LCMC Health finalizes Tulane University hospital purchases with regulator's blessing

Updated Jan. 3

Louisiana regulators have signed off on nonprofit system LCMC Health's acquisition of three Tulane University hospitals from HCA Healthcare, allowing the organizations to finalize the pending deal. 

The purchase was first announced in October and includes Tulane Medical Center, Lakeview Regional Medical Center and Tulane Lakeside Hospital. It was recently approved by the Louisiana Department of Justice, per the systems' announcement.

The integration of Tulane University's facilities with its new parent system will proceed across the next 12 to 24 months, according to the organizations. Operations will continue as normal during that time and all employees will continue to have jobs with LCMC.

"The shared vision between LCMC Health and Tulane University to provide unparalleled patient care and medical research advancements in Southeast Louisiana made this partnership a natural fit," LCMC Health CEO Greg Feirn said in the announcement. "As we integrate our operations, we are able to make locally-based decisions that best serve the comprehensive and specialty care needs of patients in our region."

The deal reportedly comes with a $150 million price tag and, according to LCMC, will be accompanied by a $220 million initial capital investment into the hospitals. The nonprofit system said it plans to transition “the majority of services” at the 235-bed Tulane Medical Center over to LCMC’s East Jefferson General Hospital and University Medical Center New Orleans over the 12- to 24-month period.

The state regulator signed off on the deal despite opposition from a major nurses' union, which warned of "unrestrained leverage over patients and healthcare workers" with HCA's exit from the New Orleans market.

Updated Oct. 31

Louisiana-based nonprofit system LCMC Health's bid to purchase three Tulane University hospitals could yield a duopoly in the New Orleans area and should be blocked by state regulators, National Nurses United (NNU) argued Friday.

The nurses' union penned a letter to Louisiana Attorney General Jeff Landry noting that the deal would increase LCMC's local market share to 55% and "warrants the strictest scrutiny by the Louisiana Department of Health."

LCMC's deal would include Tulane Medical Center, Lakeview Regional Medical Center and Tulane Lakeside Hospital and reportedly run the nonprofit $150 million.

The three hospitals are currently majority owned by HCA Healthcare. The system's departure from the New Orleans market would give LCMC and competitor Ochsner Health "unrestrained leverage over patients and healthcare workers" as the two remaining major players.

"We fear this goes against the public interest, by leading to further consolidation, higher healthcare prices and cuts to vital services," NNU Southern Region Director Bradley Van Waus wrote to the attorney general (PDF). "If your office approves this deal, we ask for contract conditions requiring LCMC to maintain all facilities and services, along with incorporating RN and patient priorities into the final sale agreement."

The national union also called into question LCMC's plans to shift "the majority of services" away from Tulane Medical Center. NNU noted that the 235-bed hospital serves numerous low-income patients, performs specialized transplants and includes the state's only comprehensive stroke center.

LCMC and Tulane University had said in its announcement (see below) that it would be repurposing the Tulane Medical Center building and that the shift to other sites would increase access to comprehensive care in downtown New Orleans.

Still, NNU argued that the closure of Tulane Medical Center inpatient services and the market concentration together make it "clear" that the deal will not provide the price or access benefits necessary for LCMC to receive a certificate of public advantage.

“We cannot allow Louisianans to be at risk of reduced access to hospital care or even more prohibitive health care costs,” NNU President Ross. “We need a full and thorough review of the impacts of this increased consolidation of vital hospital services.”

LCMC and the university had said they expect the deal to be finalized either late this year or early next year pending regulatory review.

Oct. 11

LCMC Health plans to purchase three Tulane University hospitals from HCA Healthcare, according to a Monday release.

The deal for Tulane Medical Center, Lakeview Regional Medical Center and Tulane Lakeside Hospital will reportedly run LCMC $150 million.

The system also committed to a $220 million initial capital investment across its hospitals to support new equipment and facilities, competitive provider hiring and other efforts surrounding standards of care and patient experience.

“With this transformational partnership, we can build on our strong history of collaboration with our academic partners, Tulane University and Louisiana State University, to do more for our patients, communities and region together than would be possible as separate organizations,” LCMC Health CEO Greg Feirn said in the announcement. “By joining forces, we will increase access to comprehensive and specialty care across our region, ensuring all our patients and communities receive extraordinary care, right here at home.”

LCMC said it is awaiting a regulatory review by the Louisiana Department of Justice over the next three months. The system and the university said they expect the deal to be finalized either late this year or early next.

All employees of the three hospitals would keep their jobs during the transition, according to the announcement, and see “new and expanded opportunities for growth and advancement.” Other investments stand to add an estimated 2,300 jobs throughout New Orleans and Louisiana, the organizations said.

The proposed arrangement would have “the majority of services” at the 235-bed Tulane Medical Center transition to LCMC’s East Jefferson General Hospital and University Medical Center New Orleans over a 12- to 24-month period.

This shift would increase downtown New Orleans’ access to comprehensive care and build new specialty care, innovation and academic medicine hubs in the Orleans and Jefferson parishes, the organizations said.

Plans for a repurposed Tulane Medical Center building will complement Tulane’s ongoing effort to revitalize the Charity Hospital building, which has been closed since Hurricane Katrina in 2005. The sites would support new research space and programs, a nurse training program and other educational initiatives, according to the announcement.

“Together with LCMC Health, we can combine our strengths to expand world-class academic medicine in the greater New Orleans area,” Tulane University President Michael Fitts said in the announcement. “Academic medical centers provide the most complex and high-quality care and are the birthplace of new treatments and technologies. This partnership will help drive clinical, educational, and economic innovation and growth that improves the quality of life across our entire region.”

LCMC was established in 2009 and currently manages six hospitals across the New Orleans area. The newly announced deal would bring its total to nine.

HCA has been the majority owner of Tulane Medical Center since 1995 and added the university’s other two hospitals to its system in 2005 and 2017. It will have just one hospital remaining in Louisiana should the sale go through.

The large hospital chain has told investors time and again that it aims to expand the networks in its core markets while divesting from others. That approach has led to last year’s hospital selloffs in Georgia, trimmed down home care services, expansions in Florida and an attempted deal to acquire five Rocky Mountain area hospitals from Steward Health Care System.