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Prisma Health growing with purchase of two hospital systems in Columbia, Camden

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Mark O'Halla

Mark O'Halla is CEO of Prisma Health. The hospital system, South Carolina's largest, is purchasing Providence and KershawHealth. Provided

COLUMBIA — South Carolina's largest hospital system has signed an agreement to purchase Providence Health in Columbia, a move that will take the Capital City down to two major health care providers.

This latest merger comes just a couple of years after the joining of Palmetto Health in Columbia and Greenville Health System to form Prisma Health. The group provides health care in the Midlands and Upstate.

In addition to the Providence acquisition announced Thursday, Prisma said it will buy KershawHealth in Camden. Terms of the sale were not released.

“We are delighted at the prospect of welcoming the Providence and KershawHealth teams to the Prisma Health family,” Prisma Health CEO Mark O’Halla said in a statement. “Providence and KershawHealth are known to share our commitment to improving patient experiences, clinical quality and access to care."

Providence Health, founded in 1938 by the Catholic Sisters of Charity of Saint Augustine, has been owned by Tennessee-based for-profit hospital system LifePoint since 2016. LifePoint also took ownership of KershawHealth in 2018.

“Being part of a regional system allows us to offer our patients access to a wider array of services and explore new ways to improve the health and well-being of people of all ages," Terry Gunn, market CEO for KershawHealth and Providence Health, said in a statement.

The acquisition, which will leave Lexington Medical Center as Prisma's main Columbia-area competitor, will require legal and regulatory approvals.

Gov. Henry McMaster, who appoints board members to the state health agency that reviews hospital acquisitions, praised the sale.

“Ensuring that we maintain access to health care in South Carolina’s rural communities has been a priority of my administration, but we’ve always known that the private sector would be our most important partners in reaching that goal,” he said in a statement issued through Prisma. “This proposed acquisition would provide new opportunities to enhance clinical quality and improve access to affordable care for patients in the Midlands and beyond, but it also shows that Prisma Health is committed to the communities it serves, and for that, we should all be grateful."

Providence Health adds two hospitals to the Prisma system, along with multiple clinics. KershawHealth adds a hospital and clinic locations in Camden, Elgin, Lugoff and Kershaw.

As a big hospital system gets bigger, competitors and lawmakers raised alarms.

"Prisma Health’s potential acquisition of Providence Health and KershawHealth raises concerns because, as they become a larger corporate conglomerate, we believe it will adversely affect access, quality and care for patients and families across the Midlands,” said Tod Augsburger, CEO of Lexington Medical Center, Prisma's main rival in the Midlands.

State Sen. Darrell Jackson, D-Columbia, took the podium at the Statehouse on Thursday and voiced outrage about a deal he said creates a health care monopoly.

"Primsa Health, one entity, may control three-quarters of all the health care providers in this market. They’re buying up doctor offices and others," he said. "At some point, we ought to examine whether these health care monopolies are good for the citizens of South Carolina."

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The Kershaw County government issued a statement condemning the sale that gives KershawHealth its third owner in four years.

"The high ownership turnover continues to create untold emotional strain on our citizens as to where their healthcare is coming from and who is treating them," the statement said. "As in most mergers and acquisitions, each sale of the hospital has resulted in less healthcare services provided to our community."

Kershaw County leaders said they were kept in the dark about the sale by the hospitals and state regulators. The county said it will no longer get $1 million a year for emergency medical services from the hospital.

Before this purchase, Prisma was serving 1.2 million patients a year, bringing in $3.9 billion in annual revenue. The hospital system had more than 2,800 beds, according to S.C. Department of Health and Environmental Control.

Adding Providence and Kershaw would bring the system to 3,263 beds.

By comparison, the Charleston-based Medical University of South Carolina — the second-largest provider in the Palmetto State, has half that, with 1,600 beds across its system, according to its website.

MUSC has been on a similar mission, purchasing four hospitals in a $137 million deal early last year. About a year after that deal was done, MUSC's trustees approved another $10 million to build a new hospital in Indian Land, near the North Carolina border. 

As many hospitals face rising costs and razor-thin margins, consolidation has been treated as a solution. Bigger hospital systems have better purchasing power. The trend is true in South Carolina, where just a handful of hospitals are independent today.

“Prisma is becoming a gigantic system within this state and one provider, and MUSC on the other end is becoming a big provider by what they’ve taken over," Senate Minority Leader Nikki Setzler, D-Lexington, said."The question is, are they going to control all the health care in this state and is that good for this state?"

The creation of Prisma has not been without its difficulties.

When O'Halla stepped in as CEO this past summer, he said it was his goal to bring the two previously separate Columbia and Greenville systems under one roof. That came as a number of high-level administrative layoffs as headquarters operations were consolidated in Greenville.

Jackson was particularly upset by Thursday's announcement because it follows additional layoffs, many of them his constituents.

In January, the hospital system announced the dismissal of 327 employees from its workforce of 32,000 and the elimination of another 200 positions through attrition.

“What is so unfortunate is many of them could not afford to lose their jobs when they did, some just before the holidays — cafeteria workers, administrators, secretaries lost their jobs," Jackson said.

Seanna Adcox and Mary Katherine Wildeman contributed to this report.

Jessica Holdman is a business reporter for The Post & Courier covering Columbia. Prior to moving to South Carolina, she reported on business in North Dakota for The Bismarck Tribune and has previously written for The Spokesman-Review in Spokane, Wash.

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