Christus Health and Ochsner Health System have agreed to create a joint venture to operate hospitals and physician practices in Lake Charles, La., near the Texas border.
Christus, a Catholic-sponsored hospital chain based in Irving, Texas, will contribute its 100-bed St. Patrick Hospital in Lake Charles to the venture, said Christus CEO Ernie Sadau in an interview Thursday.
It also will contribute Lake Area Medical Center, a 100-bed hospital in Lake Charles that Christus is buying from Community Health Systems. That deal is expected to close at the end of July.
Sadau said Christus is teaming with Ochsner because of the system's clinical programs and willingness to build patient access points in the market to add services and subspecialties, including neurosciences and fetal maternal medicine.
Under the deal, Christus will be the majority owner of the joint venture and continue to manage the hospitals in Lake Charles, while Ochsner will manage the physician practices there, Sadau said. Terms were not disclosed.
Working together, Sadau said, "we expect to expand the market and provide more services."
New Orleans-based Ochsner is Louisiana's largest health system with 29 owned and managed hospitals. It does not, however, have operations in the far western part of the state, where all six of Christus' Louisiana hospitals are located, Sadau said. Because there is no overlap, he said the systems don't expect antitrust issues to arise from the deal.
While this is the first announced joint venture by the systems, they have partnered over the past two years on telemedicine and clinical trials in their markets, Sadau said.
Christus has more than 60 hospitals and nearly 200 clinics and outpatient sites in the U.S., Mexico, Chile and Colombia.
Last year, the system posted operating income of $300 million on revenue of $4.14 billion, according to Modern Healthcare's data center.