The Sisters of Charity seek $50M from Palmetto Health hospital system over "stolen" orthopedic practice: 7 takeaways

Written by Eric Oliver | August 19, 2016 | Print  |

Two health systems in South Carolina are clashing after Sisters of Charity, the former owners of Providence Hospital, are seeking $50 million in damages from the Palmetto Health hospital system for allegedly illegally "stealing" the Moore Orthopedic Clinic, The State reports. Here's what you need to know.

1. The lawsuit alleges that Palmetto Health has "monopoly power," in the Columbia area, and that conspiring to take the orthopedic surgery business from Providence would effectively "weaken" Providence's ability to compete with Palmetto.


2. In addition to the $50 million Sisters of Charity is seeking, it would also like reimbursement for punitive and other damages that could be in the hundreds of millions if Palmetto loses the suit. Additionally, the two hospital giants have money, prestige and reputation on the line.


3. Evidence in the case includes previously secret emails and text messages from former Providence doctors and top officials who allegedly conspired with Palmetto Health "to wrest" the Moore Clinic doctors away as Providence Hospital was sold.


4. Providence Hospital was able to compete with Palmetto through its Moore Clinic, which it had invested $30 million into in 2010. In 2011, Moore Clinic surgeons convinced Providence to abandon obstetrics and convert the wing into an orthopedic surgery wing. By 2014, orthopedics was Providence Hospitals' most profitable line of business, and was critical to Providence's long term sustainability.


5. Providence was discussing entering into a partnership with several hospitals in 2013, Palmetto was included. The suit alleges with the insider information about how profitable the orthopedics division was, Palmetto "decided to attempt secretly to acquire Providence's orthopedic surgery business."


6. In April 2013, Moore Clinic physicians and staff notified Providence that they were quitting to join Palmetto Health. That decision damaged the value of Providence Hospital through a last minute negotiation with LifePoint, whom it sold to.


7. Michael Kapp, chairman of the board of the Sisters of Charity Providence Hospital Legacy Group said any money recovered will go to the Sisters of Charity Foundation. The Palmetto Group was not reached for comment before publication.


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