American Medical International last week won the bidding war for Hilton Head (S.C.) Hospital with a unique five-way partnership that includes a nearby medical school and a Roman Catholic system.
The 36-hospital chain will own 20% of the 68-bed resort-island hospital. In addition, AMI will be the general partner and manage the hospital. Four other partners each will own 20%. They are the Medical University of South Carolina, Charleston; the physicians; the hospital foundation; and Bon Secours, a 17-hospital system that owns 243-bed St. Francis Xavier Hospital in nearby Charleston.
Under the AMI partnership, the tax-exempt hospital will convert to for-profit status.
AMI also was expected to complete its purchase of 587-bed St. Francis Hospital in Memphis, Tenn., another not-for-profit hospital, this week.
The Hilton Head deal was the brainchild of Dallas-based AMI, Bon Secours and the medical school, said Curtis Clayton, Hilton Head's president and chief executive officer. Mr. Clayton was hired as an interim CEO after the hospital's administrator, Steven Caywood, resigned last month (March 7, p. 8).
Hilton Head had received 11 proposals to buy the hospital, which is managed by Quorum Health Group, Nashville, Tenn. Those proposals were narrowed this month to AMI's partnership and a bid by Columbia/HCA Healthcare Corp., Louisville, Ky. Columbia/HCA, a 196-hospital chain, had proposed buying the hospital and offering an equity stake to physicians, Mr. Clayton said.
Hilton Head reported net income of $1.1 million on total revenue of $27.9 million in 1993, according to HCIA, a Baltimore-based healthcare research company.
Mr. Clayton said Hilton Head liked the partnership approach better. AMI, Bon Secours and MUSC "have each demonstrated a commitment to the nonprofit tradition upon which Hilton Head Hospital was founded and built," said Sheila Ogletree, board member and chairman of the negotiating committee. The approach also was preferred by an "overwhelming majority" of the medical staff, officials said.
Other terms, such as the purchase price and the length of the AMI management contract, are being negotiated, Mr. Clayton said.
The deal, which is expected to be completed by Sept. 1, requires certificate-of-need approval from the state.