The Medical University of South Carolina (MUSC) has finalized the acquisition of three South Carolina community hospitals, a free-standing emergency department and other affiliated physician practices from LifePoint Health.
The purchase was announced by MUSC in late June and was completed on Aug. 1, according to a representative of the academic health system.
A report from The Post and Courier Columbia pegs the deal at $75 million. Representatives of MUSC have not yet responded to Fierce Healthcare’s request to confirm this valuation.
“As the state’s only comprehensive academic health system, we understand that we have a responsibility to enable better access to complex, high-end care while working to facilitate the best-quality local care possible,” David J. Cole, M.D., president of MUSC, said in the initial announcement of the deal. “This acquisition will broaden our ability to serve greater numbers of patients, families and communities and that is a reason to celebrate.”
The deal sees MUSC Health, MUSC’s clinical health system, take control of KershawHealth in Camden, South Carolina; Providence Health and Providence Health Northeast in Columbia, South Carolina; and the ER located in South Carolina’s Fairfield County. Of note, KershawHealth has also been an affiliate of MUSC Health since 2015, according to the system.
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Together, the facilities employ more than 2,500 dedicated staff. In the June announcement, MUSC said that it was planning to hire all active staff “at compensation levels generally consistent with current rates and fair market value.”
“Our objective is and has always been positioning our facilities for success so that we can fulfill our purpose of delivering high-quality care close to home,” said Terry Gunn, market CEO of Providence Health and KershawHealth, in the June announcement. “Aligning Providence and Kershaw with a preeminent regional academic health system will benefit our employees, providers and community, giving us new opportunities to change what’s possible in health care for our region.”
Prior to the deal’s close, MUSC Health comprised roughly 1,600 beds across eight hospitals alongside its physicians’ practice plan, more than 100 outreach sites and MUSC College of Medicine.
MUSC is the state’s second largest healthcare provider behind Prisma Health, which also had an interest in purchasing Providence Health and KershawHealth.
The 18-hospital nonprofit system had announced its own acquisition plans back in March 2020 but shortly after faced court challenges from regulators and a competing local provider. A judge ruled against the deal in late 2020 with Prisma Health filing unsuccessful appeals through the months to follow, eventually leading the parties to call off the purchase in early April 2021.
Prisma Health’s scuffed deal and MUSC’s resulting pickup come at a time of increasing consolidation and regulatory scrutiny.
On the one hand, reports from Moody’s Investors Services and Kaufman Hall anticipated a healthy number of mergers and regional partnerships due to a build-up of dry powder among larger players, limited liquidity among smaller systems and an overall interest in geographic expansion.
On the other, President Joe Biden recently issued a sweeping executive order calling on the Justice Department and Federal Trade Commission to take a closer look at healthcare mergers “to ensure patients are not harmed” by increased consolidation across the provider landscape.