In a move experts say will make Louisiana’s largest nonprofit health care system even more dominant, Ochsner Health System announced Thursday it will launch a $360 million expansion to its Jefferson Highway campus, much of which should be completed in three years.
The Ochsner network last year treated more than 600,000 patients from around the globe. Officials said the expansion — the biggest in the institution’s history — will allow it to care for even more people, while creating hundreds of construction and medical jobs in the process.
Some of the projects had previously been announced, but others were revealed for the first time Thursday, as was the total price tag for the expansion.
Through a combination of private donations, a recent bond sale and its own operational funds, officials said, Ochsner has secured enough money to add seven floors to its main Jefferson Highway building, expand its cancer treatment center and build a new facility to provide MRIs, CT scans and mammograms for outpatients, all by 2019.
Ochsner said it also plans to partner with outside entities on other projects, such as a physical rehabilitation hospital to be built on the largely vacant 8-acre site of the former Jefferson Plaza shopping mall, west of the main Ochsner campus.
The expansion’s primary goal is to ensure Ochsner has the space and tools to keep locals who need medical treatment from leaving the area, while also offering enough specialties to treat as many outside patients as possible, system CEO Warner Thomas said.
The expansion is expected to create hundreds of construction jobs and later employ hundreds of physicians, nurses and other specialists.
The Jefferson Economic Development Commission and economist Loren Scott estimate the new facilities will generate hundreds of millions of dollars in new business sales, household earnings and tax revenue at both the state and parish levels, Thomas said.
Parish President Mike Yenni said he hopes Ochsner’s expansion will energize economic development along Jefferson Highway the same way Zephyr Field and the Saints’ training facility did for Airline Drive.
While $360 million “is a very large number,” Pennsylvania-based hospital mergers and acquisitions expert Joshua Nemzoff said the investment is a safe one for Ochsner, which generates about $2.5 billion in revenue annually.
The expansion should also strengthen what is already “an 800-pound gorilla” in the New Orleans health care market, said Nemzoff, who advised the Jefferson Parish Council on its decision last year to lease West Jefferson Medical Center to LCMC Health.
UNO economics professor Walter “Dub” Lane said Ochsner should have no problem finding patients for its new hospital beds, noting that it has acquired or affiliated with several other hospitals and medical facilities in the area, including in Kenner, Gretna, Covington and Slidell.
Among the first projects to get underway will be adding seven floors to Ochsner’s eight-story main hospital. Six of the floors will be used to treat patients. Three will be furnished and occupied over the next two years, while the other three will be left empty for future expansion. The remaining floor will be used for maintenance equipment.
Thomas said that the $104 million addition will raise the inpatient capacity at Ochsner’s main campus from about 600 to nearly 770. He said Ochsner last year handled 9,000 patient referrals to its Jefferson campus, up drastically from 2,000 in 2010.
Ochsner also plans to more than double the size of the 6-year-old Gayle and Tom Benson Cancer Center with a 100,000-square-foot addition, enabling the facility to provide more patient services and conduct more research. A $20 million donation from the Saints owner and his wife will fund most of that $35 million project. A previous $20 million donation from the couple was used to create the facility, which is adjacent to the hospital’s main building.
Across Jefferson Highway from its main building, Ochsner intends to spend more than $12 million constructing an outpatient imaging center. The imaging center now in operation at the main campus will then be used only for inpatient care.
Next to the new imaging facility, Ochsner plans to add a medical procedure simulation lab to its academic center, where students enrolled in Australia’s University of Queensland medical school receive training, Thomas said.
A few blocks away at Jefferson Highway and Maine Street — the former Jefferson Plaza site — Ochsner and Pennsylvania-based Select Medical have agreed to build a $56 million, five-floor hospital to treat inpatients rehabilitating from trauma, strokes, neurosurgery and orthopedic procedures.
Plans also call for building an outpatient physical and occupational therapy clinic at that location, setting up food retailers, and providing new short- and long-term housing for patients and their relatives to augment Ochsner’s Brent House Hotel.
Ochsner is leasing the Jefferson Plaza tract from the New York-based Feil Organization, which reportedly spent $5.5 million last year to purchase the parcel, once home to defunct businesses such as an A&P grocery and a Frostop restaurant, the shell of which was torn down by an excavator on Thursday. Lease terms weren’t disclosed.
The Jefferson Parish Planning Advisory Board will hold a public hearing Feb. 25 on a zoning change request that would clear the way for redevelopment of the Jefferson Plaza site.
To accommodate its anticipated growth, Ochsner plans to add 300 parking spaces to its existing Jefferson campus garage and to build a new one at Jefferson Plaza.
Additional projects in the $360 million expansion campaign are expected to be announced later; some may not be completed until after 2019, officials said.