Lexington Medical Center would move away from county ownership under new plan
Lexington Medical Center could see the biggest shakeup in its 50-year history, if the hospital gets the sign-off of Lexington County Council.
The West Columbia-based hospital would go from a county-owned hospital to an independent not-for-profit organization, something hospital officials hope would free them from government restrictions and pension liabilities.
But LMC board chairman Dr. Tripp Jones told Lexington County Council members the hospital, which opened in 1971 and employs 7,000 people, is not going anywhere.
“We won’t be sold. Your care won’t change. You can keep your doctor if you like him,” Jones said Tuesday.
Jones and Lexington Medical CEO Tod Augsburger said the move would help the local hospital remain competitive at a time when hospital systems are consolidating under larger, non-profit entities.
Augsburger said the increasing cost of paying into the state pension system is a growing burden to the hospital, which Lexington Medical is required to pay, as its employees are currently public employees. Pension payments make up 21.3% of LMC’s payroll, or $106 million annually, compared to 1 to 3% at other hospitals. The pension system eats up 9% of an employee’s paycheck, even though most newer employees are unlikely to work the 28 years necessary to qualify for a pension, Augsburger said.
As a not-for-profit, the medical center would no longer be a government hospital could move newer employees into a more affordable retirement plan, while also freeing up the hospital to earn a larger return on its own investments. As a government entity, LMC is currently limited to a 2% return, much less than other hospital systems can earn.
Augsburger noted that if a proposed sale of the Providence Health system to Greenville-based Prisma Health goes through, LMC will be the only independently-owned hospital out of eight in the Midlands. The only other large, government-owned health system in the state is that of the Medical University of South Carolina, he said.
If approved, the medical center would pay an annual $1.2 million lease on its 18-acre site off Sunset Boulevard, which would remain county-owned. The existing 21-member board could continue to oversee the new 501(c)3 organization, while the county council would also appoint a new, nine-member board to oversee its public health services district and “ensure Lexington Medical Center upholds all its assurances to the county and continues to meet the needs of the community,” according to a news release from the hospital.
This story was originally published August 12, 2020 at 8:58 AM.
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