Market Developments Signal Cost Hikes in Greenville

Originally published as Community Report No. 6 by the Center for Studying Health System Change (HSC), 2003. Authors: Suzanne Felt-Lisk, Jon B. Christianson, Linda R. Brewster, Ashley C. Short, Richard Sorian, Robert E. Hurley, Lawrence D. Brown, Jessica H. May. HSC was a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

Community Report: Greenville, South Carolina -- Market Developments Signal Cost Pressures

In January 2003, HSC researchers visited Greenville, South Carolina, for the fourth round of the Community Tracking Study, interviewing more than 65 health care market leaders. Greenville was one of 12 communities HSC tracked every two years through site visits and every three years through surveys. Earlier visits in 1996, 1998, and 2000 provided the context for assessing how the market was evolving. Despite the outward appearance of a relatively settled health care market, significant developments beneath the surface pointed toward rising costs for employers and consumers.

Hospital Market Dynamics

Greenville Hospital System (GHS) continued to dominate the local hospital market, operating the region's only Level I trauma center and its primary teaching hospital. GHS had expanded its footprint through the acquisition of physician practices and the development of outpatient facilities across the market area. Bon Secours St. Francis Health System served as the primary competitor, though its market share was considerably smaller. The competitive dynamic between GHS and St. Francis drove investment in new facilities and specialty services, but also raised concerns about whether a market this size could sustain the level of capital spending both systems were pursuing. Hospital pricing was increasing, and employers were beginning to feel the effects through higher insurance premiums.

Insurance Market and Employer Pressures

Blue Cross Blue Shield of South Carolina maintained a dominant position in the Greenville insurance market, as it did across much of the state. Several national managed care plans had entered and then partially withdrawn from the market during the managed care expansion and contraction cycle of the late 1990s. Employers, particularly the large manufacturing firms that anchored Greenville's economy, were grappling with premium increases that exceeded the general rate of inflation. Some were responding by shifting more costs to employees through higher deductibles and copayments, while others explored consumer-directed health plan designs. Small employers faced even steeper challenges, with some reducing benefits or dropping coverage for dependents.

Safety Net and Uninsured Population

Greenville's safety net for uninsured and low-income residents faced growing strain. South Carolina had not expanded Medicaid eligibility to the extent some other states had, leaving a substantial gap between those who qualified for public coverage and those who could afford private insurance. GHS provided a significant share of uncompensated care in the community, supported partly by county funding, but the growth in demand outpaced the available resources. Community health centers served as an additional access point, but capacity constraints and funding limitations restricted their ability to absorb the uninsured population.

Sources and Further Reading

This Community Report was based on site visits to Greenville, South Carolina, conducted in January 2003 as part of HSC's Community Tracking Study. The research team included Suzanne Felt-Lisk, Jon B. Christianson, Linda R. Brewster, Ashley C. Short, Richard Sorian, Robert E. Hurley, Lawrence D. Brown, and Jessica H. May. The Community Tracking Study was funded by the Robert Wood Johnson Foundation.