When a public medical school buys a private practice

Earlier this month, the Medical University of South Carolina’s hospital system finalized its $111 million acquisition of Palmetto Primary Care Physicians, South Carolina’s largest independent multispecialty group, with 31 physicians, 95 advanced practice providers, and 40 locations statewide.

Break the numbers down and the deal becomes even more striking: $3 million per physician.

For a private hospital system that might simply be a business decision.

But MUSC Health is not just another hospital system. It’s South Carolina’s publicly supported academic medical center, founded to educate physicians, conduct research, and advance health care for the people of this state.

Which raises a simple question South Carolinians might be asking: Why is a taxpayer-supported institution spending $111 million to buy private medical practices?

The timing of the acquisition offers part of the answer.

MUSC began construction last fall on a hospital in Nexton, a rapidly growing development in Berkeley County.

The new facility is expected to open in 2028.

Yet the Summerville-Goose Creek region is already served by multiple hospitals. In that environment, referrals matter.

Owning a large primary care network provides something valuable: a built-in pipeline of patients.

The acquisition therefore appears less about expanding access to care and more about securing referrals for a new hospital campus.

Again, this is a strategy that private hospital systems pursue all the time. But MUSC is a state institution with a different mission.

South Carolina faces one of the most severe physician shortages in the country.

Rural communities struggle to recruit doctors. Many counties lack sufficient primary care access. The state ranks poorly in chronic diseases such as diabetes, kidney disease, and obesity.

Against that backdrop, it is reasonable to ask whether $111 million could have been invested differently.

That same level of funding could expand residency programs, recruit faculty, build training infrastructure, and increase the pipeline of physicians entering practice across South Carolina.

Instead, those funds were used to ‘purchase’ physicians who already exist.

This raises a broader issue of governance. The same 16 trustees serve as the governing body for both MUSC — the state’s public medical university — and MUSC Health, officially titled the Medical University Hospital Authority, its hospital and physician system.

In effect, the same group of individuals convenes as two separate boards depending on which enterprise they are overseeing.

Those missions are not always aligned.

A medical school’s responsibility is to educate physicians, advance research, and elevate standards of care. A hospital system’s responsibility is to grow market share, build referral networks, and compete for patients.

Both roles can be legitimate. But when they’re governed by the same board, the incentives can blur.

Increasingly, the decisions coming from MUSC suggest that the hospital enterprise is driving strategy. If that’s the direction MUSC intends to pursue, then South Carolina should have an honest conversation about governance.

One solution would be to separate oversight of the two missions: Create one board responsible for the academic medical school and another responsible for the hospital system.

Such a structure would allow each outfit to pursue its mission transparently and with appropriate accountability. More importantly, it would allow the public to clearly see whether investments are being made to educate the next generation of physicians or to expand a hospital network’s market reach.

None of this requires medical training to understand. When a taxpayer-supported institution spends $111 million acquiring private practices, the public deserves to know why and what comes next.

Is South Carolina about to see a publicly supported hospital system buying up private practices to build referral networks across the state — and in the process driving remaining community
physicians and hospitals out of business?

Those are questions the MUSC Board of Trustees — and the state leaders who appoint it — should be prepared to answer.

MUSC’s own mission is to preserve and optimize human life in South Carolina and beyond through education, research, and patient care.

It was meant to be something distinctive: a medical school whose excellence naturally attracted complex cases from across the state.

If the strategy now is to purchase referral networks instead, the public deserves a clear explanation- particularly if that strategy comes at the expense of MUSC’s core mission of education, research, and excellence.