MUSC Health leadership talks community hospital acquisition; new facilities will bring value to organization

December 13, 2018
Slide from a powerpoint presentation showing location of community hospitals that MUSC intends to purchase
One of the slides in the presentation leadership is making to employees. Image provided

Growth is an essential characteristic of life, both in biology and business. That was the message of Matt Severance, MUSC Health chief of affiliations and network development, during an employee Q&A concerning the recent announcement that MUSC Health intends to buy four community hospitals. 

MUSC announced Nov. 19 that the board of trustees voted to purchase  hospitals in Chester, Lancaster, Florence and Marion counties. For-profit Community Health Systems (CHS) currently owns the hospitals and affiliated outpatient facilities. The deal still must pass through several regulatory and financing mileposts, but leaders should finalize the deal  next year, sometime between March and June. 

Severance acknowledged the announcement caught many off guard and said the regulations around the publicly- traded CHS meant leadership couldn’t discuss the deal before the board voted. But, he said, the acquisition is perfectly in line with MUSC’s strategic plan.

“We’re the Medical University of South Carolina. We’re not the Medical University of the Lowcountry or the Medical University of Charleston. So our mission is to improve health across the state, and to do that, we need to be in areas across the state,” Severance said. 

Already, a slim majority of the contribution margin, or the revenues available to pay fixed costs, come from outside the Tri-county region, Severance said. But there’s no guarantee that will continue. Many people in the northern part of the state travel to North Carolina to either Duke Health or UNC Medical Center, he said. MUSC needs to plant its flag beyond the Lowcountry and take advantage of its good reputation in the area by extending its services.

Severance said the expansion would open up opportunities for additional academic rotations for all six colleges, and the larger footprint would enable the institution not only to provide subspecialties but also to subsidize some clinical offerings that can’t stand alone. The expansion, he said, would also provide new research and innovation opportunities in new geographic regions and in community hospitals rather than in an academic hospital setting. 

Severance stressed that the four hospitals are well-run institutions from both a quality and a financial perspective. Revenues from the community hospitals will cover the cost of financing the purchase as well as facilities updates, he said. 

“We want to welcome them, make them feel like they’re joining a family that respects their history, respects their culture, respects their contributions. I promise you, not all good things are invented at MUSC. There will be things at these hospitals that they do very well that we will learn from,” he said. 

There are still a lot of details that leaders need to iron out, from the new names for the facilities to whether their staffs will become state employees. Severance said an integration team is defining functional areas, and teams from each of these areas will work to ensure a smooth transition so that, for example, billing can happen on Day One and facilities can pay employees without interruption. 

The CEOs of each institution will report to Patrick Cawley, M.D., CEO of MUSC Health and vice president of Health Affairs, University. MUSC Health also recently hired Bob Harrington, M.D., to serve as chief medical officer of the affiliate network. In this role he’ll be the liaison between medical staff on the peninsula and the other sites. 

MUSC Health leaders will continue to conduct the  Q&A sessions through next week and will also offer a webinar for those who can’t attend in person. Staff can also submit questions online.