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by WILL FOLKS
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Over the past decade-and-a-half, this media outlet has sounded the alarm about government entities competing in the private sector – or attempting to perform tasks best left to the private sector. Aside from the taxpayer waste, inefficiency and duplication such ventures inevitably entail, we’ve railed against their ongoing, costly distortions of the free market.
This is a battle we’ve been fighting on multiple fronts. First, we’ve challenged the ongoing subsidization of woke indoctrination and speculative “economic development” at the Palmetto State’s institutions of higher learning. FITSNews has also consistently called for enterprise agencies like power provider Santee Cooper and the S.C. Ports Authority (SCPA) – both of which are have been spectacularly mismanaged – to be privatized.
For years, I’ve laid out the benefits of such policy shifts… and the catastrophic costs associated with failing to do so.
Sadly, “Republican” lawmakers – who claim to be “conservatives” and purport to embrace limited government – have failed to heed our warnings and take corrective action.
Another entity FITSNews has consistently called out for its government-endorsed, taxpayer-funded intrusion into the free market is the Medical University of South Carolina (MUSC). Two years ago, I called out state leaders for their “ongoing taxpayer subsidization of this government-run hospital system – which continues to use our money to unfairly compete against private sector providers.”
Specifically, I noted how MUSC was using “huge budget appropriations” and “mountains of taxpayer guaranteed debt” to perpetrate an “unfair incursion into the free market.”
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MUSC’s core function is to train future doctors, nurses and other health care workers to improve the quality of health care for all South Carolinians – and to pursue federal grants for specific research purposes. MUSC was never intended to unfairly compete with private health care systems – whether that be government-subsidized expansions or the purchase of private sector hospitals or, more recently, the state’s largest private physician group.
We recently published a guest column by state representative Luke S. Rankin – one of the few lawmakers raising serious questions about MUSC’s latest moves.
“South Carolina’s legislature has a responsibility to taxpayers,” Rankin wrote. “(That) means asking whether MUSC should continue to receive hundreds of millions in state dollars while competing against private hospitals without that advantage.”
As Rankin raised questions about MUSC’s appropriations, physicians across the state are expressing concerns about the system’s bid to purchase Palmetto Primary Care – the largest independent physician network in the state. Purchases such as this are typically reserved for private equity funds – or existing physician networks looking to expand their reach.
Why would a state funded hospital system purchase a private physician’s group? Why are private physicians receiving a buyout ultimately funded with taxpayer dollars? Will these physicians wind up becoming part of the state’s already unwieldy taxpayer-funded retirement network?
These questions are being raised as MUSC announced its intention to purchase a majority stake in Tidelands Health, a $540 million organization based along the South Carolina coast that is currently struggling with a $50 million deficit.
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RELATED | RETHINK TAXPAYER FUNDING FOR MUSC
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Senator Stephen Goldfinch initially expressed concern over this deal – which would not only facilitate MUSC’s statewide expansion but obligate South Carolina taxpayers to assume this mountain of red ink.
“I have real concerns about MUSC’s continued expansion across the state and competing against private entities with state dollars,”Goldfinch said back in August.
Sadly, Goldfinch – who is currently running for attorney general of South Carolina – folded like the cheap suit he is.
“They convinced me that most people in the Tidelands system would keep their jobs,” he said. “I have high hopes for the MUSC merger.”
As far as we know, Tidelands Health never put out a request for proposals regarding its acquisition – which is often the case when a struggling organization is looking to be purchased. Also, MUSC already has a 30% stake in Tidelands – purchased five years ago – and controls six seats on its governing board, according to documents (.pdf) provided to the S.C. Joint Bond Review Committee (SCJBRC).
In other words, MUSC has been a part of the problem at Tidelands for half a decade… yet taxpayers are supposed to extend their full faith and credit in support of a complete government takeover of the system?
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Tidelands has an estimated two years of cash reserves, meaning MUSC – a $4.7 billion system – has roughly that long to make improvements leading to system profitability. If they fail to do so, MUSC – i.e. taxpayers – would be on the hook.
“That would be a liability of MUSC,” the hospital’s chief executive officer, Patrick Crawley, confirmed during recent testimony to the SCJBRC.
Worth nothing as Crawley makes his pitch? MUSC has majorly missed the mark in estimating the cost of previous private sector acquisitions – notably the accumulation of a $240 million deficit in the first three years following its recent Midlands acquisitions.
The hospital originally told lawmakers it would turn a $31.5 million profit during that three-year period – a miss of more than $270 million.
Over the past six years, MUSC has expanded in Chester, Florence, Lancaster, Marion, Orangeburg and Richland counties (among other locations) – with numerous additional expansions reportedly in the works. These incursions are not only backed by taxpayer funds and taxpayer-guaranteed debt, history has shown they are based on bad financial projections, as well.
Looming market pressures could make things even worse. According to reporter Jessica Holdman of The S.C. Daily Gazette, in less than three years “South Carolina will start losing its ability to pay hospitals for treating Medicaid patients at similar rates as private insurance,” a component of U.S. president Donald Trump‘s “One Big Beautiful Bill.”
During the 2024-2025 fiscal year, Tidelands received $40 million from these payment boosts, according to data from the S.C. Department of Health and Human Services (SCDHHS).
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Assessing the situation from a statewide perspective, the losses associated with this shift in federal policy are expected to be much more staggering.
“When the cuts are fully phased in, South Carolina hospitals will lose approximately $2.4 billion annually,” S.C. Hospital Association vice president Schipp Ames told The (Spartanburg, S.C.) Herald-Journal earlier this year.
That’s $2.4 billion… with a “b.”
For hospitals owned by MUSC, these billions of dollars in unexpected losses could ultimately become the responsibility of South Carolina taxpayers – yet another of the unintended consequences associated with government sticking its nose where it doesn’t belong.
“When government props up one competitor with public dollars, it distorts the market and weakens the private providers who must stand on their own two feet,” Rankin wrote in his recent guest column.
It also exposes taxpayers to significant risk… and potentially significant losses.
Once again, we are sounding the alarm on this latest government incursion into the free market in the hopes South Carolina’s leaders will stop giving MUSC a blank check – and start taking action to protect the taxpayers. That means not only rethinking MUSC’s current acquisition plans – but questioning whether the entity deserves to continue receiving hundreds of millions of dollars from the state to keep competing against private sector providers.
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ABOUT THE AUTHOR…
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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4 comments
Great article, Will. Thanks for bring this to our attention. Hopefully our lawmakers will reign in this path towards a de facto state-run socialized medical system in SC. I’d love for y’all to also bring in a healthcare industry market expert to talk about how the monopoly of the Blue Cross/Blue Shield network across the South has effectively all but eliminated free market competition (and thus, lower prices) in the health insurance market.
Wait until Will finds out about the Trump administration’s incursions into the free market, incursions that make this look like peanuts. He will plotz for sure, look for endless blahg posts about it!
Btw, shouldn’t this blahg post be tagged “paid for by LMC”, the only medical system that this outlet continously acts as a fluffer for ?
Lawyers for MUSC need to be locked up and the entire administrative staff fired and replaced.
Federal investigators from outside the corrupt state of SC need to be brought in.
End this crap!
Not really concerned about “tax payer money” Everybody gets tax payer money in one form or another. A deeper dive into major hospital institutions that claim non profit status yet give their employeees from doctors to staff bonuses based on how many orders they can get, i.e., a cat scan here, and kidney transplant there. Year end bonuses on how many medical procedures you can peddle sure doesn’t feel like serving the greater good or doing no harm. Or hospitals that claim not-for-profit status, yet serve their members not their patients. Peel back the layer of that onion and that would be impressive, and really start stinking up the joint.