends. “This merger really creates a unique opportunity for the two health systems to work together in ways that we never have before in order to be able to facilitate that.”

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| FEATURES

Eastman, UT announce research partnership By Jeff Keeling Eastman Chemical Co. has come in-state for the latest addition to its higher-education based Eastman Innovation Network. Company and University of Tennessee, Knoxville officials announced an initial three-year partnership June 22. UT will benefit from $750,000 in sponsored research endeavors between Eastman scientists and UT faculty and students, while Eastman expects to enhance its research and development capabilities in ways that ultimately provide it an Taylor Eighmy Jennifer Stewart edge in the marketplace. The UT partnership, which follows similar arrangements with North Carolina opportunity for entrepreneurship and also State University and the University of North provide that speed to market that we all want.” Carolina-Chapel Hill, will bring particular Taylor Eighmy, vice chancellor for expertise in the areas of neutron science and research and engagement, said Eastman is an additive manufacturing, along with access to important strategic partner for UT. one of the world’s fastest computers. “The way we conduct R&D with you is During an event at Eastman headquarters, important,” Eighmy said. the company’s chief technology officer, Steven “In many ways as we move into the Crawford, said successful innovation requires modern age with our university having deep, focus on specific strategic areas, adaptability corporate partnerships that are strategic, and a willingness to, “move with a sense of Eastman above all other partners is an example urgency and with entrepreneurship.” He said of the kind of partner we want to have.” the agreement, “allows Eastman to tee up our Proximity to the Spallation Neutron most difficult problems, it allows us to align Source and the Joint Institute for Neutron those to our strategic markets, and it allows Science at Oak Ridge National Laboratory the researchers at the University of Tennessee (ORNL), as well as advances in composites to bring in capabilities that we don’t have to manufacturing research, have positioned UT to basically look through a different lens and solve be a leader in neutron sciences. As an analytical problems in a different way. We will do this tool, neutron scattering can yield insights into through a collaboration that has a very open how some of the basic properties of Eastman innovation type model that will both allow that materials — especially thin films and advanced

composites — interact on the atomic level, which will help further fuel Eastman’s innovation activities. Jennifer Stewart, Eastman’s vice president for corporate innovation, said the partnership with NC State already has yielded multiple patent applications and is on the cusp of producing its first commercial offering. It leverages NC State’s strengths in design, chemistry and materials science, and she expects similar benefits to both Eastman and UT in the areas of neutron science and computing. “Getting those extra perspectives helps us accelerate our processes and it helps us have a different perspective than we have just investing in everything ourselves,” she said. “So these are absolutely essential to our front-end development and even our later-stage innovations.” Neutron science and supercomputing, Stewart said, “apply to everything, whether it’s our manufacturing processes, our products (or) the use of our products in an application. Where we see the power of the additive manufacturing capability at UT-Knoxville as well as the neutron science is how our materials are used in a customer’s application – studying at an atomic level what your products are doing in the application. The evolving piece is more than just applying those to the right solutions.” Eastman expects to issue its first call for research proposals from UT later this summer and select the initial class of projects for funding this fall.

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Country Club at Bristol changes hands By Scott Robertson The Country Club at Bristol has been in limbo for the better part of a decade. But after a pair of transactions July 1, members hope a new era of stability is dawning. Local businessmen Roscoe Bowman, Tim Carter and Mitch Walters purchased the club from TruPoint Bank and immediately signed a 10-year lease to Integrity Golf, a management firm based in Orlando, Fla. “Roscoe, Tim and I probably operated this golf course the shortest amount of time in history because we closed on the course yesterday at 3 o’clock and the lease was affective at 3:01,” said Walters after a July 1 news conference. “We’ll say that this was an $11 million project in the beginning, and we bought it for significantly less than that. We won’t disclose the exact amount but the whole complex has a value of $11 million.” Integrity operates the Crockett Ridge course in Kingsport, along with 31 others nationwide. CEO Gene Garrotte said the priorities for Bristol will include a rebranding and other strategies to broaden the membership base. The Country Club at Bristol is the oldest continually operating The principals: (L-R) Jack Davis, Jr., Roscoe Bowman, Mitch Walters, Tim Carter and Gene Garrote. country club in Tennessee.

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| FEATURES

Time capsule opening marks Chamber centennial By Jeff Keeling and Scott Robertson

n august yet jovial group of former board chairs joined other chamber members; local, state and federal government leaders and other dignitaries for the Centennial celebration of the Chamber of Commerce Serving Johnson City, Jonesborough and Washington County, July 8. Speakers representing the private and public sectors extolled the Chamber for the crucial role it has played in the community’s growth and prosperity. Congressman Phil Roe, whose political career began across the street from the Chamber headquarters at city hall, told a crowd of around 150 business and community leaders, “I have had a chance to work with the Chamber and watch business development here in Johnson City for the last 20 years. (Chamber President) Gary (Mabrey) has been an amazing leader of this Chamber for decades now and

the entire city has been blessed by his leadership.” Mabrey returned the favor, lauding the collaboration between the private sector, represented by the Chamber, and government. Gary Mabrey digs into the time capsule as Richard Manahan talks about its contents. Photo by Scott Robertson Many of the smiles and memories were elicited by the opening of a time capsule that had been Mabrey said as the pair pulled out photo filled with memorabilia from the Chamber’s after photo, copies of the Johnson City 75th year in 1990 and then hidden away for Business magazine, and treats such as an a quarter century. oversized championship ring commemorat The celebration followed a quieter ing the East Tennessee State University meeting inside Mabrey’s office during the men’s basketball team’s success. lunch hour. It was then that Mabrey and In the end, Mabrey said he had three his 1990 chairman, Richard Manahan, took things to say to the community on behalf their first look at what had gone into the of the Chamber. “Thank you. Thank you. time capsule all those years ago. Thank you.” “There’s some great things in there,”

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Dennis Phillips, flanked by Kingsport City Manager Jeff Fleming (left) and Kingsport Area Chamber of Commerce President Miles Burdine, at Phillips’ June 18 retirement celebration. Photo by Bill Derby

Dennis Phillips era ends in Kingsport By Jeff Keeling and Scott Robertson

ingsport’s outgoing mayor, Dennis Phillips, was feted June 18 at the MeadowView Marriott Conference Resort and Convention Center. A host of friends and colleagues stated their appreciation for his decade of service. Miles Burdine, president of the Kingsport Area Chamber of Commerce, worked with Phillips on many economic development projects. He praised Phillips’ pro-business policies and tireless dedication to creating a better quality of life in the Model City. “To summarize what’s happened under Mayor Dennis Phillips in the last 10 years has been a simple word: progress,” Burdine said. “Things have happened, our population has grown, Kingsport Center for Higher Education, the Regional Center for Health Professionals, the Regional Center for Advanced Manufacturing – the list goes on and on and on of the things that have been accomplished during his watch. You can add to it the Kingsport Aquatic Center, revitalization of downtown, our new building (shared by the Chamber and the city schools administration) – it’s endless, and I’m sure I’ve forgotten something. It’s one simple word – progress.” Paul Montgomery, a former Eastman Chemical Co., vice president now with Northeast State summed it up more succinctly, saying, “Dennis Phillips will be a real tough act to follow.” No one knows that better than John Clark,

Kingsport’s newly elected mayor, who said, “Dennis has done so much for our city. Under his leadership the city has really bloomed and prospered over the last 10 years, and it’s given us a foundation from which to build upon moving forward. He has been so successful, and he’s such a great guy. “When I think of Kingsport,” Clark continued, “I think of Dennis Phillips. To me, he’s Mr. Kingsport. I’ve been very honored to have served with him on the board for the last three years, and I know that even though he’s not going to be officially mayor, I am going to try to use his expertise and keep him on my Rolodex so that we can continue to communicate, because he has so much knowledge and so much experience with all the city’s partners that I think he’ll be a great asset to the current board and to me personally.” Pal Barger, Phillips’ longtime friend and owner of the Pal’s Sudden Service restaurant chain, agreed in 2009 to put $400,000 toward what is now the Pal Barger Regional Center for Automotive Programs as part of Phillips’ push to create education and training opportunities in Kingsport’s downtown. He said Phillips deserves credit for the training projects that have reinvigorated downtown. “It seems like 10 years is a long time, but you get all that done in 10 years and it’s pretty significant.”

The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| ON THE MOVE Administration Beth Rhinehart has been selected as the Bristol Chamber of Commerce’s new CEO. Rhinehart, a life-long Bristolian who has served as Wellmont Health System’s director of Government Affairs since 2008, will assume her new role with the chamber in the coming weeks. She has served as a chamber board member, was chairman of the government affairs committee and chairman-elect. “We are extremely excited about having Beth accept our CEO position,” said Board Chairman Jim Maxwell. A search committee comprised of Maxwell and four other board members vetted more than 50 applicants for the Chamber’s top leadership position. “We interviewed eight exceptional candidates, all with excellent credentials and local ties,” Maxwell went on to say. “Beth was the best fit for the job. ”

an adoption program that develops and finalizes adoption placements for troubled youth.” Trantham becomes division director of Tennessee Children and Youth Continuum Sherri Feathers Services. “Kim has recruited foster families and also helped hundreds of children in foster placements. We’re confident she will continue to strengthen programs for children,” Kidd said. Kim Trantham

Kristin Wright has been named the director of admissions at Milligan College. Wright Frontier Health is pleased to announce will provide strategic new responsibilities for Sherri Feathers direction for the college’s and Kim Trantham. recruitment efforts and Feathers transferred to the position assist in the development of division director of Specialty Services of marketing and comoverseeing the Crisis Stabilization Unit, munication strategies for 24/7 Crisis Response, and Frontier Health’s recruitment. Kristin Wright Alcohol & Drug Residential Treatment “Kristin brings Centers Magnolia Ridge and Willow Ridge not only the skills and and Frontier’s Community Justice Program. passion needed for this position, but a heart “Sherri brings a wealth of experience in the for Milligan’s mission to prepare the next development and administration of residential generation of servant leaders,” said Dr. Lee services, crisis management, contract manage- Fierbaugh, vice president for enrollment ment, clinical oversight and quality improvemanagement and marketing at Milligan. ment,” said Frontier’s CEO Teresa Kidd, Ph.D. “She was instrumental in the development of Legal the TRACES therapeutic foster care program D. Bruce Shine and Rodney B. Rowlett that was unique to our area at that time. She of the Kingsport law firm of Shine and also developed and implemented a respite Rowlett announce that Tommy Lee Hulse, program for youth at risk of state custody, a former workers’ compensation specialist program for high-needs adolescent males and with the Tennessee Department of Labor and

24 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

Workforce Development has joined their firm as a civil and family mediator and workers’ compensation consultant. Hulse worked with the TDLWD for 22 years. He served on the Tennessee Supreme Court Alternative Dispute Resolution Commission from 2007 to 2015. In addition to his mediation practice, he is an American Arbitration Association and Federal Mediation and Conciliation Service employment law arbitrator with numerous published arbitration awards.

Sales Asbury Place retirement community in Kingsport recently named Kim Golly regional sales director. She will provide sales and marketing support and coaching to the sales Kim Golly teams in Kingsport and Maryville while continuing her direct sales effort in Maryville. “With her knowledge and passion for our industry and upbeat personality, Kim is a tremendous asset to Asbury Place,” said Marjorie Shonnard, COO for Asbury, Inc. BCTI has named Cyndee Purdy-Godsey account executive. She has more than 20 years experience in telecommunications and has worked with local, regional and global Cyndee Purdyaccounts for projects Godsey consisting of VOIP systems, infrastructure wiring, and cloud solutions.

| AWARDS & ACHIEVEMENTS

Your Success is Our Focus

K-VA-T Food Stores rakes in national awards The Food Marketing Institute (FMI) recently presented its most distinguished award in public affairs, the Glen P. Woodard, Jr. Award, to Food City President and Chief Executive Officer, Steven C. Smith at FMI Connect, the industry’s premier event. Throughout his 36 years with Food City, Smith’s leadership extends well beyond his work at the company. Smith has been an incredibly effective advocate on behalf of the food retail industry, actively leading efforts in Steve Smith each of his operating areas in local, state and federal government activities, said FMI Senior Vice President of Government and Public Affairs, Jennifer Hatcher. “Perhaps one of Smith’s most creative and hard-fought victories was completed last year – getting wine in grocery stores in Tennessee,” Hatcher said. “Steve won’t take ‘no’ for an answer when it comes to change that will benefit his customers, his associates, his company or his industry.” Describing Smith’s passion for grassroots, Hatcher continued, “Steve used 5-foot wine bottle cut-outs as a visual to complement his grassroots campaign, ‘Red, White and Food,’ that engaged 30,000 customers and voters in Tennessee to support the sale of wine in grocery stores. Smith testified in the state legislature and then helped lead a store-to-store, county-by-county campaign that culminated with 80 counties voting for wine in grocery stores.” At the federal level, Smith was one of the first FMI members to agree that the battle over swipe fees was one the food retail industry had to engage, as evidenced by his testimony on Capitol Hill in 2007 before the House Judiciary Antitrust Task Force. Smith argued, “The conventional wisdom tells us, that as volume grows, prices should fall, but instead, credit card companies have created much greater volume and raised fees and costs substantially.” Smith continues to advocate at all levels of government for the industry – in Washington, D.C., in state capitols, in city and county governments and on the campaign trail with candidates. “Steve is a very big advocate of our industry,” said Fred Morganthall, president, Harris Teeter LLC. “He has a clear understanding of what our industry needs in the way of rules and regulations, and clearly he speaks for our customers and he speaks for our communities. “Steve’s a leader. As chairman, Steve stepped up and worked with his officer group and made clear decisions that affected the future of FMI.” The Food Marketing Institute (FMI) also announced winners of the 2015 Store Manager Awards, which recognize exceptional supermarket store managers who generate sales growth; provide outstanding customer service; contribute to attaining company goals; and are an integral part of the communities in which they serve.

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| AWARDS & ACHIEVEMENTS AWARDS, CONTINUED

Manager People’s Pick Award. Profiles and photos of the 10 Store Manager Awards finalists were posted to the FMI Facebook page. The post with the most “likes” after one week received the People’s Pick Award. Tony Gilliam, produce manager for the Weber City, Va. Food City was recently named a grand-prize winner in the 2015 Retail Produce Manager of the Year Awards. Each year, United Fresh Produce Association recognizes the top 25 produce managers within the industry during its annual convenMark Hubbard tion. Five grand-prize winners are selected Mark Hubbard, Food City store manager from among the field of competitors. This in Kingsport, recently earned two awards year’s convention was held in Chicago, June from the Food Marketing Institute, which 8-10. recognizes exceptional supermarket store “These men and women represent the managers who generate sales growth; provide best of the best in our industry,” said Tom outstanding customer service; contribute to Stenzel, United Fresh president and CEO. Tony Gilliam attaining company goals; and are an integral “Through their creative efforts and interacpart of the communities in which they serve. tion with customers, they’re making produce supermarket chains, commissaries and Hubbard took the Category B: (50-199 a centerpiece of the retail shopping experiindependent retail stores throughout the Stores) Award and the People’s Pick Award. ence and wowing consumers every day.” industry. The award recognizes outstanding This year, FMI added an additional category The candidates were selected from achievement in the areas of produce merto the awards program called the Store hundreds of nominations submitted by chandising/marketing, community service

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Eastman Receives Top Honor for college and career readiness Every year, ACT recognizes the achievements of four national exemplars for College and Career Readiness: a student, a high school, a community college and an employer. On June 9 in Washington, D.C., ACT recognized Eastman as the National Employer Exemplar. This annual program honors a distinguished group of students, schools and employers for exemplifying what is being done in states across the country to improve individuals’ prospects for success. Eastman is the only employer in the nation to receive this prestigious distinction. The national finalists were selected from nominations by each of 34 participating states across four award categories: Student Readiness (student), College and Career Transition (high school), Career Preparedness (community college) and Workplace Success (employer). Each of these categories represents a critical juncture in the college and career readiness continuum. The exemplars were determined by the 2015 National Selection Committee comprising education, business, and political leaders. “At Eastman, we are committed to growing excitement and engagement in STEAM areas of science, technology, engineering, arts and mathematics while exploring the best ways to meet the educational needs of our communities,” said David Golden, senior vice president and chief legal officer at Eastman. “We believe well-aligned strategic partnerships have the ability to leverage resources in unique and helpful ways that can have significant, long-term impacts. Through shared partnerships, Eastman remains very active in support of Pre-K through 12+ educational initiatives through the Putting Children First partnership (PCF), in place since the early 1990s. Recently, Eastman partnered with the Drive to 55 Alliance working to support and reach a statewide goal of 55 percent of Tennesseans with an earned college degree or certificate by 2025. The state of Tennessee, through the Tennessee Promise program, will provide two years of tuition-free education at a community college or technical school. Eastman currently leads the statewide effort with the most mentors provided by a single corporation. Globally, the company works directly with school systems in its site communities and offers career expos, leadership training for students and faculty, teacher externships, environmental stewardship education, Robotics competitions, the Eastman Scholar MathElites program, and Eastman’s GEM4STEMTM program which allows employees 40 hours per calendar year to go into the classroom and provide support to students and teachers. Eastman offers dedicated training and development focused on building the skills and knowledge of employees through classroom courses, online courses, just-in-time training, tuition reimbursement, leadership development and other training and development resources. With a focus on individuals, the company places a strong emphasis on coaching and mentoring employees through their careers “Eastman and Northeast State Community College have a longstanding partnership with other industry and educational institutions to provide a quality education to future workers in advanced manufacturing careers,” said Dr. Janice Gilliam, president at Northeast State.

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The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| MED BRIEFS

Kim Rhodes and Garth Eddy, both echocardiographers; Vickie Henegar, director of Radiology; and Dr. Gregory Uhl, cardiologist

Takoma offers new service line A new service at Takoma Regional Hospital called transesophageal echocardiography (TEE) will provide more detailed ultrasonic images of the heart. “TEE is a type of echocardiogram that uses a long, thin ultrasound transducer that is inserted in the esophagus to allow us to see high-quality, moving pictures of the heart and its blood vessels without interference of the lungs or ribs,” Vickie Henegar, director of Radiology, explained.

Key Wellmont boards take on new members Terry Begley, who retired as vice president of global supply chain and chief procurement officer of Eastman Chemical Company, has been named chairman of Holston Valley Medical Center’s board of directors. In addition, the Holston Valley board Begley is welcoming four new members. They are: Jennifer Bogni, director of global procurement for Eastman; John Clark, Kingsport’s new mayor and a successful businessman for 35 years; Joel Conkin, a lawyer and shareholder with the Wilson Worley firm; Dineen West, principal architect with Cain Rash West, who has worked on a host of projects in the region. Bristol Regional Medical Center has added four members to its board of directors to replace individuals whose terms have ended and continue the momentum the hospital has attained. The new board members are: James Kneff, M.D., an emergency department physician at the hospital; Chris Lee, chief operating officer at Bill Gatton Automotive group; Pitchar Theerathorn, M.D., an internal medicine physician on the Bristol Regional medical staff; Marcus Williams, M.D., a cardiothoracic surgeon with the Wellmont CVA Heart Institute who practices at the hospital and is president-elect of the medical staff.

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The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

| THE LAST WORD

No pain, no gain when it comes to hospital merger By Jeff Keeling

This month’s cover story on Healthy Kingsport reveals the linkages between a community’s (or a region’s) health and its prosperity. Tied up in the language and descriptions surrounding our region’s two dominant hospital systems’ efforts to gain approval for a merger are some highly similar themes. Should the regulators ultimately decide Wellmont Health System and Mountain States Health Alliance can indeed be “Better Together” when it comes to quality, availability and cost of health care for area citizens, the new system can, presumably, help us become healthier and wealthier. Here’s a rub, though: Just as some pain and tough decisions are prerequisites for individual fitness, so too shall they be required for a merged system to deliver on its promises – including the prosperity of its own rank-and-file employees. Let’s jump ahead a few years for a hypothetical. Wellmont and Mountain States have been replaced by a “health improvement organization.” The dust has settled and the new entity’s leaders are identifying specific areas where cutting people, locations or services is needed to eliminate unnecessary duplication of services. Remember, eliminating unnecessary duplication of services was (quite justifiably) a primary rationale for the merger. In simple terms this means, as my esteemed colleague who shares his valuable ruminations at the front end of this magazine each month might say, “someone’s ox is going to get gored.” Or as early and influential merger advocate Bill Greene said late last summer, “there’s going to be blood in the creek.” Human nature being what it is, the “gorees” are unlikely to just go quietly into the night no matter how logical and necessary the organizational decision may be. Fee for service medicine and the particular MSHAWellmont dynamic over the past 15-plus years allowed for significant unnecessary duplication of services. Both the people who earn a living providing those services and the leaders within their communities quite naturally have developed a vested interest in their continuance. There is a corollary to the issue of eliminating unnecessary duplication: Each system today has some processes and practices that work better than they do at the other system. The best way forward with respect to

30 The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com

operations management will almost certainly require a willingness by people from both former “sides” to adopt the others’ approach – in large part if not wholly – for the new organization to be its best. Getting there means being willing to acknowledge somebody else’s way was better. In either case, you’re talking about short-term sacrifice for long-term gain. I believe when some of those decisions start coming down the pike there will be pressure, including from influential quarters, to backtrack. The day of the merger announcement April 2, I asked the chiefs of the two organizations how they would handle such a scenario. MSHA’s Alan Levine said, “we don’t have the luxury of running away from the tough decisions,” and, “sometimes failing to make the tough decisions makes it even worse for the people that are impacted.” Both true. He added, though, that the current finances remain healthy enough that, “over time, we have the ability to be very rational and methodical about what we do.” His Wellmont counterpart, Bart Hove, said, “our staff members, both physicians and employees, understand the term sacrifice. They sacrifice every day, and that’s part of their mission in life.” In response to Levine I say, you do have some time, but the time for tough decisions will come sooner than you want it to, and attrition alone won’t get you where you need to be. To Hove I say, sacrifice is one thing when everyone is part of a longstanding culture and organization – it’s something else entirely when two former rivals have merged and it’s your half’s turn to take one for the new team. Fortunately, both these systems are replete with strong clinical programs. So while that may make some of the decisions very difficult, it should mean that the ox-goring can be applied rather equitably. Achieving the financial margins needed to redirect resources toward new clinical endeavors, research and yes, better pay, will require bold action. People will complain, though. They’ll try to prevent necessary change from occurring, and some of those doing it will be influential. That will be the time for the strong, objective, fair-minded leaders with a firm commitment to excellence and efficiency to step to the fore. They may be cast as heartless villains, but if the organization’s overall vision is strong – if it’s doing the right things for the right reasons, primarily population health and a viable system with competitive pay and benefits – they’ll actually be heroes. And people may even acknowledge it someday.

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