Ochsner Health System said Wednesday that it will soon undertake a $250 million project to add six stories to its main eight-floor building on Jefferson Highway and expand other facilities in the New Orleans area.
When the two-phase project is completed in about 2018, Ochsner’s capacity for patients at its main campus will increase from about 470 to about 640.
Plans also call for expanding the cancer center at the main campus, which treats patients from all over the southeastern part of the country, Ochsner said.
The non-acute hospital Ochsner runs on South Clearview Parkway in Elmwood will be converted into a center for outpatient and orthopedic surgeries.
Ochsner’s decision to expand those facilities follows years of expanding its regional presence.
For example, in the fall, Ochsner struck an agreement to acquire River Parishes Hospital in St. John the Baptist Parish, intending to transform the relatively small and underused acute-care hospital into an outpatient clinic offering primary and emergency care until the future construction of a new facility.
Last year, Ochsner signed a partnership with St. Tammany Parish Hospital in Covington, some months after it had taken over Hancock Medical Center in Bay St. Louis, Mississippi.
Other communities where Ochsner owns or operates hospital facilities include New Orleans, Kenner, Gretna, Baton Rouge, Raceland and Houma.
“Last year, patients from across Louisiana, all 50 states and nearly 90 countries chose Ochsner for their care,” system President and CEO Warner Thomas said in a statement. “Ochsner Health System remains committed to keeping health care local and building on our demonstrated ability to provide the highest-quality care to patients when and where they need us.”
The executive director of the Jefferson Economic Development Commission, Jerry Bologna, noted that Ochsner is one of the state’s largest private employers and “a critical component of our local economy.”
Jefferson Parish President John Young said expansion plans by a sizable private employer like Ochsner demonstrate that Jefferson Parish is economically viable and vital.
Founded in New Orleans in 1942, the Ochsner system opened its Jefferson Highway building in 1954. The building underwent expansions in 1960 and 1975-76. A three-floor west tower opened in 2000 and added three floors in 2005.
Ochsner said it will finance its latest main campus expansion with a bond sale slated for June 15. Fitch Ratings recently gave Ochsner a bond debt rating of BBB+, meaning it is very likely that the system will be able to repay past and future investors.
Ochsner said it also will be able to capitalize on better interest rates by refinancing its existing bond obligations, and that in turn will help finance the new expansions.
“The ratings improvements recently reported ... reflect external validation of our organizational stability,” Thomas said. They indicate that Ochsner has consistently succeeded in serving “more and new patients,” he added.
The first phase of the main building’s expansion should boost the facility’s total bed capacity from 473 to 539. The second phase calls for 100 more beds.
Ochsner went public about its expansion plans about two months before the new $1.2 billion University Medical Center is supposed to open in Mid-City New Orleans.
Ochsner may end up caring for a different type of patient than the University Medical Center will. The UMC is seeking nearly $400 million in state money for uninsured care and supplemental Medicaid funding.