GREENVILLE, S.C. (WSPA) – The largest health system in the state is running out of time to re-finance its debt.
Greenville County Council voted Tuesday to delay a vote on a resolution to approve the restructuring of $1.5 billion of debt for Greenville Health System.
Greenville Health System released a statement after the council meeting saying:
“We are disappointed that the Greenville County Council put politics ahead of advancing local healthcare. The council has approved numerous other bond requests in the last year and it’s unfortunate we were not granted the same support. Worst of all, it’s our patients who will be hurt most by the council’s decision. Because of their decision, we cannot refinance the Greenville County portion of these bonds. Instead, we will now be forced to spend additional dollars on interest costs.”
Over the summer, Greenville Health System announced it was forming a partnership with Palmetto Health to create the largest health system in the state. But part of that restructuring, includes refinancing for the combined $1.5 billion of debt the two systems have incurred.
“If the hospital is going to refinance, they have to refinance the bonds prior to the end of the year,” Councilman Ennis Fant said.
GHS is up against that deadline because the U.S. House of Representatives’ version of the tax reform bill has a provision that would eliminate 501C3 hospitals from being eligible for tax exempt bonds.
“The urgency is if the tax reform bill passes, they won’t have the option to re-finance it down the road at a lower interest rate,” Fant said.
Under the re-financing, the hospital says they could expect to save $80-100 million in interest payments. However, some councilmembers are still concerned.
“I don’t understand it as well as I need to understand it before I vote on it,” Councilman Joe Dill said.
Right now, Palmetto Health has around $860 million in debt while GHS has around $645 million in debt. On the GHS side, the debt is broken down as such:
Greenville Memorial -$429,800,000
Greer – $23,800,000
North Greenville – $3,400,000
Oconee – $75,200,000
Hospital leaders say that debt will not be passed on to county taxpayers, but they were unclear what that could mean for patients.
“That’s where there’s some ambiguity,” Fant said. “The taxpayers in Greenville County would not be on the hook one way or the other. This is totally the debt of the hospital system.”
However, Councilman Dill says he’s concerned about the patients and who would be liable if the hospital could not pay back the debt in the future.
“That will be spread among the people who do business with the system, the doctors, and the different facilities that are owned by the Greenville Hospital System,” Dill said.
Council can either pass the resolution, vote against it, or hold it for a later time. Tuesday’s meeting is the last council meeting of the year, so if Council does decide to hold the vote, and the House form of the tax bill passes, then Greenville Health System portion of the debt will be stuck with the old structure.