services. Quorum has recruited at least 18 new physicians, only some of which would have come to Spartanburg without conversion. Cost. Prices have risen somewhat, but MBMH continues to offer prices below those of area competitors. Relatively modest price increases have not caused great concern.

Quality. Quality appears to be the same as before conversion. MBMH has lost patients due to the very negative publicity surrounding the conversion. However, for those who continued to use the hospital, satisfaction levels remain high. Though some worry that staff cutbacks reduced quality, the hospital's performance--as measured by JCAHO--did not change appreciably between 1994 and 1997.

Public Health. The sale should result in improvements in city public health. The Foundation will focus on health promotion and disease prevention, resulting in new annual spending of $3 million for this purpose.

Economic Impact

Use of Conversion Proceeds. The Foundation is using its funds for health promotion and disease prevention, not just medical care. The Mary Black Foundation originally was established in 1986 and conveyed periodically to MBMH, leaving a modest $1 million endowment in the foundation at the time of the sale. The Foundation was reconfigured following conversion and joint ventured with 6 local groups to fund a comprehensive health assessment for Spartanburg. The Foundation's purpose now is to enhance the health status and wellness of citizens of Spartanburg County through both wellness and prevention efforts.

Staffing. There was a large initial reduction in staff following conversion. Immediately following the sale, 138 staff (93 full-time) lost their jobs. Though handled professionally, this adversely affected morale. The staff now works smarter and harder, but they appear not to resent this. Most of these cuts may have happened anyway as the hospital was 25% overstaffed compared to peers.

Capital Investment. Capital investment increased following conversion. Quorum has invested in new/expanded services above and beyond the roughly $3 million annually it was contractually obligated to provide.

Taxes. The hospital annually pays $1.7 million in taxes, of which $1 million is for city and county property taxes.

Net Assessment

This conversion bitterly split citizens and physicians in the community. However, it has resulted in a positive impact on community health due to expanded services, new physicians and the Foundation focus on health promotion, without a decline in access to care for the indigent. The conversion has had a positive economic impact on the community due to new capital investments, taxes and the Foundation. Such economic benefits were offset partially by staff cuts and somewhat higher prices.