For the first time in its history, the Medical University of South Carolina is buying other hospitals.
The MUSC board voted late Monday to buy four of them — one each in Lancaster, Chester, Florence and Mullins — for an undisclosed price.
The deal, which is scheduled to close by March 31, would expand MUSC's reach to almost every corner of the state. It was largely viewed Tuesday as a positive sign for rural and underserved communities that will be directly affected by the change in ownership.
At least one state expert said it's not surprising that MUSC is in a buying mode. Mergers and acquisitions have become a strategy for health providers to strengthen their purchasing power with vendors and exercise more control over each portion of their patients' care.
"If you look around the national marketplace, it shouldn't be surprising at all," said Thornton Kirby, president and CEO of the S.C. Hospital Association.
MUSC already is competing with other large-scale systems in the state, such as Roper St, Francis and Trident Health in the Charleston area. Many are looking at ways to expand their reach.
For instance, Greenville Health System and Palmetto Health recently announced a new name for their consolidated operation — Prisma. Together, those systems have 2,800 beds. And one of Prisma's two CEOs said the venture is setting its sights beyond South Carolina.
Meanwhile, MUSC patients have historically had to travel from every corner of South Carolina for the highly specialized care that, in many cases, is only offered in Charleston. Now, MUSC will have an outpost about 175 miles away from its home base, near Charlotte, and several other locations.
In a statement late Monday, Dr. David Cole, the president of MUSC, said the acquisitions are part of the “emerging MUSC Health network.”
A document authorizing the purchase of Springs Memorial Hospital in Lancaster, Chester Regional Medical Center in Chester, Carolinas Hospital System in Florence and Carolinas Hospital System-Marion in Mullins said that MUSC also has agreed to buy nearby clinics and other ancillary services.
No state funds will be used, according to MUSC, but the financing method has not been approved or disclosed.
Once the acquisition is finalized, MUSC will employ about 16,400 workers. The purchase will double the medical university's bed count, not counting the future 250- and 150-bed hospitals planned for the Charleston region.
"We recognize the need for high-quality, low-acuity hospitals for patients in other parts of the state," MUSC spokeswoman Heather Woolwine said in a statement. "Supporting and enabling the best care locally is not only the right thing to do, but also a necessity. By adding these four hospitals to the MUSC Health network, we will enhance access to our top-quality health care in more convenient locations for Upstate and Pee Dee patients and families."
The medical centers also "will provide training sites for generations of health care providers," she added.
Kirby of the state hospital association said the deal provides some relief to the residents who use the four hospitals and the workers who staff them.
"It provides a stabilizing force and some clarity in the face of uncertainty. They want to know that they're going to have a hospital," he said.
The seller is Community Health Systems, a large, publicly traded medical chain based in Tennessee that has operated in South Carolina since its purchase of Springs Memorial in 1994. It will be exiting the state once the MUSC sale is finalized.
Sate Rep. Mandy Powers Norrell of Lancaster said she had no idea her local hospital was for sale.
"I didn’t know they are in the hospital buying business," she said of MUSC. "For my community, I’m glad."
She said she hopes the change in ownership will bring down patient prices at Springs Memorial, which is among the U.S. hospitals with the highest charges to Medicare, The Herald reported.
Graham Adams, CEO of the S.C. Office of Rural Health, said he was especially happy to learn MUSC has agreed to buy the smaller medical centers in Chester and Lancaster. He noted that hospitals can serve as an "anchor" for pharmacies, physician practices and other services.
"We're optimistic that these hospitals will experience greater financial viability by being part of the MUSC system," Adams said.