Greenville Health System and Palmetto Health’s plan to consolidate $1.5 billion in debt was derailed by the Greenville County Council Tuesday night.
Council tabled a resolution that would have supported the issuance of new hospital revenue bonds by the South Carolina Jobs Economic Development Authority to refinance approximately $600 million in existing debt owed by the Greenville Health System and $863.5 million in existing debt owed by Palmetto Health.
A partnership between the two hospital systems was finalized last month. The new company under which the Greenville Health System and Palmetto Health will operate will be one of the 50th largest hospital systems in the nation, and the largest in South Carolina, serving 1.2 million patients a year, earning a projected $3.9 million in annual net revenue, and covering half the state.
GHS officials said the refinancing would have saved between $80 and $100 million. Critics, however, expressed concern that most of the debt the new company was refinancing came from outside of Greenville County and feared Greenville County residents could be stuck with higher bills to pay for it.
The hospital systems said they were trying to refinance existing bonds before Dec. 31 because the proposed House tax bill eliminates tax-exempt bonds for 501(C)(3) hospitals after that date.
“We will be meeting with the new South Carolina health company board to discuss our options,” said Sandy Dees, GHS spokeswoman.
The GHS-Palmetto Health partnership has generated controversy since it was proposed in June, with some elected officials saying they feared it would reduce competition and increase costs. GHS officials have said the partnership would allow the hospitals to offer services that they would not be able to offer singularly. In addition, hospital officials have said combining the hospital systems could expand medical school training and clinical research.