Lafayette General Health and Ochsner Health announced Thursday the Louisiana systems have sealed their merger to create the Gulf South's largest health system, with 35 hospitals and more than 100 clinics.
Lafayette, La.-based Lafayette General Health and Jefferson, La.-based Ochsner signed a letter of intent to merge in September 2019, originally expecting to close the deal in spring 2020. Louisiana's attorney general gave his OK on Sept. 4. The system has 35 owned, managed and affiliated hospitals.
Lafayette General Health, which will now be known as Ochsner Lafayette General, has been on shaky financial footing in recent years. The system's CEO, David Callecod, told Modern Healthcare last year that joining Ochsner would add stability.
As Ochsner Lafayette General, Callecod said in a statement Thursday the system will be able to do more to enhance and expand clinical services needs of its community.
"Our patients can rest assured that our commitment to advancing health, wellness and quality of life in Acadiana remains the same," he said.
Ochsner rounded out 2019 with a 3.4% operating margin on almost $4 billion in revenue, up from a 3% margin in 2018. The system also posted $222 million in excess revenue over expenses, a more than 200% uptick over 2018's surplus.
The merger builds on an existing clinical affiliation the two systems have had since 2015.
As part of the merger, Ochsner has committed to investing $465 million over the next decade into expanding the region's healthcare access, technology and workforce opportunities, up from $365 million in the systems' original announcement.
That includes $94 million for upgrades to Ochsner Lafayette General Medical Center, including a new tower with six inpatient floors, expanded women's services, a new parking garage and more infusion chairs in its cancer center.
Ochsner has agreed to build a Center of Excellence facility to house expanded cancer services and neurosciences and to further develop digital health services in the region.
Ochsner will also invest more into graduate medical education, facility upgrades, increased retirement contributions, and a medical assistant training program.
Minimum wage across the merged health system will increase from $10 per hour to $12 per hour, effective immediately, the system announced.
"We are truly excited that such a strong organization like Lafayette General Health has joined the Ochsner family," Ochsner CEO Warner Thomas said in a statement. "They are the leader in Acadiana, and together we are combining our strengths to lead healthcare improvement and innovation in the Gulf South."