Business Roundup: Ochsner, Slidell Memorial Study 'Strategic Partnership'

Greater access to healthcare services for residents living outside metro New Orleans is one of the aims of a proposed collaboration between Louisiana's largest not-for-profit, academic health system and a not-for-profit community hospital.

Louisiana's Ochsner Health System and Slidell Memorial Hospital are negotiating a "strategic partnership" that both sides believe will better position them to meet the demands of value-based, population health.

SMH CEO Bill Davis says the letter of intent to negotiate the partnership that was signed last week signals neither an acquisition nor a purchase of one hospital by the other.

"We are just trying to create a structure where in this environment we are able to improve access to care, quality of care, and lower the cost of care," Davis says. "If that means two organizations have to collaborate rather than duplicate services, we feel comfortable with that, in this particular marketplace, if that is the best opportunity for achieving those three goals."

SMH is a 229-bed acute care not-for-profit community hospital in a service area of about 90,000 people, located 33 miles northeast of New Orleans. Gretna-based Ochsner is Louisiana's largest not-for-profit, academic health system and includes 13 hospitals, 50 health centers, more than 15,000 employees and nearly 1,000 physicians.

If the deal is finalized as expected sometime this summer, SMH will become part of the newly formed Ochsner Health Network and will work within an oversight committee that will include equal representation from both SMH and Ochsner.

SMH, however, will remain an independent community hospital with its current board governing the hospital. Each organization will retain its name and assets.

"The challenges we currently face as healthcare providers are unprecedented. There is no doubt the future of healthcare will be about partnership and collaboration," Ochsner President and CEO Warner L. Thomas said in a media statement.

"Partnerships like this one are crucial for stand-alone community hospitals and individual providers as well as for larger systems. We are lucky to have two organizations with common cultures partnering together to improve the delivery of healthcare and to continue to make our communities stronger and healthier." 

Davis says a strategic partnership has the potential to bring "the best of both worlds" to SMH and Ochsner.

"We are the leading hospital in our region," he says. "The community is invested in us to make sure we focus on delivering comprehensive services and a high level of quality locally. As a result, we felt pretty strongly that the local community wanted to be in partnership or control over the delivery of medicine locally."

The realities of the evolving healthcare delivery landscape and the advantages of consolidation make it difficult to go it alone to leverage better prices from suppliers and payers, and to eliminate redundant and expensive administrative and support systems, Davis says.

"We knew that ultimately we needed to partner with somebody, but not necessarily for a lot of the things that we do very well locally," he says. "The biggest deficit we've had, because we are a small, local community hospital, is intellectual capital. All the capabilities to be able to manage population health, to improve population health status, there is no way that a small player like us can deploy numerous layers of electronic medical records and other data capabilities."

Davis says he does not foresee the strategic alliance evolving into "a total sellout."

"The fact of the matter is that having local control and input with these systems of delivery really adds value, more than ever, in the new era of healthcare where you are talking about population health status improvement and population management," he says.

"You need to know that culture and be immersed in that culture because it's not necessarily going to be a cookie cutter that is going to solve the problem. You have to know your local community and the region's culture, demographics, their socio-economic challenges, to be able to come up with solutions that solve better quality, lower cost, and improved population health status."

Baptist (FL), MD Anderson Create Cancer Center

Jacksonville-based Baptist Health and the University of Texas MD Anderson Cancer Center have finalized a partnership to create a joint cancer program serving northeast Florida and southeast Georgia.

The program will be housed in the Baptist Outpatient center but will eventually move to a new building in 2017.

"The final approval of this agreement brings us one step closer toward the realization of our partnership with an international leader in cancer care," Baptist President/CEO Hugh Greene said in prepared remarks.

The two health systems are recruiting a dedicated care team of medical oncologists and other medical and surgical experts to join the existing cancer care staff. The goal is to replicate the MD Anderson care model.

Under the deal, Baptist Health will become a partner member of MD Anderson Cancer Network, which means that the Baptist cancer program will be operationally and clinically integrated with MD Anderson, so that patients at Baptist MD Anderson can access multidisciplinary care options, including access to ongoing cancer research and select clinical trials.

Baptist Health includes five hospitals with 1,129-licensed beds, 1,644 medical staff and more than 250 outpatient facilities throughout North Florida and South Georgia.