GHS announces partnership with Palmetto Health, plans to form state’s largest health system

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The Greenville Health System (GHS) and Palmetto Health in Columbia announced June 15, 2017, plans to form the state’s largest health system, serving 1.2 million patients annually and earning a projected $3.9 billion in annual net revenue.

As South Carolina’s two largest health systems, GHS and Palmetto together have 13 hospitals and hundreds of physician practices and ambulatory centers. If their “merger of equals” is approved by the Federal Trade Commission, the new, nonprofit health care company will be one of the 50 largest health systems in United States, says GHS Chief Executive Officer Michael C. Riordan.

The new organization will employ 2,800 physicians and 28,000 other staff — making it the largest private employer in South Carolina.

The new health organization will serve about one-third of South Carolina’s Medicaid population and provide hundreds of millions of dollars in charity and uncompensated care.

“Our board voted unanimously to pursue this, and they’re excited about it,” says Frances Ellison, chair of Greenville’s Strategic Coordinating Organization that governs GHS.

“We’ve been looking at all of these issues for a number of months, and we’re delighted to find a partner we think we could work with,” Ellison says.

There will be a new name and a new board for the GHS-Palmetto health system, but those likely will be decided later this year. “My hope is we’ll be able to close the transaction at the end of the calendar year,” Riordan says.

The partnership potentially could save $120 million in health care costs, Riordan says.

An estimated half of South Carolina’s population will be within 15 minutes of one of the new health system’s hospitals, doctor practices, or other facilities. The new company could invest up to $1 billion over the next five years in programs, technology, and other resources to improve the health of people in the Midlands and Upstate.

“Both organizations are committed to ensuring our community members receive the health care they need, regardless of their ability to pay,” Palmetto Health Chief Executive Officer Charles D. Beaman Jr. said in a media release.

Another benefit to the community is that the two health systems could offer services that, individually, were not feasible. For example, the new, larger health system could possibly offer transplant services or certain children specialty services that are not available, currently, anywhere in South Carolina. They also could expand health care and medical school training and expand clinical trial research.

“We believe we could attract [new medical-science] businesses and be an economic driver for our communities on the bioscience side,” Riordan says. “We could attract individual clinicians and companies that might want to relocate here and partner with us because we will have such a significant portion of the patient population in both communities.”

The FTC will investigate whether or not the partnership and new health system will stifle competition and patient choice. Riordan spoke with leaders at Bon Secours St. Francis (BSSF) in Greenville, AnMed in Anderson, and Spartanburg Regional Health System in advance of the announcement to give them a heads up.

“They have been incredibly supportive and see the need for what we’re doing for South Carolina,” Riordan says. “There is nothing better for us than a strong Spartanburg, Bon Secours, or AnMed, and from a competition standpoint, they will keep us on our toes, and I hope they say we do the same thing for them.”

Health care job growth continues to be strong nationwide, and the health system’s overall job growth will continue after the change — even if some areas lose staff, he says.

The partnership will make financial sense, even if the Affordable Care Act (ACA) is changed, Medicaid funding is cut, and incentives for health population and prevention efforts are eliminated, Riordan says.

“Under the current Affordable Care Act, we figured out how to make it work,” he says. “What the market is telling us is we have to double-down on prevention services.”

The health systems have created a website, scbettertogether.org.

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