LCMC is also partnering with Tulane University on efforts to expand academic medicine. The deal would leave two main players in the New Orleans hospital market.
LCMC Health has reached an agreement to buy three Louisiana hospitals from HCA Healthcare in a $150 million deal.
If the deal is approved by regulators, LCMC Health would acquire Tulane Medical Center, Lakeview Regional Medical Center, and Tulane Lakeside Hospital. All employees of the three hospitals would keep their jobs, the system said in a news release.
Assuming regulators approve the transaction, LCMC Health, a non-profit system, would operate nine hospitals in the New Orleans region. LCMC Health and Ochsner Health would emerge as the two health systems providing care for patients in and around New Orleans, as nola.com reports.
LCMC Health and Tulane University will also work together to expand academic medicine and research opportunities and increase training opportunities for doctors and nurses. LCMC also announced plans to invest an additional $220 million in East Jefferson General Hospital, Lakeview Regional Medical Center, and Tulane Lakeside Hospital.
Under the proposal, most services provided at Tulane Medical Center would shift to nearby East Jefferson General Hospital and University Medical Center New Orleans over the next 12-24 months, while the medical center would be repurposed. LCMC said this would offer more options for care at facilities that can support growth.
“LCMC Health and Tulane University have shared values and a vision to partner to bring the best of community healthcare and academic medicine to all those we serve,” LCMC Health CEO Greg Feirn said in a statement.
“With this transformational partnership, we can build on our strong history of collaboration with our academic partners, Tulane University and Louisiana State University, to do more for our patients, communities, and region together than would be possible as separate organizations,” Feirn said.
HCA acquired Tulane Medical Center in 1995, adding the Tulane Lakeside Hospital in 2005, and Lakeview Regional in 2017.
The repurposing of the medical center and the revitalization of the Charity Hospital building, which has been shuttered since Hurricane Katrina in 2005, will house a new nursing program, space for research and graduate programs. Tulane estimates the expansions will add 2,300 jobs.
"Together with LCMC Health, we can combine our strengths to expand world-class academic medicine in the greater New Orleans area," Tulane University President Michael A. Fitts said in a statement. "Academic medical centers provide the most complex and high-quality care and are the birthplace of new treatments and technologies. This partnership will help drive clinical, educational, and economic innovation and growth that improves the quality of life across our entire region."
LCMC Health and Tulane said they expect the deal will be complete late this year or early next year, if regulators approve the transaction. The Louisiana Department of Justice will review the proposal and a public comment period will take place over the next 90 days.
It’s been a slow period for hospital mergers and acquisitions, some analysts expect more activity in the coming months. There have been some deals that have been announced or completed recently.
Yale New Haven Health reached an agreement to buy two Connecticut health systems from Prospect Medical Holdings. Trinity Health just completed the acquisition of MercyOne in Iowa.
Earlier this year, Ochsner Health completed the acquisition of Rush Health Systems, expanding more services in Mississippi.
Federal regulators have applied more scrutiny to hospital mergers involving systems and hospitals in overlapping markets. The Federal Trade Commission has opposed several proposed deals involving systems in the same region, prompting the systems to abandon their plans.
President Joe Biden issued an executive order directing his administration to carefully review hospital consolidations, citing concerns of higher prices and reduced services in some mergers.
HCA Healthcare, the for-profit system managing 182 hospitals, continues to expand in fast-growing areas, with plans to build new hospitals in Texas and Florida. But HCA has shown a willingness to step away in some markets. Last fall, HCA sold four hospitals in Georgia to Piedmont Healthcare, where analysts noted other providers had a greater presence.