Ochsner, St. Charles Hospital ink management deal _lowres

St Charles Parish Hospital

Publicly owned St. Charles Parish Hospital announced Thursday that it will strengthen an existing relationship with Ochsner Health System, which will begin providing management services under an arrangement officials say will expand services and reduce costs for patients.

“We are excited to expand our affiliation with Ochsner. As a community hospital, we have a duty to care for the people of St. Charles Parish,” hospital CEO Federico Martinez Jr. said in a written statement. “This opportunity allows us to continue to strengthen existing services while increasing access to resources not currently available to our patients.”

Martinez said earlier this year that hospital officials were exploring “some form of affiliation with a larger health care system” because of rising costs tied to implementation of the federal Affordable Care Act.

Ochsner already provides primary and specialty care services at the Luling hospital. Under the deal announced Thursday, it now will help to manage the hospital, though the facility will still be owned by the St. Charles Hospital Service District and Martinez will remain as the CEO.

“As health care evolves, expanding affiliations like this better position each organization for success in this new value-based environment,” Ochsner President and CEO Warner Thomas said in a statement.

Thomas added: “The strategic benefits for both organizations will provide better alignment of resources and growth opportunities for their physicians and, most importantly, their patients. Patients will have the convenience of being treated close to home while gaining better access to the depth and breadth of care for which Ochsner is nationally recognized.”

In an interview, Martinez said the deal’s terms, including its length and how much compensation Ochsner will receive, are being negotiated.

Thomas declined through a spokeswoman to comment on those negotiations.

“They’re obviously a lot bigger than we are,” Martinez said of Ochsner. “They bring a lot of clout when it comes to negotiating” with contractors for services, supplies or equipment. “It will help us both on the revenue side and the expenses side.”

The arrangement will not result in layoffs, he said. Instead, Ochsner will bring new physicians and specialists to the facility, which should cut down on patient referrals to other hospitals.

Earlier this month, St. Charles residents voted by a wide margin to renew an annual $2.9 million property tax that largely supports emergency services at the hospital. The money is expected to be used, in part, to add a third ambulance during peak hours, expand the 59-bed hospital’s emergency room, staff a new cardiology unit and pay for advanced cardiac life support training for the medical staff.

An audit released by the state’s legislative auditor in March showed the hospital ended the last fiscal year with $12.1 million in cumulative debt, including about $4.7 million that went toward a lump-sum pension payment. The audit also cited problems with hospital procedures and internal controls, saying some money generated from $14 million in general obligation bonds issued during the 2012-13 fiscal year was spent for reasons not in line with the bonds’ intended purpose.

Hospital executives disagreed that the $2.2 million spent on service fees was inappropriate.

The hospital recently broke ground on a $15.5 million building in Destrehan slated to be completed by May 2015. It will house additional specialty physicians and urgent care facilities, as well as offices, an optometry center and a pharmacy, Martinez said.

Follow Richard Thompson on Twitter, @rthompsonMSY.