at least one grant from the monies generated from the sale. Cost. There is a community perception that costs at the hospital are higher than those at nearby facilities. Several persons interviewed for the case studies felt that prices at the hospital were higher than other facilities in Beaufort or Savannah, GA.

Quality. Quality at the hospital has improved following conversion, according to a January 1996 survey by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).

Public Health. The sale has produced no large changes in public health activities on the island. Since the conversion, the Beaufort County Department of Social Services has helped finance a Medicaid eligibility specialist to work in the hospital's emergency room.

Economic Impact

Use of Conversion Proceeds. The initial purchase and subsequent sale of hospital equity was placed into the Hilton Head Foundation, which has begun making grants in a wide range of areas. The Hilton Head Foundation was an existing foundation, not created expressly for the purpose of investing and disbursing the funds from the conversion. However, the proceeds from the sale of the hospital do represent the majority of the Foundation's funds. The proceeds from the sale have been used broadly to improve the health of the community (including, for example, financing the area's arts). Some we spoke with felt the monies should be used more directly for public health efforts. Staffing. Reorganization at the hospital has resulted in some job loss, which has negatively affected morale of some hospital staff. However, such problems appear to have subsided, as employees become more comfortable with the new organization.

Capital Investment. Nearly $7 Million has been invested in the physical plant and hospital programs since the conversion. These investments were not required by the sale agreement. Many of the individuals with whom we spoke viewed hospital physical plant refurbishment as very important.

Taxes. The hospital pays about $430,000 in annual taxes, of which $288,000 is for the city and county.

Net Assessment

This conversion appears to have been initiated by the belief that a stand alone not-for-profit could not survive long term in this health care market. An extensive process to solicit bids was undertaken, and it appears a fair price was obtained. The sale proceeds are being used to fund charity work in the community, although some persons feel that the money should be used more directly to finance health care-related activities.