An angry group of South Carolina physicians has turned over the management of its healthcare system to a larger out-of-state corporation while trying to stop a competing system from doing the same thing.
The 300 physicians constitute the Medical Society of South Carolina, which owns not-for-profit Roper CareAlliance in Charleston. The system includes 400-bed Roper Hospital and 104-bed Roper Hospital North in Charleston.
On March 13, the Roper system signed a one-year management contract with Charlotte, N.C.-based Carolinas HealthCare System, a burgeoning publicly owned network. Carolinas operates 18 acute-care, rehabilitation and psychiatric hospitals in North Carolina and South Carolina.
On the same day, the physicians' attorneys were in a South Carolina circuit court asking a state judge to stop the proposed lease of the university hospital owned by the Medical University of South Carolina in Charleston to Columbia/HCA Healthcare Corp.
In February 1996, MUSC agreed to lease its three hospitals to Columbia for 30 years in a deal valued at more than $1 billion over the life of the lease (Feb. 19, 1996,
p. 18). The Roper system had a competing bid to take over the university system, which includes the university's 582-bed medical center, its 82-bed psychiatric institute and its 90-bed children's hospital.
Various state agencies subsequently approved the lease, but it has yet to be submitted to the Federal Trade Commission for antitrust approval.
After failing to derail the lease deal through lobbying various state agencies, the Medical Society of South Carolina filed suit against Columbia and MUSC last August, charging that the lease agreement is barred by South Carolina laws that prohibit a joint venture between a state agency and a private corporation.
At the hearing in the case on March 13 before the state trial court, lawyers for both sides faced off.
William Crymes, M.D., the president of the medical society, said the society wants the court to order a jury trial in the case to establish the facts behind the lease deal. The physicians would then like the state Supreme Court to decide whether state law was violated.
"We find it unconstitutional what the medical university is doing," said Crymes. "We intend to pursue this to the legal limit."
MUSC and Columbia, though, want the court to grant their motion for summary judgment and dismiss the case without a trial. They say their agreement isn't a joint venture but rather a legal affiliation in the form of a lease.
Ellen Bank, a spokeswoman for MUSC, said the deal likely would have been completed in January had the medical society not filed suit.
Bank said the issues raised in the medical society's suit were addressed during the course of the two-year negotiations between Columbia and the medical university and during the state's review. She boiled the suit down to competition.
The judge's ruling is expected soon.