iedmont Medical Center (PMC) is a 268-bed hospital located in Rock Hill, South Carolina, and is the centerpiece of Piedmont Health Care System (PHS). The hospital originally converted from county to for-profit status in 1981 through an agreement to partner with Tenet Healthcare. The $10 million purchase price included fees for equipment and payments for the lease of the old facility during construction of the new hospital. In 1995 Tenet and the York County Councilors entered into a detailed agreement regarding future investments and guarantees.

Conversion Process

Motivation. Rejection of a 1979 local bond referendum to refurbish York General Hospital was the primary motivation for the original sale of the facility in 1981. This, in combination with the hospital's need of major renovations, appears to have limited the York County Councilors' options at the time they chose to sell the facility. The primary motivation of the County in choosing not to exercise a buyback option during the original sale, as well as 15 years later, was to maximize the chances that a full service hospital was vibrant and operating in the Rock Hill, SC community.

Public Oversight. The original conversion was 17 years ago, and it is unclear how widely discussed the sale was prior to consummation of the arrangement.

The Attorney General was not involved in the original conversion arrangement, nor did the Attorney General become involved in negotiations between Tenet and York County in 1995.

Fair Value. Assets of the hospital appear to have been sold at a reasonable price. The existing York General Hospital was in poor shape in 1981. Tenet purchased the right to run the hospital and leased the existing facility while they built a new hospital that opened in 1984.

Community Control

The community has permanently lost ownership and control of the hospital. A local advisory board remains intact but does not have ultimate control of the hospital. Buyback window arrangements enabled the community to get increased leverage in negotiating with the purchaser, even after the original sale of the hospital. Buyback windows appear to have been crucial in increasing investment in the hospital, as they increased the negotiating position of the County Councilors, even after its sale. A 1995 agreement between Tenet and the County outlines the responsibilities of Tenet in running the hospital, as well as expansion plans for both hospital services and facilities over the next decade. There has been a large expansion of hospital infrastructure since this county hospital converted to for-profit status. The new arrangement runs for 50 years (until year 2046), at which point the contract between Tenet and York County will have to be renegotiated.

Community Health Impact

Hospital Survival. The original conversion was key in allowing a full service hospital to remain open in this community after a bond referendum for the hospital was rejected in 1979. After rejection of the referendum, the County Councilors appear to have had few options other than selling the hospital. Their primary goal was to keep a functioning hospital open in the community.

Access. The sale has not resulted in barriers to access for uninsured or Medicaid patients. The agreement between York County and Tenet stipulates that up to $475,000 (in 1995 dollars) per year is to be provided to residents of York County. Tenet also pays York County's "Medicaid Tax" that each county contributes to this program in addition to providing services to inmates in York County jails. Services at the hospital have increased. From the building of a new hospital to recent and planned capital expansions, there has been a major increase in health care services available at the hospital.

Cost. Costs at Piedmont Medical Center are comparable to other hospitals in the upstate region of South Carolina. The agreement between York