New Orleans-based Ochsner Health System has agreed to acquire River Parishes Hospital from for-profit hospital company LifePoint Hospitals. Ochsner will operate the 106-bed hospital as an outpatient facility.
Financial details were not disclosed for the transaction, which is expected to close Nov. 1. Ochsner, the largest health system in Louisiana, said the ultimate goal is to build a new facility with emergency, primary care, laboratory and radiology services within the next 18 to 24 months.
More not-for-profit hospitals and health systems have recorded lower inpatient utilization and higher outpatient volumes in recent quarters and years. In several instances, hospitals such as River Parishes have ended inpatient services altogether while remaining open as emergency outpatient facilities. Eastern Niagara Health System followed that strategy last month, shuttering the inpatient side of its hospital in Newfane, N.Y.
An Ochsner spokesperson said layoffs will be part of the deal. Local media reports said about 60% of the hospital's full-time staff will be let go.
Patients who normally receive inpatient and surgical care at River Parishes, in LaPlace, La., about 30 miles northwest of New Orleans, will go to Ochsner's hospital in Kenner, La., or to two other local hospitals that have partnerships with the not-for-profit system.
Officials with Ochsner and River Parishes said in a news release that the move will support “regional coordination of care.” And they said as more volumes shift toward the outpatient setting, maintaining the small hospital's inpatient services was becoming unsustainable. LifePoint does not report financial results for specific hospitals. According to the American Hospital Directory, which compiles hospital financial data based on Medicare cost reports, River Parishes lost more than $4.9 million last year.
“River Parishes has experienced many challenges in the changing healthcare environment, including reductions in reimbursement and significant declines in patient utilization,” River Parishes CEO Alan Daugherty said in a news release. “We are pleased that, as part of Ochsner, River Parishes will continue to provide the most essential services … allowing patients to continue to receive the care they need close to home.”
LifePoint spokeswoman Diane Huggins said in a statement that the company “is always open to exploring options that are in the best interest of the communities we serve.” LifePoint considers a sale “when a community is better served by another partner that can ensure the delivery of essential, high-quality healthcare services to people in the community.”
The Brentwood, Tenn.-based hospital operator will still own four hospitals in Louisiana.
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