Two The two largest hospitals in Lafayette, La., have announced exploratory talks on forming an unspecified "closer affiliation." Informed sources suggested a merger is intended.
Our Lady of Lourdes Regional Medical Center, a 288- bed facility operated by Franciscan Missionaries of Our Lady Health System, has announced it is looking into some form of consolidation with Louisiana Health System, parent company of Lafayette General Medical Center.
Lafayette Gene ral is a 337-bed tertiary center serving south central Louisiana. The hospitals said the eventual form of the alliance has not been determined, but it could result in a single healthcare delivery system. Both are not-for-profit ins titutions. The process of evaluating a potential affiliation is expected to take three to four months.
If they combine, Lourdes and Lafa-yette General would have two-thirds of the total acute-care beds in Lafayette and 59% of inpati ent admissions, according to the American Hospital Association. University Medical Center, a public teaching hospital operated by the Louisiana Health Care Authority, has 143 beds. Two Columbia/HCA Healthcare Corp. hospitals-Columb ia Medical Center of Southwest Louisiana and Columbia Women's and Children's Hospital-have a combined 182 beds.
Gerald A. Fornoff, chief executive officer of Columbia Southwest, said: "With today's ever-changing market, we believed it would only be a matter of time that Lourdes and General would `jointly' explore ways to better control costs and maximize efficiencies."
Neither Lourdes nor Lafayette General officials would talk about the consolidation or its rationale. Berch Stelly, spokesman for Lourdes, said, "This process is being driven by our boards, and our board has decided that they are not going to make comment beyond the comments contained in the statement."
Asked whether a merger would stand up against antitrust scrutiny, Paulette Weir, communications director for Lafa-yette General, said: "Whether the Justice Department or the Federal Trade Commission will review this will depend on how this market is defined geographically. Is it the city of Lafayette itself or a larger area of several parishes?"
Neither hospital is under financial pressure. For Our Lady of Lourdes, the only Roman Catholic hospital in a very Catholic town, 1995 was an extremely profitable year, according to figures from HCIA, a Baltimore-based healthcare information company. It had a 19% operating profit margin on $104 million in net patient revenues, compared with a 5% profit margin on $99 million in revenues in 1994. Even more remarkable, it accomplished that financial turnaround while acute-care occupancy was declining to 65% in 1995 from 75% the year before. Lourdes' total assets ballooned to $155 million in 1995 from $125 million in 1993.
Lafayette General, however, has seen its operating results decline. In 1992 it had a 7% total profit margin on $102 million in net patient revenues. In 1993, it had a 6% profit margin on $104 milli on in revenues, and in 1994 its margin sank to just under 4% on $106 million in revenues.