The ownership of Roper St. Francis Healthcare, one of the Charleston region’s largest employers, is about to change hands, and so is its top job.

Bon Secours Mercy Health and the Medical Society of South Carolina said Wednesday that they plan to restructure their Roper St. Francis joint venture, pending necessary approvals and the completion of due diligence. When the deal is final, Bon Secours Mercy Health will hold 51% of the system and the Medical Society 49%.

Atrium Health, the Charlotte-based system formerly known as Carolinas HealthCare System, will fully divest its 10% stake, the partners said. The transaction is expected to close by the end of the year.

Today the Medical Society is the majority owner with 63%, and Bon Secours Mercy Health holds 27%, The Post and Courier reported. The three-way ownership has been in place since the partners formed the joint venture in 1998.

Lutton steps aside

Lorraine Lutton, Roper St. Francis’ CEO since November 2016, will become Bon Secours Mercy Health’s market operations executive effective Jan. 1, the partners said. A national search for a new CEO will be conducted.

Roper St. Francis credited Lutton with helping the system gain greater financial stability, exceed its quality goals, strengthen employee engagement, develop its Integrated Physician Network and open the new Roper St. Francis Berkeley Hospital, which it said is already exceeding volume projections.

In a letter to employees Wednesday, Lutton said she was “proud and grateful to have worked with such an amazing team,” The Post and Courier reported. The health system declined to say where she will be based in her new role.

Lutton, the system’s first female CEO, had a base salary of roughly $887,000 in 2017 and total compensation of more than $1 million, according to the hospital’s tax forms, the newspaper reported.

Why Bon Secours Mercy Health wants more

Bon Secours Mercy Health, a Catholic health system based in Cincinnati, describes itself as one of the 20 largest health care systems in the nation.

John Starcher, president and CEO of Bon Secours Mercy Health, said the tri-county area “is growing rapidly and we are excited to increase our commitment to this community.”

“The opportunity to scale strategically in a growing market like this is another key step toward strengthening our ministry for the long-term,” Starcher said. “We see this as a prime market in which we will continue to make significant capital investments that benefit the health and well-being of greater Charleston area residents for years to come.”

The two remaining owners said they share a vision of creating the preeminent health care system in coastal South Carolina, one capable of delivering superior quality and value, achieving economies of scale and expanding access for a growing population.

Dr. Henry West, president of the Medical Society of South Carolina, said the partners’ long-term vision is aligned and that they “will work to ensure a high level of collaboration across our Integrated Physician Network, which will be critical to the long-term success of our health care system.” He also thanked Atrium “for the work they have done over the last 21 years as a founding member of this joint venture to improve the health of our community.”

The partners’ history

The Medical Society, founded by Charleston physicians on Christmas Eve 1789, established Roper Hospital in 1852 with a bequest from Col. Thomas Roper, according to a history published by Roper St. Francis. The hospital began admitting patients regularly in 1856.

The Sisters of Bon Secours took over sponsorship of St. Francis Xavier Hospital in 1989, and the hospital moved from the peninsula to West Ashley in 1996, according to the same history. The Medical Society met on Christmas Eve 1997 to vote on merging Roper and Bon Secours St. Francis.

Roper St. Francis paid Atrium millions of dollars in management fees for years before ending that agreement in early 2019, The Post and Courier reported.

The system today

Roper St. Francis runs Roper Hospital in downtown Charleston, Bon Secours St. Francis Hospital in West Ashley, Roper St. Francis Mount Pleasant Hospital and the newly opened Roper St. Francis Berkeley Hospital, a 50-bed hospital that opened on time and on budget, according to the newspaper. Together the four hospitals have 668 beds, The Post and Courier reported.

With roughly 5,500 workers, Roper St. Francis is the region’s second-largest private employer after Boeing, The Post and Courier reported. The system has operated at a loss for the last three fiscal years, though a quarterly statement from August shows it has made money this year, the newspaper reported.

Roper St. Francis spokesman Andy Lyons declined to comment beyond the announcement.