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Ochsner to officially ink agreement to operate Louisiana safety-net hospitals

New Orleans-based Ochsner Health System reportedly reached a tentative agreement to assume operations of Louisiana’s safety-net hospitals in Monroe and Shreveport, according to The News Star.

Louisiana Democratic Gov. John Edwards will officially announce the partnership Tuesday, according to the report. The state, former hospital operator Shreveport-based BRF, Baton Rouge-based Louisiana State University Health Care Services and Ochsner will sign nonbinding letters of agreement to pursue permanent contract terms during Tuesday's announcement.

University Health Shreveport (La.) and University Health Conway in Monroe, La., are owned by Shreveport-based University Health System, the clinical affiliate of New Orleans-based LSU School of Medicine. In order for Ochsner to take over operations of both hospitals, LSU, the state, BRF and Ochsner must all agree on the proposed arrangement.

BRF will still maintain a role in the University Health System infrastructure for the two hospitals, but the organization's role will not be as prominent, according to the report.

BRF secured the contract to operate the two hospitals in 2013 as part of former Republican Gov. Bobby Jindal's plan to privatize the state's charity hospital system. However, the state and LSU accused BRF of being undercapitalized and inexperienced shortly after the institution received the contract.

In response, BRF contended the state funds it received to support the safety-net hospitals were considerably less than the funds allocated to a private partner the state allows to lease facilities in New Orleans, placing BRF in a less-than-ideal financial situation.

More articles on transactions and valuations:
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