Ochsner Health is a system that delivers health to the people of Louisiana, Mississippi and the Gulf South with a mission to Serve, Heal, Lead, Educate and Innovate.
Lafayette General Health Signs Letter of Intent to Merge with Ochsner Health System
Combined system will be largest and most comprehensive healthcare provider in the Gulf South and will bring $365 million in investments to the Acadiana region
Photo Caption (pictured left to right): David Callecod (President, Lafayette General Health), Warner Thomas (President & CEO, Ochsner Health System) and Andrew Wisdom (Chair, Board of Directors, Ochsner Health System).
The Board of Trustees of Lafayette General Health and Ochsner Health announced today they have signed a letter of intent for Lafayette General to merge with Ochsner Health System. The merger builds on the clinical affiliation between the two health systems and the combined organization will be the largest and most comprehensive healthcare provider in the Gulf South, enabling them to improve access to high quality healthcare across the region.
“Our vision is to truly improve the health of Louisianans and people across the Gulf South,” said Lafayette General Health Board of Trustees Chairman David Wilson. “Just last year, Louisiana ranked as our nation’s least healthy state. By combining our resources and talent, we will be able to provide better access to healthcare here in Acadiana and to continue growing our local economy.”
“Lafayette General is a tremendous health system known for high quality care and an extraordinary commitment to patients,” said Ochsner Health Board of Directors Chairman Andrew Wisdom. “We are proud of what we’ve been able to accomplish through our four-year affiliation, but we know we have only scratched the surface of what we can do together to strengthen access to services in the region and across the state.”
Partnership Details
As part of the agreement, Lafayette General will anchor services as the regional healthcare hub in Southwest Louisiana for the statewide health system, and Ochsner will invest $365 million in capital and resources in Acadiana over the next 10 years.
Commitments include:
- Expanding and enhancing clinical services focused on the critical health needs of Southwest Louisiana
The system will invest more than $50 million in expanding key services including pediatrics, women’s health, cancer services and more, as well as introduce pioneering behavioral health services the community desperately needs.
- Increasing access to care for all patients, regardless of insurance coverage or ability to pay
The partnership will provide greater financial stability for University Hospital & Clinics, enabling the hospital to continue serving the most vulnerable members of the community. Additionally, a 10-year, $10 million Community Support Fund overseen by the Lafayette General Board will be created to advance health and wellness in Acadiana.
- Strengthening training and education for Lafayette General employees, providers and caregivers
A major investment in graduate medical education will be made at Lafayette General Medical Center to help train the physicians of the future. The system will add approximately 48 residency positions at the medical center, building on the 75 positions currently at University Hospital & Clinics and LGMC. Workforce development programs and continuing education to support employees will grow to include physician assistants, respiratory therapists, pharmacy assistants, registered nurses, surgical technicians and medical assistants.
- Increasing minimum pay for employees
All current Lafayette General employees will continue with the combined organization, and minimum pay will increase by nearly $2 to $12 per hour across the system, impacting 800 employees. The system aims to increase jobs over time, as services expand.
- Maintaining local control to ensure Lafayette General Health continues to be a cornerstone of the region
Lafayette General will maintain an open medical staff, allowing physicians to choose how they affiliate with the health system. The current leadership team and Board of Trustees will continue to guide the system and provide operational oversight. Lafayette General will keep its name and co-brand with Ochsner after completion of the merger.
- Advancing digital innovation and patient-centered solutions
The combined system will invest in further development of digital health tools at Lafayette General to empower patients and lower the cost of care. In addition, $1 million will be invested in the Healthcare Innovation Fund at the Lafayette General Health Foundation to further digital medicine and technology initiatives in Acadiana. The Fund, which started in 2016, supports healthcare startup businesses across the region.
“Patients will continue to have access to the same services and physicians they know today,” said John Schutte, MD, a member of the Lafayette General Health Board of Trustees and a 32-year practicing orthopedic surgeon. “Our aim is to enhance and expand services for Southwest Louisiana, so that people in Acadiana do not have to leave the area for services. We will work to expand sub-specialty care, especially in pediatrics and oncology,”
Drivers for Partnership
Across the country, strong health systems are coming together to make healthcare better and more affordable for their communities. In fact, over the past three years, 307 hospital partnership transactions have been announced in the United States, and in 2018, five partnership transactions were announced in Louisiana alone. [1] Industry headwinds require significant expertise, resources and scale for health systems to succeed and to meet the evolving needs of their communities.
“The reality is that the healthcare industry is fundamentally changing and creating challenges for healthcare providers – especially health systems of our size,” said Lafayette General Health President David L. Callecod, FACHE. “Now is the time to make proactive decisions to fulfill our mission and allow us to thrive well into the future. We are proud to be Acadiana’s trusted healthcare provider, and in partnership with Ochsner, we will be better positioned to ensure access to local, quality care for generations to come.”
“As two of the leading health systems in our state, we have the responsibility to improve quality and safety, increase access and make healthcare more affordable,” said Ochsner Health President and CEO Warner Thomas, FACHE. “It’s no secret that we face a number of critical health issues in Louisiana – rising incidences of hypertension, obesity, chronic disease and growing demand for key services such as oncology care, stroke care, women’s and pediatric services and more. Joining together, we can tackle these issues to improve healthcare much faster than we can by working alone.”
Signing the letter of intent to merge with Ochsner Health is the first step in a process that will take several months to complete. Both organizations will now enter into a period of due diligence and seek required regulatory approvals. The merger is expected to be finalized in the spring of 2020.
To keep physicians, employees and the community informed about the partnership and what it means for them, a dedicated website has been launched at: www.LeadingTogetherLA.org.
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About Ochsner Lafayette General
Ochsner Lafayette General has more than 5,500 employees and serves 220,000 patients per year. The organization includes Ochsner Lafayette General Medical Center, Ochsner Lafayette General Orthopedic Hospital, Ochsner Lafayette General Surgical Hospital, Ochsner St. Martin Hospital, Ochsner University Hospital & Clinics, Ochsner Acadia General Hospital, Ochsner Abrom Kaplan Memorial Hospital, Ochsner American Legion Hospital and a number of clinics, urgent cares and professional centers. Ochsner LGMC is the only Level II Trauma Center in Southwest Louisiana. Both Ochsner LGMC and Ochsner UHC are major teaching hospitals, providing graduate medical education across many disciplines.
About Ochsner Health System
Ochsner Health is Louisiana’s largest non-profit, academic, healthcare system. Driven by a mission to Serve, Heal, Lead, Educate and Innovate, coordinated clinical and hospital patient care is provided across the region by Ochsner's 40 owned, managed and affiliated hospitals and specialty hospitals, and more than 115 health centers and urgent care centers. Ochsner is the #1 ranked hospital in Louisiana by U.S. News & World Report and is recognized as a “Best Hospital” across two specialty categories caring for patients from all 50 states and more than 70 countries worldwide each year. Ochsner Hospital for Children is the only facility in Louisiana to be recognized as a top 50 children’s hospital by U.S. News & World Report for three consecutive years. Ochsner employs nearly 25,000 employees and over 4,500 employed and affiliated physicians in over 90 medical specialties and subspecialties and conducts more than 700 clinical research studies. Ochsner Health is proud to be a tobacco-free environment. For more information, please visit ochsner.org and follow us on Twitter and Facebook.
[1] https://www.fiercehealthcare.com/hospitals-health-systems/report-what-to-expect-healthcare-m-a-2019
https://www.fiercehealthcare.com/finance/hospital-mergers-and-acquisitions-kaufman-hall