Orangeburg's Regional Medical Center says the construction of a $325 million hospital in Berkeley County will threaten its viability as a rural health care provider in the region.
RMC says it stands to potentially lose about 17,250 patients from its primary and secondary service areas as a result of the 311,221-square-foot, 128-bed facility scheduled in the neighboring county.
The resulting loss of inpatient and outpatient market volumes would result in an $8.6 million annual loss to the hospital.
The scenario was laid out in a July 13 letter sent to the South Carolina Department of Health and Environmental Control's Bureau of Healthcare Planning and Construction in opposition to the approval for the new hospital being built.
Columbia attorney William Thomas wrote the letter on behalf of the hospital opposing the Medical University Hospital Authority's Certificate of Need to build the new hospital.
DHEC is the state body that must issue a CON before certain types of health care acquisitions, expansions and new facilities are allowed. The CON is intended to reduce duplication in services.
"RMC cannot absorb a loss of that magnitude and be expected to survive," the letter states. "RMC is already operating at a fiscal year-to-date loss of more than $1.5 million, and it suffered a $7.1 million loss in fiscal year 2017."
"Rural hospitals like the RMC have very slim operating margins, and the loss of market share to encroaching competitors can easily have devastating effects on the hospital's operation," the letter continues. "Even if RMC could survive the erosion of its market share to MUHA, it may need to cut services to absorb such losses."
Attempts to reach RMC CEO Charles Williams and RMC Board Chairman Dr. Rev. Dr. Caesar Richburg about the matter were not successful.
Despite RMC's concerns, DHEC gave MUHA, which owns and operates the Medical University of South Carolina, the green light to build the hospital.
The RMC was among four hospitals to oppose the construction of the Berkeley County facility.
Charleston’s two other major hospital systems, Trident Health and Roper St. Francis, as well as Colleton Medical Center, which is owned by the same parent company as Trident Health, also opposed the CON.
RMC had until Aug. 8 to challenge the CON's approval but did not do so, according to DHEC.
RMC's opposition letter notes the hospital currently experiences more than 42 percent inpatient outmigration and almost 30 percent outpatient outmigration from its primary service area.
"More of those outmigrating patients seek care at MUHA than any other hospital, and the number of patients originating from RMC's primary service area who seek services at MUHA has increased steadily between 2014 and 2016," the letter states.
The opposition letter adds that with outmigration expected to increase to the new Berkeley County hospital, RMC could be in danger of closing and that it would not enhance accessibility to health care.
The letter notes the new hospital would in fact "decrease accessibilty to services in rural South Carolina as it represents an existential threat to RMC."
RMC notes it has been "the sole provider of acute care services for some of the most rural and poorest areas of the state.
"If RMC were to close, all access to acute care services would be concentrated in one populous area, significantly impairing access to care for some of South Carolina's neediest citizens," the letter states.
The letter notes the importance of RMC in light of the recent closures of hospitals in Bamberg and Barnwell counties.
"Bamberg and Barnwell are the harbingers of the damage that would likely befall Orangeburg if MUHA's project is approved," the letter states, also citing the fact that RMC employs 1,250 employees. "Closing the hospital would have a devastating effect on the community."
The opposition letter also states that the new Berkeley County hospital and its impact on the RMC would place the new Bamberg County emergency department facility in jeopardy.
The letter contends that that MUHA's assumption that patients seeking care at its downtown facility will seek care at the new facility is "unreasonable, especially for the size of the hospital being built."
"The only way in which MUHA's proposed 128-bed hospital can be viable is if MUHA redirects market share from current providers, including RMC," the letter states. "To believe that MUHA will only serve patients who have otherwise used MUHA's hospital downtown is not only illogical, it is patently naive."
The letter also states that in light of a new hospital already to be built in Berkeley County by 2019, the MUSC facility does not provide "increased accessibility" to health care.
"There is no need for an additional hospital in the service area, especially one that costs a staggering $325 million, and MUHA's proposed hospital does nothing to increase accessibility to acute care services."
RMC said it is also opposed to the MUHA's hospital CON application because it is not in "compliance with the CON Act, its regulations and applicable project review criteria."
The letter points to the $325 million price tag describing it as "confounding" and defying the "concepts of cost containment which is a project review criteria and a primary purpose of the CON Act."
"MUHA already has more than $800 million in health care projects in progress or in development; yet its net income is $28.6 million below budget for eight months ending Feb. 28, 2018. Should MUHA actually be undertaking this project given its financial position? MUHA's financial projections do not appear reasonable , and the financial feasibility of this project is, at best, uncertain.
"MUHA is essentially gambling with taxpayer funds on a project that may fail or that can survive only at the expense of other area providers, including RMC," the letter states.
Following the July 13 letter, a letter was also sent from RMC Trustee William Wilson to Murdock on July 23 reiterating the concerns that approval of the CON "will certainly threaten healthcare to the counties that the Regional Medical Center of Orangeburg and Calhoun Counties serves."
Prior to DHEC's final approval, RMC requested both Orangeburg and Calhoun county councils, which own the RMC, to go on record expressing its opposition to the department's issuance of a Certificate of Need to MUSC to build the new hospital.
Last year, RMC officials expressed a desire to add services on the eastern end of the county in anticipation of the Volvo manufacturing plant in Berkeley County.
Orangeburg County Council Chairman Johnnie Wright said council was informed about the matter and the hospital's concerns rather late in the process.
"By the time we got anything about the concern, I didn't know the train was so fast on the track that they (MUSC) already got it (CON)," Wright said.
Wright said RMC's concern as he understands it is that the new hospital would negatively impact the Orangeburg hospital.
"We feel like another one that close to us would make a difference -- there being too much of one thing in an area," Wright said. "People on this end of the county (eastern end) already go to Trident. Eutawville is as close to Trident as they are to RMC."
Calhoun County Council Chairman David Summers said council did support the RMC and its stance against the CON.
"They have so many hospitals in that area, I don't think they need to build another one," Summers said, though he acknowledged that upon approval of DHEC, there is not much more that can be done. "They (DHEC) kind of walk the dog on that one."
Summers said while most Calhoun County residents tend to choose Columbia hospitals, those in the far eastern end of Orangeburg County are the most likely individuals to receive health care in Berkeley County.
"We were going along with Orangeburg to help them," Summers said.
The new Berkeley County hospital will aim to provide a range of specialized inpatient and outpatient services. The exact location of the hospital has not been revealed. The hospital is expected to open in 2022.
MUSC officials declined comment on RMC's concerns, referring to its official press release as its statement on the matter.
Previously, the state health plan identified the need for 147 additional MUSC beds to serve the tri-county area (Berkeley, Charleston and Dorchester counties), based on MUSC’s existing hospital occupancy and fill rates.
Two other hospital systems in the Lowcountry already have the green light to build hospitals in Berkeley County. One of those projects is under construction now.
The hospitals have cited the area's growth as the reason for the additional hospitals.