A partnership is being formed by Baton Rouge General’s parent company and Ochsner Health System to jointly operate their three local hospitals and 31 clinics.
The partnership does not involve a merger or acquisition by either health system. Ochsner has formed more than a dozen of these strategic partnerships in Louisiana in the past few years. The local partnership eventually will oversee operations across the nine-parish Baton Rouge area and in four counties in Mississippi.
The General Health-Ochsner partnership will improve access to care and reduce costs for patients, their employers and the health systems while increasing efficiency, said Mark Slyter, chief executive officer of General Health System. It also will position the partners to better compete with the Franciscan Missionaries of Our Lady Health System.
“At the end of the day, the community wins when you have two similarly sized organizations competing to provide the best care for the community,” said Slyter, who will lead the General Health-Ochsner partnership.
The Franciscan health system still dwarfs the partnership, accounting for more than half of all hospitalizations in the area.
Ochsner and Baton Rouge have a long history of collaboration. Ochsner’s clinic on the General’s Bluebonnet campus is 20 years old.
The new arrangement integrates the two organizations financially, and Slyter described it as the next step in transforming health care in Baton Rouge.
The joint system will include:
Baton Rouge General’s Mid City and Bluebonnet campuses
Ochsner Medical Center - Baton Rouge on O’Neal Lane
21 Baton Rouge General physicians clinics
10 Ochsner health centers.
“We believe there’s many, many millions of dollars of savings there, with the opportunity to consolidate certain clinical services … and also reduce the cost to provide many of those services,” said Warner Thomas, Ochsner Health System president and CEO.
Slyter said the partnership will study all its options, including combining back-office operations. He acknowledged that this strategy generally results in job cuts.
However, Slyter quickly added that the partnership, with more than 5,000 employees, will be stronger than its individual parts.
“We’re looking for growth opportunities from this,” Slyter said.
Thomas said the partners aren’t finished collaborating.
“There’s other organizations around the Baton Rouge area that will be looking, or are looking, for more types of partnerships,” he said. “I think together we’re an even more attractive option than we are separately.”
The partnership is the latest wrinkle in Baton Rouge General’s unfolding business strategy.
In November, the health system announced a plan to turn its Mid City campus into a hub for seniors and the chronically ill, while making the Bluebonnet campus the centerpiece of a 142-acre health care, lifestyle and entertainment development. Mid City closed its money-losing emergency room earlier in the year.
The health systems have been discussing a deal for more than a year, and the details of the sweeping agreement will take several months to hammer out, Slyter said. The partners announced their plans now because they will need to get their stakeholders involved, particularly their physicians.
“We knew the information would get out, and we wanted to make sure the right information was out there,” Slyter said. Slyter notified health system employees of the planned partnership by email Thursday morning.
One of the partnership’s benefits will involve moving to a common information technology platform. Ochsner uses Epic Systems’ software.
The General will move its clinics to Epic by the end of the year, Slyter said. The cost will be about $4 million to $5 million, about half what the General would have paid without Ochsner.
Moving both of Baton Rouge General’s hospitals to Epic will require a greater investment, he added.
Thomas said a common IT platform’s most powerful asset is the benefit to patients.
Placing all of the patient information in one location makes it possible to coordinate care among family doctors and specialists, he said. Shared electronic health records already have enabled Ochsner and its partners to cut costs by reducing the number of duplicate tests.
Emily B. Grey, who leads Breazeale, Sachse & Wilson law firm’s health care section and is not involved in the partnership transaction, said the enormous expense of information technology is one of the main drivers for provider partnerships.
The IT requirements are just one of the changes wrought by the federal health care law, she said. Providers also are joining together to figure out how best to cope with changes in payments and the huge cost of complying with federal regulations.
By partnering, rather than going through a merger, providers can maintain their own identities and culture, Grey said. They also can survive.
Slyter said combining forces isn’t so much a matter of survival as a shared vision for the future.
The partnership will make it much easier for Ochsner and Baton Rouge General patients because there are many more access points, including hospital locations at Bluebonnet Boulevard, O’Neal Lane and Mid City, he said.
Slyter will lead the partnership, which will include Ascension, East and West Baton Rouge, East and West Feliciana, Iberville, Livingston, Pointe Coupee and St. Helena parishes, and Adams, Franklin, Jefferson and Wilkinson counties in Mississippi.
Members of the partnership’s management team and their roles are still being determined, including Eric McMillen, CEO of Ochsner Medical Center - Baton Rouge. There will be a combined local board and leadership.
Thomas said the partners will use the five to six months it will take to work out the final agreement to discuss details with their physicians and other stakeholders.
The partnership will not affect the employment of Ochsner clinic physicians or Baton Rouge General physicians. Both groups will become part of the integrated system.
Follow Ted Griggs on Twitter, @tedgriggsbr.