The Medical University of South Carolina is set to spend up to $137 million to buy four hospitals in a first-of-its-kind acquisition for the Charleston-based public health care provider.
The State Fiscal Accountability Authority on Tuesday gave its approval for the deal to proceed Tuesday. Documents posted online offer the first look at the price MUSC is willing to pay for the hospitals as the system works to finalize the transaction.
MUSC representatives did not release the figure when it announced the acquisition last year. If finalized, the deal would mark the first time ever that MUSC has bought out another hospital.
Dr. Patrick Cawley, CEO of MUSC Health, said the amount disclosed this week represents the most MUSC would set aside for the purchase from Community Health Systems.
"It is not a final sale amount, more of an 'up to' amount," he said in a statement. "We remain on track in our discussions and negotiations and anticipate closing on this sale at the end of February."
The hospitals in Lancaster, Chester, Mullins and Florence about would be wrapped into the MUSC network. They employ about 2,000 workers. MUSC already employs close to 14,000.
The State Fiscal Accountability Authority had to give its approval.
MUSC would acquire all of the South Carolina assets from Community Health, which could include doctor's offices and other facilities. Lisa Goodlett, chief financial officer of MUSC Medical Center, told the fiscal authority on Tuesday that MUSC would not be assuming any of the hospitals' existing debt.
Community Health is a publicly traded company based in Tennessee that owns, operates or leases more than 100 hospitals.
Once the sale with MUSC finalizes, it will exit South Carolina entirely. The company also recently sold the two Mary Black Health System hospitals in the Upstate for $70 million to Spartanburg Regional Healthcare System.
The sale of the six South Carolina hospitals is part of a strategy by the for-profit company to improve its bottom line.
Cawley told The Post and Courier the four MUSC plans to buy are in a good financial position. He also said the purchases expand's MUSC reach around the state.
"It puts MUSC in the community hospital and health business, whereas today we're more in the academic business," he said.
Still, it's a tough time for hospitals, especially in rural areas: Across the South, 53 rural hospitals have closed since 2010.
MUSC plans to finance the purchase with a loan from the U.S. Department of Housing and Urban Development, according to a letter sent to the Fiscal Accountability Authority. This is the fourth time MUSC has funded projects this way, according to documents. it used the same financing to fund the construction of the $385 million MUSC Shawn Jenkins Children's Hospital, which is scheduled to open later this year.
MUSC also plans to spend $325 million on a new hospital in Berkeley County.
The out-of-town hospitals and the future hospitals will increase MUSC's bed count to above 1,800 — more than double its current capacity.