Palmetto Health will ‘look at all options’ if CON barrier falls

By WARREN BOLTON

Associate editor

IF LAWMAKERS grant Lexington Medical Center a special exception to establish an open-heart surgery center, don’t be surprised if Palmetto Health asks for a free pass as well.

Palmetto Health wants to open a full-service hospital in northwest Richland County, but state regulators have said “no” — just as they have to Lexington’s request for a heart center.

Palmetto Health CEO Kester Freeman said the new hospital is needed to provide medical care in a fast-growing areas. “We believe it’s the right thing to do for that part of the city,” he said.

Mr. Freeman said if Lexington Medical is successful in bypassing the Certificate of Need system, which helps prevent duplication and control health care costs, Palmetto Health would have to at least consider that route.

“We have never done that in our history, either hospital, but we’ve got to look at all the options,” he said. “And we will.”

“And I think every health system in South Carolina is going to think like that,” he said.

Mr. Freeman made the comments during a recent interview about Palmetto Health’s progress since its inception in 1998. Palmetto Health was formed through the merger of the public Richland Memorial Hospital and the private Baptist Healthcare System.

Palmetto Health’s chief executive officer, who will retire in January, said he’s proud of the way the system has performed.

Here is a recap of some of his comments.

On merging two cultures:

He said the difficult task of merging two different cultures and hospitals is complete. “It’s working better now than it’s ever worked,” he said.

“It’s taken longer than I might have thought it would,” he said. “It wasn’t easy. It’s like any marriage of different people and organizations. What we never differed on was our basic values of local ownership, local control and commitment to patients.”

On the governing structure:

The hospital system’s bulky governing structure hampered its progress from the beginning. It’s still confusing. The system has three boards and essentially two CEOs, Mr. Freeman and president Chuck Beaman. Mr. Beaman will run the operation alone once Mr. Freeman retires, which is the way it should be.

“I’ll grant you the structure is complicated,” Mr. Freeman said. But, he said, talented people with the same vision and values learn to deal with a complex system.

He also said the multiple board system has a purpose. The Richland and Baptist boards have influence and input, but do not govern. He said those boards help keep Palmetto Health committed to its established mission and values.

“There’s really only one governing board,” he said. The Palmetto Health board allocates resources, sets the operating budget and makes capital allocations, among other things. It also hires and fires the CEO.

“I don’t see that basic structure changing over time,” he said.

On “nonduplicated services”:

While hospitals are pressing to get into the heart business as well as neurosurgery and orthopedics — big money-makers — no one’s clamoring to provide “nonduplicated services” such as Level I trauma centers, Mr. Freeman said. While nonduplicated services are much-needed in the community, they’re often very costly.

In addition to operating a Level I trauma center, Palmetto Health also offers a wide range of care in the areas of pediatrics, psychiatry and sickle cell anemia. In addition, it does extensive research and specializes in education, which includes supporting clinics that serve the indigent.

He said he’s glad Palmetto Health has been able to advance in a competitive market. That enables it to offer those services. “That’s what I call social mission. That’s what I’ve done my whole career,” he said.

In addition to the struggle to merge a public and a private hospital and the fight to grow Palmetto Health’s heart program (an expansion that this editorial board opposed, just as we oppose Lexington’s), Mr. Freeman will be remembered for helping keep Palmetto Health focused on what he once called the “soft stuff.”

Even back in 2000, in the midst of the hospital system’s toughest financial times, he spoke strongly about its commitment to service and not just the bottom line: He declared that Palmetto Health’s purpose is to touch and care about patients, train physicians and serve the indigent, among other things. “It’s the soft stuff that matters anyway,” he said at the time. “All that stuff, which nobody else does in this community, for whatever reason, because they can’t or won’t.

Palmetto Health officials feel they haven’t gotten credit for doing the “soft stuff” or some of the promises they made and kept, such as not raising prices over a period of years and spending $17 million over seven years to help improve the health of the uninsured and underserved.

Of course, the hospital system should do those things. After all, it did gobble up the community’s strong public hospital.

That said, Palmetto Health is making much-needed contributions in this community. So are its competitors, Lexington Medical and Providence Hospital.

That’s why it’s important they all resist the temptation to create an atmosphere in which they’re willing to consider “all options” in an effort to destroy one another.

Reach Mr. Bolton at (803) 771-8631 or wbolton@thestate.com.