Tulane Medical Center sale getting closer?



Posted on October 10, 2011 at 6:13 PM

Updated Thursday, Oct 13 at 5:35 PM

Meg Farris / Medical Reporter

NEW ORLEANS - Discussions are getting closer, which could mean in the near future, the largest heath care player in the area will get even bigger.

As Eyewitness News first reported a month ago, the majority owner of three Tulane hospitals, is in talks with Ochsner.

And another name was put on the table.

Medical Watch has learned that some members of the Tulane Medical Center Staff are now being told that there are two plans on the table to buy Tulane Medical Center.

One is a more serious offer from Ochsner and the other is from the state which provides health care and medical education through LSU.

Sources say the offer from Ochsner is the more serious one and the state-LSU offer was never fully developed.

About 82.5 percent of Tulane Medical Center and Lakeside-Tulane in Metairie are owned by Hospital Corporation of America, or HCA, a Nashville-based, for profit, public company. The rest of the downtown hospital, 17.5 percent, is owned by Tulane. HCA also fully owns Lakeview on the Northshore. But a spokesperson for HCA tells us that when it's time for a decision "governance is 50/50, and we would never make a decision without our partner."

Ochsner would not comment on camera but writes: "We continue to have conversations with many of the outstanding health care organizations in the state of Louisiana to evaluate potential partnerships and collaborations. We have no additional comment or update, but when we do, we will let you know."

Dr. Fred Cerise, the Vice President of Health Affairs with LSU, says he is unaware of any state or LSU partnership with Tulane and he says state money was only allocated for the new UMC teaching hospital.

"The joint legislative committee on the budget just recently gave the go ahead on construction (for the new UMC), were presented with a business plan that had revenues and sources included in that. That (buying HCA-Tulane) was not part of the discussion that the joint budget approved," said Dr. Cerise.

Hospitals that train doctors who are interns, residents and fellows, training to specialize in a certain field, are eligible for federal funding called graduate medical education funds. Tulane doctors are currently scheduled to work at the new state teaching hospital, UMC.

But some doctors at Ochsner have non-compete clauses, meaning they can not work at any local hospital that is not owned by Ochsner. Dr. Cerise says if Ochsner partners with Tulane that should not stop Tulane residents from training at UMC.

"We have an agreement that was signed several years ago that envisioned what the relationships would look like. And in that agreement, there's a commitment to 200 training slots for Tulane residents in the new facility and nothing has happened to change that," he explained.

Dr. Cerise also says the state has been aware for some time that different players in the hospital market could look at new partnerships, so it took that into consideration and made the business plan for the new teaching UMC hospital very conservative and sound, regardless of what changes happen in the health care market place.

"Well UMC did not count private practice patients of Tulane physicians in the financial analysis. The only patients that we counted were the existing patients that we're seeing in the hospital today and the new additional patients would be those that LSU were to have influence over," said Dr. Cerise.

Some in the Tulane health care industry tell us HCA as a publicly traded company, has not been an optimal partner since Tulane's goals and mission are that of an academic institution, teaching medical students, conducting research and training the next generation of doctors. Tulane has more than 500 medical residents in training, while also taking care of patients. The medical school started 1834 and is one of the oldest and most prestigious in the U.S.

Right now, Ochsner Health System has a partnership with the University of Queensland's in Australia, training students for a bachelor of medicine/bachelor of surgery degree.

Tulane would not comment on the record for this story, but did comment on an earlier story, which you can see here.