Two South Carolina hospitals are celebrating a state Supreme Court ruling that provides a happy ending to their two-year struggle to merge.
The court's Jan. 12 decision was the last legal hurdle for the union of Baptist Healthcare System and 583-bed Richland Memorial Hospital, the two largest hospital systems in Columbia, S.C.
"It's been long and arduous and well worth the efforts," said Baptist Chief Executive Officer Chuck Beaman. His system includes 375-bed Baptist Medical Center in Columbia and 90-bed Baptist Medical Center in nearby Easley.
The systems announced their merger plans with a third partner, 292-bed Lexington Medical Center, in December 1995. Lexington dropped out of the deal three months later.
The deal still prompted antitrust scrutiny because Baptist and Richland together would control 67% of the market's staffed acute-care beds.
After the deal closes, Richland Memorial will lease its property and buildings to the new company, Baptist Richland Alliance, for 35 years. All of the hospital's liquid assets will be transferred to the alliance, which a board of directors will oversee.
To win state regulatory approval, the systems agreed to:
Not lay off employees as a result.
Not raise prices for five years.
Commit 10% of the merged organization's bottom line to fund three community health initiatives.
Last May, the state Department of Health and Environmental Control gave the hospitals a certificate of public advantage to shield them from federal antitrust law.
Two months later, three Richland County residents petitioned the state Supreme Court for a review of the COPA. In its Jan. 12 decision, the court upheld the certificate in what was the first judicial test of the state's antitrust exemption law.
Beaman and Kester Freeman Jr., CEO of Richland Memorial, said rate increases could be avoided thanks to the merged alliance's estimated $71 million in savings over its first five years.
The new system, which will own and operate three hospitals, is not considering merging with any other hospitals or systems, Freeman said.
The hospitals could close their deal within three weeks, officials said.