Editor’s Note: This post was authored by Managing Principal Roxane Townsend, MD, and Senior Consultant Jeannine Hinton, LCSW, MHA.
HMA recently completed efforts to help the State of Louisiana and Louisiana State University (LSU) enter into a cooperative endeavor agreement with Ochsner LSU Health System of North Louisiana, a private nonprofit corporation.
In 2013, the State of Louisiana completed the consolidation and privatization of its 10-hospital system. Three hospitals were closed, and their services were absorbed by other private hospitals in the communities. One small, rural hospital remained with LSU. The other five safety-net hospitals, including the academic medical centers (AMC) in Shreveport and New Orleans, developed cooperative endeavor agreements with non-public entities. The LSU Health Shreveport AMC was transferred to a third party, the Biomedical Research Foundation (BRF), in a public-private partnership (PPP).
Over the next four years, challenges arose with the partnership. This resulted in the LSU Health Sciences Center – Shreveport (LSUHSC-S) using its financial reserves to cover ongoing operations. Uncertainty around funding led to faculty dissatisfaction and attrition. Recruiting students into the medical school, graduate programs, and allied health curricula became more challenging. The health sciences center was unable to grow programs, and the very public disputes between LSUHSC-S and the private partner began to negatively affect the school’s reputation.
HMA experts join efforts
HMA was engaged through the LSU Faculty Group Practice (FGP) in Shreveport in May 2017. The original scope of work outlined assistance in developing the infrastructure to operate the practice as an LSU affiliated 501(c)(3). The consultation included strategic planning for the health sciences center faculty group practice to improve productivity and quality while designing a new physician compensation model that supported value-based purchasing. HMA was also asked to help the health sciences center in relating to the original private partner. This included collaboration to improve processes at the hospital and clinics to meet quality of care and access expectations. The work also included establishing appropriate payment for physician services to the AMC.
HMA’s Roxane Townsend, MD was embedded into the leadership at LSUHSC-S in the interim role of vice chancellor for administration until a replacement was hired in September 2018. HMA’s Jeannine Hinton served as the interim executive director of the LSUHSC-S Faculty Group Practice.
A new agreement takes shape
Despite the efforts of LSUHSC-S, the Louisiana Governor’s Office and the LSU System, the partnership with BRF became untenable and a new private partner was sought. With the support of Governor John Bel Edwards, the Ochsner Health System (OHS) was identified as a willing partner to replace the BRF. The contract between LSUHSC-S and HMA was amended to allow HMA to take the lead in the negotiations with the Ochsner Health System.
Over more than a nine-month period, successful negotiations led to the formation of a joint venture between LSU and OHS, called the Ochsner LSU Health System (OLHS). The new partnership began operating on October 1.
To view the 20 documents that were negotiated to form the partnership, click here.