Boards of Oconee, GHS Approve Long-term Operating Lease
GREENVILLE, SC _ The boards of Greenville Health System and Oconee Medical Center have approved a binding agreement that makes Oconee Medical Center part of the GHS integrated health system via a long-term operating lease, effective October 1, 2014.
The Oconee Medical Center Board of Directors and the GHS Board of Trustees approved the lease in separate meetings on Wednesday.
The agreement approved Wednesday grants GHS an operating lease of 50 years, with the potential for two additional 25-year lease periods. The lease provides for full integration of Oconee Medical Center into the operations of GHS, as the eighth medical campus in the system. The lease becomes effective on October 1, giving the two organizations time to plan the transition.
“We’re delighted to welcome Oconee Medical Center as an integral part of Greenville Health System,” said Michael Riordan, president and CEO of GHS. “Together, we will make a positive impact on the health of the communities we serve by improving access, quality and value.”
“Like GHS, Oconee Medical Center has been hard at work developing innovative new ways to care for the people they serve, not just in the hospital but in the home, at work and in the community.” Riordan said. “We’re excited to be on the same team, with the same values and goals. We all recognize that we can’t simply treat illness anymore, we have to keep people healthier over their entire lives.”
The agreement caps a six-month process that started formally in January when the Boards of the two organizations signed a non-binding Memorandum of Understanding to explore a possible affiliation. After several months of discussions and preliminary analysis, the Boards approved a non-binding Letter of Intent that described in broad terms the features of a potential affiliation. Since the approval of the Letter of Intent in April, the two organizations have been engaged in legal due diligence and have been crafting the final lease agreement.
The operating lease will give GHS responsibility for all assets and liabilities of Oconee Medical Center. GHS will assume all of the debt of Oconee Medical Center, which includes approximately $80 million in long-term bond-related debt. The Board of Directors of Oconee Medical Center will continue to function, but its role will be to oversee the lease and to advise the GHS Board of Trustees. The GHS Board will have ultimate responsibility for strategy, policy and decision-making for the entire health system.
As part of the lease, GHS pledges to deliver quality healthcare services to the people of Oconee County; to keep facilities in good repair; to make facility improvements as needed; and to meet the healthcare needs of the communities served by Oconee Medical Center now and in the future.
“This agreement protects and enhances healthcare services for the people of Oconee County and surrounding communities,” said Rick Phillips, chairman of the Oconee Medical Center Board of Directors. “GHS is a high quality organization that is leading the transformation of healthcare in South Carolina from a sick-care system to one that helps people at all levels of health to feel better and live more fully. That’s always been our mission and we are proud to be part of Greenville Health System.”
Over the past five years or more, Oconee Medical Center officials had met with interested regional not-for-profit healthcare organizations and several for-profit companies to learn about potential opportunities to affiliate. The regional not-for-profit organizations are all based in other states, as are the for-profit organizations. Oconee Medical Center’s Board of Directors chose GHS based in part on a desire to affiliate with a South Carolina-based organization that shares similar values and a commitment to the health of the people of the Upstate region.
“We are so fortunate to have an organization of the caliber of Greenville Health System right here in the Upstate, and even more fortunate to be part of GHS,” said Jeanne Ward, Oconee Medical Center’s president and CEO. “I’ve worked at Oconee Medical Center for more than 40 years, many of those as a nurse. It was critical to me that we find an organization that shares our vision and values of clinical quality and has a deep connection to the communities it serves, just as we do. We have found that in Greenville Health System.”
Ward will continue to lead Oconee Medical Center. On October 1, Oconee Medical Center staff will become GHS employees. Employed physicians will be offered positions within University Medical Group, the physician network of GHS.
About Oconee Medical Center
With 169 licensed beds, Oconee Medical Center’s acute care hospital is the anchor of a not-for-profit organization that provides a full range of health services to the people of Oconee County, S.C. and surrounding communities. The medical staff includes more than 120 physicians who represent 25 specialties. For more information, visit www.oconeemed.org.
About Greenville Health System
Greenville Health System (GHS) — an academic health system that is the largest not-for-profit healthcare delivery system in South Carolina — is committed to medical excellence through research, patient care and education. GHS offers patients an innovative network of clinical integration, expertise and technologies through its eight medical campuses, tertiary medical center, research and education facilities, community hospitals, physician practices and numerous specialty services throughout the Upstate. The 1,358-bed system is home to 15 medical residency and fellowship programs and the state’s largest number of active clinical research trials. GHS is also home to the University of South Carolina School of Medicine Greenville, a joint effort of USC and GHS.