Lafayette General Health is joining the Ochsner Health Network, but the “long-term, strategic partnership” doesn’t involve a purchase or acquisition by either organization.
Instead the agreement will allow the health organizations to combine their buying power to help reduce costs for specialty items, such as implants and cardiology-related items, Lafayette General Health President David L. Callecod said Monday. The need for health systems to partner is greater than ever thanks to the changes wrought by the Affordable Care Act and the ongoing shift to a system that pays providers more for keeping patients healthy than for the volume of treatments.
“This is really two very like-minded organizations that are focused on highest quality and highest patient satisfaction and delivering at the lowest possible cost,” Callecod said.
Warner Thomas, president and CEO of Ochsner Health System, said LGH is one of OHNs founding partners in “an evolving multi-state network.”
He said Ochsner prefers partnerships. They’re easier and allow Ochsner to avoid issues involving control, governance and purchasing facilities, he said. Ochsner can accomplish many of the same goals through agreements than buying a facility or facilities. A lot of organizations don’t need new owners, just the right partner, he said.
Ochsner plans to establish more partnerships and eventually form a statewide and then multi-state network of health care facilities, he said.
Lafayette General Health includes six hospitals: Lafayette General Medical Center, Lafayette General Surgical Hospital, St. Martin Hospital, University Hospital & Clinics, Acadia General Hospital and Abrom Kaplan Memorial Hospital. The health system has more than 3,000 employees and treats patients in a 10-parish area.
Ochsner is Louisiana’s largest health system, with 13 hospitals, more than 50 health centers and more than 15,000 employees in southeast Louisiana.
LGH began evaluating potential partners a year ago and talks with Ochsner ramped up over the past three or four months. The partnership will create greater opportunities through an integrated physician network, joint investments in resources needed to start new programs and the expansion of patient services and resources in the region, according to the health systems. Areas of initial focus include expanding pediatric subspecialty care and comprehensive stroke care. The plans also call for adding telemedicine services like TeleStroke and TeleNICU at LGH facilities. The partners also will launch additional initiatives aimed at improving the treatment of chronic diseases like high blood pressure and diabetes.
One of the big advantages for LGH and its patients will be access to Ochsner’s subspecialists in stroke and neonatal intensive care, Callecod said.
Lafayette General has made major investments and advancements in its telemedicine program, establishing telemedicine clinics inside Stuller Inc., one of the largest jewelry suppliers; the Lafayette Consolidated Government; and the Lafayette Parish School System. This has helped LGH deal with the shortage of primary care physicians. But smaller communities or even metro areas don’t have the populations necessary to support subspecialists.
“Let’s face it, we’re going to be facing tremendous physician shortages, and you’re going to see subspecialists congregating in very few places going forward,” Callecod said.
The agreement with Ochsner will allow LGH’s neonatal intensive care unit physicians to refer a patient to an Ochsner specialist. Through “telepresence,” that doctor can evaluate the patient, provide recommendations, talk to the parents and give them some guidance.
“It’s going to make it easier for those visits to occur and much more timely,” Callecod said.
Partnerships like Ochsner-LGH are part of the strategic moves underway in the hospital industry, which has seen a wave of consolidations in the last few years. In 2014, there were 79 mergers and acquisitions, down from 2012’s high of 94 deals, according to accounting giant PwC. Statewide and multi-state health systems are expected to be very successful in the coming years.
The Lafayette General Health partnership is the second Ochsner announced in April. Two weeks ago, Ochsner announced plans for a similar partnership with Slidell Memorial Hospital.
An advantage for Ochsner with the Lafayette General Health partnership includes attracting more patients from the Acadiana region.
Thomas said Ochsner’s goal in its partnerships is to keep health care local. But lots of people from western and central Louisiana go to Texas for care, and Ochsner would like to bring those patients east.
“We want to keep Louisiana people in Louisiana for medical care,” Thomas said.
“Really what we’re building is more of a regional or statewide Accountable Care Organization where we’re going to be accountable for the care of the people for whom we’re responsible,” Thomas said.
Ochsner is essentially organized as an ACO today, he said. The health system has arrangements with Humana, UnitedHealth, and Blue Cross and Blue Shield of Louisiana that reward the provider for keeping patients healthier rather than for the number of treatments.
Through partnerships, Ochsner can bring this capability to other organizations, he said. By sharing ideas with its partners and learning from them, Ochsner and its partners can improve health care across the region.