Business Roundup: LifePoint Health Enters South Carolina Hospital Market

Under LifePoint's deal finalized this month with Sisters of Charity Health System, Providence Hospitals will change its tax status to for-profit and will pay taxes, but will retain its Catholic affiliation, mission, and charity care mandates.

LifePoint Health has entered the South Carolina market with the recently finalized acquisition of Providence Hospitals, a two-hospital Catholic system in Columbia, SC.

Jeff Seraphine, Eastern Group director for LifePoint, says the timing seems right for the Nashville-based for-profit hospital chain to expand into a new state.

"South Carolina has an attractive operating environment and one in which we felt very comfortable about going in and being successful and being able to operate consistent with our mission to make communities healthier," Seraphine says.

"It really is similar to what we experienced looking at other states. We were not in North Carolina five years ago and today we operate nine hospitals in that state. It has become a fantastic partnership for us there, one in which we are excited that we decided to move into that state. We think we will look back in five years from now and say the same thing about South Carolina."

Under the deal finalized this month with Sisters of Charity Health System, Providence will change its tax status to for-profit and will pay taxes, but will retain its Catholic affiliation, mission, and charity care mandates.

Seraphine says many not-for-profit health systems are increasingly more open to negotiating with potential partners from the for-profit sector.

"We still experience what we consider some decades-old biases in some communities, sometimes perpetuated by other interests that aren't relevant in today's environment," he says.

"Our commitment to move forward with our quality agenda, with partnerships such as Duke LifePoint, the commitments that we make routinely as we've done in Providence, that we are going to maintain the existing charity care policy, and some of the accomplishments we've had with our healthcare engagement network and other quality accolades, the combination of those things has changed the conversation drastically."

"When we have the opportunity to talk about that with a potential partner, and they understand who we are and what we are trying to accomplish in our medical communities, we do not find it difficult to move past that conversation of 'do you pay taxes or not pay taxes?'"

South Carolina is one of 19 states that has refused to expand Medicaid under the Patient Protection and Affordable Care Act. Seraphine says that was not a dealbreaker.

"We still believe that in some form or fashion, expansion will come to most of these states. It comes in different ways and at different times," he says. "We don't know what the near-term projections are for expansion in South Carolina. We understand the state and local politics of that decision but we favor expanded coverage and hope it will come to that state also, but we also feel comfortable that in the meantime we can be successful operating these hospitals and doing them in the right way."

While LifePoint's expansion in South Carolina is likely, Seraphine says there is no timetable.

"One thing we've learned is that the decision to seek out a partner is part of the strategic planning process that always comes when it is the right time for that medical community," he says.

"What we do know is that market conditions and the headwinds that the industry and stand-alone smaller hospitals and systems are facing are not changing. In fact, it is going to become more difficult to be in a stand-alone environment over time. We don't know the timing," he says. "We do know that market forces suggest that there is window when we can expect to see that in the foreseeable future."

"We felt we'd go into Columbia, make a difference in that community, work with the physicians and help that organization grow again, [and we'll] show that we are a great partner in the state of South Carolina, so when that when the time comes we will be ready."

Prime Healthcare Acquires 4 Hospitals
The Ontario, CA-based for-profit hospital chain Prime Healthcare this month finalized its acquisition of four acute care hospitals in four states. The hospitals are:

• 88-bed Lehigh Regional Medical Center, in Lehigh Acres, FL, purchased from Franklin, TN-based Community Health Systems, Inc.
• The financially troubled independent, non-profit Southern Regional Medical Center, in Riverdale, GA
• Suburban Community Hospital, (formerly Mercy Suburban Hospital), in East Norrington, PA, purchased from Mercy Health System
• River Valley Health Partners, which includes the 152-bed East Liverpool (OH) City Hospital
• Southern Regional, Suburban Community, and River Valley will retain their not-for-profit status operating under the Prime Healthcare Foundation, a 501©3

With these four acquisitions, Prime Healthcare now operates 42 hospitals in 14 states, employing nearly 42,000 staff and physicians.

Prem Reddy, MD, chairman, president and CEO of Prime Healthcare, said in a media release announcing the acquisitions that Prime has committed more than $80 million to capital improvements at its four newest hospitals over the next five years.

With the divestiture of Lehigh Regional, CHS operates 25 hospitals in Florida

Brazosport (TX) Regional Joins CHI St. Luke's
Brazosport Regional Health System, an independent hospital in Lake Jackson, TX, has joined CHI St. Luke's, effective this month.

"With this new alignment, we will be able to better meet the needs and expectations of our community locally, and in addition, add an entirely new dimension of access to tertiary and quaternary services that this alignment will provide," Brazosport CEO/president Al Guevara, Jr., said in prepared remarks.

Brazosport's affiliation with CHI means that it can tap into the two-year-old academic affiliation agreement between CHI St. Luke's Health and Baylor College of Medicine, and a research relationship with the Texas Heart Institute. The collaborations include Baylor St. Luke's Medical Center's 27-acre McNair Campus, a new 650 bed, acute-care hospital; creating with the Texas Heart Institute; and BCM's cancer center.