More than a year after their proposed marriage fell apart, three hospital systems in South Carolina are still single.
None of the systems, located in Anderson, Greenville and Spartanburg, are on the prowl for a merger partner, but all are looking at other means to quell financial pressures. They even have some joint ventures in place, the foundation of an empire that crumbled before it could really be built.
The systems are Anderson Area Medical Center, Greenville Hospital System and Spartanburg Regional Medical Center.
"We're still alive and well and progressing," said John Miller Jr., president and chief executive officer of 371-bed Anderson Area Medical Center. "And we're still working together."
The planned AGS System, which would have controlled 81% of the markets' inpatient beds, promised savings of $145 million over the first five years of its existence.
AGS began unraveling when the U.S. Justice Department launched an antitrust investigation in July 1996, before the systems could formally file for federal antitrust clearance.
The fatal blow, however, came four months later when Greenville residents voted 3-to-1 against the deal in a referendum. Two local hospitals, Mary Black Memorial Hospital in Spartanburg and St. Francis Health System of Greenville, successfully drummed up opposition to the deal through a community coalition.
Since then, the AGS hospitals have joined to seek out other money-saving measures:
A $6 million laundry facility built in Spartanburg for all three to use.
A joint disease management program for patients with congestive heart failure.
Teleservices, such as Ask-a-Nurse, that patients can use for information about their symptoms. The systems' telemarketing departments also have come together under one roof.
HealthFirst, a 2-year-old HMO owned by the systems with 30,000 covered lives.
"They are examples of some new services and cost reductions that we can bring to a merger," said Dean Kaster, senior vice president of strategic management and development services for Greenville Hospital System. "That's what AGS was all about."
Greenville Hospital System, with seven hospitals and 1,174 beds, has also focused inward, improving its services and facilities in the wake of the failed merger.
That meant adding physician offices in outlying areas, building a multilevel research facility with Clemson University and spending millions to expand a cancer treatment center.
Few management changes have occurred at Greenville, Kaster said.
"We've done some restructuring and realigning of the representative departments within the system," he said. "We placed information services under the chief financial officer, created a senior vice president position for medical staff services and expanded community relations and marketing."
Meanwhile, Miller has replaced industry icon D. Kirk Oglesby Jr., Anderson's former CEO who retired Jan. 1. Miller has served the hospital in various roles for 25 years.
Since the systems sit on the growth corridor between Charlotte, N.C., and Atlanta, the rising demand for services should keep them financially strong, Miller said.
But Greenville has seen charity-care costs skyrocket in recent years, rising to $26 million in 1997 from $5 million in 1987. Kaster estimates a $2 million increase in charity-care expenditures next year.
"(The increase) is further creating tension between needing and wanting to serve the community and making our financial targets," Kaster said. "And the drop in Medicare payments will also affect the hospital by about $8 million this year."
For those reasons, it's vital that the three systems keep their joint ventures going strong.
"They're very promising, but they're still in their start-up phases," Kaster said. "There will probably be some other joint ventures we can do with Anderson and Spartanburg. We also have relationships across the region and state. We know we can't be an island unto ourselves."
Anderson, for its part, will consider joint ventures with other hospitals to ensure a black bottom line in the future.
"The hospitals in this area have good, strong relationships," Miller said. "We're not fierce competitors, because we're geographically spread out. But that doesn't mean there aren't some competitive tensions."
Neither Greenville nor Anderson is planning to merge with another system or hospital, officials said.
The 471-bed Spartanburg Regional, according to local media reports, had been courted by hospitals in neighboring North Carolina for possible partnerships. Carolinas HealthCare System, Charlotte, and eight-hospital Novant Health System, based in Charlotte and Winston-Salem, also have expressed interest in Spartanburg Regional in recent months.
Repeated requests for an interview with Spartanburg Regional CEO Joseph Oddis were not met by press time.