Ochsner in tentative deal to run north Louisiana hospitals

December 19, 2017

BATON ROUGE, La. (AP) — Management of the state-owned safety-net hospitals in north Louisiana could soon be changing hands under a move announced Tuesday by Gov. John Bel Edwards, which is aimed at ending years of disputes over operations of the facilities.

Southeast Louisiana-based Ochsner Health System has tentatively agreed to take over day-to-day oversight of the Shreveport and Monroe facilities from BRF, which has managed the hospitals for four years as criticism mounted over its lack of experience and its unpaid bills.

“Based on our strategic and clinical expertise, we look forward to improving and expanding care while working with LSU to drive health care innovation in our state,” said Ochsner President and CEO Warner Thomas.

Originally a biomedical research foundation, BRF had never run a patient-care facility before taking over the hospitals. The Edwards administration and LSU, which previously managed the facilities, sent breach-of-contract notification letters to BRF in September claiming the manager, among many charges, was harming graduate medical education at hospitals where LSU’s doctors and medical students work and train.

Officials hope striking an agreement with Ochsner will remedy the complaints. Ochsner — which owns, manages or is affiliated with 29 hospitals in Louisiana — helps to manage the state-owned, safety-net hospital in Terrebonne Parish, an operating agreement that has generated no widespread criticism.

Edwards called Ochsner and LSU “proven partners.”

“Working together, in a more integrated fashion, we plan to successfully deliver quality, cost-effective patient care in an environment that is optimal for the continued teaching and training of our state’s future doctors and health care professionals,” the governor said in a statement.

The paperwork signed so far with Ochsner are non-binding “letters of intent” that spell out plans for the management transfer. But the official contract terms remain to be completed, a task Edwards’ chief lawyer Matthew Block expected to take months. A transition date isn’t set.

Also uncertain is whether the Ochsner takeover will boost the price tag for the privatization deal. Block said it won’t cost additional general state tax dollars, but whether other health financing dollars may be steered to the management agreement remains unclear.

“There’s a lot of work left to do,” Block said.

The contracts, once complete, will need approval from the LSU Board of Supervisors and the Legislature’s joint budget committee, according to the Edwards administration.

Block said BRF will retain a role “in the vision and planning for the hospitals” through an advisory board. LSU, which had no management role since BRF took over in 2013, will have more input into hospital oversight with Ochsner, Block said.

Former Gov. Bobby Jindal moved to shift Louisiana away from its unique charity hospital model of care for the poor and uninsured. He privatized nine LSU-run hospitals and their clinics through no-bid contracts, with the earliest deals starting in 2013. In most instances, the management company of a nearby hospital took over operations.

But Jindal had trouble finding an operator in north Louisiana. He turned to BRF, which didn’t have the financial resources of large hospitals.

The privatization deal has been contentious since it began.

LSU System President F. King Alexander said BRF doesn’t work to ensure high-quality medical education, doesn’t pay bills on time and doesn’t meet acceptable quality standards for patient care. BRF, which manages the two hospitals as University Health System, said the facilities suffer from inadequate state funding, financing discrimination against north Louisiana and unreasonable demands from LSU.

Both Alexander and University Health board chairman Steve Skrivanos said they were pleased with the management transfer plans.

Skrivanos said BRF improved patient access to care at both hospitals and looks “forward to continuing to deliver our substantial expertise in advancing biomedical research, which will continue to be invaluable to both hospitals.”


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