Ochsner Health will pick up 7 more hospitals with new Rush Health Systems merger

Financial deal
Ochsner Health and Rush Health Systems, which had previously partnered in 2019, expect the team-up to bring new clinical services to Rush's patients and a higher minimum wage to its employees. (Getty/scyther5)

Southern health systems Ochsner Health and Rush Health Systems have announced plans for a merger they expect to be completed about halfway through 2022.

The deal follows a 2019 strategic partnership between the two nonprofit providers and comes hot on the heels of Louisiana-based Ochsner’s merger with Lafayette General Health, which closed in October 2020 and grew the system to 35 hospitals.

“We have recently worked with Ochsner on several initiatives, including the implementation of Epic, a best-in-class electronic medical records system, at our hospitals and clinics. Today’s news means that we are taking the next step in our partnership,” Larkin Kennedy, president and CEO of Rush Health Systems, said in a statement. “We are excited to join Ochsner Health and work with them to continue to improve quality and decrease costs while enhancing access to highly specialized care closer to home.”

Rush, which has seven hospitals and more than 30 clinics in eastern Mississippi and western Alabama, will be rebranded as Ochsner Rush Health should the merger receive regulatory approval.

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Existing medical staff will retain their privileges and continue to comprise both employed and independent physicians. Of note, the systems touted a $1.5 million investment to increase more than 400 employees’ wages to a new minimum of $12 per hour.

Joining up with the larger system will enable new clinical capabilities and other benefits for Rush’s patients, the systems added.

Specialty and subspecialty services will be expanded, they wrote, and Rush patients will become eligible to enroll in clinical trials for novel therapies conducted through Ochsner’s clinical research network. Rush will also receive access to Ochsner’s tech and digital investments, including telehealth expansions and remote monitoring.

The systems said existing Rush patients’ insurance plans will still be supported through the merger. They also floated the idea that their merger will drive greater care quality and affordability through larger-scale programs and sharing of best practices—traditionally a contentious viewpoint within the industry as more and more systems announce consolidation plans.

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“The challenges we currently face as healthcare providers are unprecedented. Through the recent COVID-19 pandemic, we have seen the benefits of working together. There is no doubt the future of healthcare is about collaboration,” Fred Duggan, M.D., chief medical officer of Rush Health Systems, said in a statement. “Employed physicians from both organizations along with independent, community physicians will have the opportunity to increase clinical collaboration, implement advanced, patient-centered technology and expand services in the region.”

Ochsner describes itself as the largest nonprofit integrated delivery system in the Gulf Coast region. It reported $4.5 billion in total revenue from owned and leased facilities for the 2020 fiscal year, which includes revenue from Lafayette General Health from the acquisition date in October to the end of the year.

Taking Lafayette’s full-year revenue and those of Ochsner managed operations, joint operating agreements and joint ventures into account brings the system’s aggregate total revenue for the year to about $7.1 billion, according to its annual financial disclosures.