LCMC Health acquires three hospitals from HCA for $150 million
The system will be putting $220 million into its newly acquired hospitals with emphasis on provider recruitment and new equipment.
Photo: Mikolette/Getty Images
The Louisiana Department of Justice has given final approval to a deal in which LCMC Health has purchased three hospitals in Tulane, Louisiana, from HCA Healthcare for about $150 million. The New Orleans-based nonprofit now boasts nine hospitals after acquiring Tulane Medical Center, Lakeview Regional Medical Center and Tulane Lakeside Hospital from HCA.
As part of a partnership between LCMC and New Orleans-based Tulane University, the former will be putting $220 million into its newly acquired hospitals, focusing on new facilities and equipment, and on provider recruitment.
WHAT'S THE IMPACT?
The news was not greeted with universal acclaim. In October, before the deal was finalized, National Nurses United called on Louisiana Attorney General Jeff Landry to intervene in the deal, saying the consolidation would result in just two health systems in the New Orleans metropolitan area – which NNU said could potentially affect care quality.
In a letter to Landry, NNU said LCMC's acquisition "goes against the public interest, by leading to further consolidation, higher healthcare prices and cuts to vital services."
In the letter, NNU Southern Region Director Bradley Van Waus noted that LCMC's market share in the area would increase to 55%, warranting the "strictest scrutiny" by the Louisiana Department of Justice under the state's Certificate of Public Advantage (COPA) law, meant to guarantee agreements such as this one ensure healthcare is accessible, affordable and of high quality.
The Federal Trade Commission has warned that COPA laws often fail to provide adequate protections for communities faced with hospital mergers. In a 2022 study the FTC said, "The available evidence shows COPAs do not achieve the purported policy goals of reducing healthcare costs and improving quality. Instead, COPAs shield specific hospital transactions from vigorous antitrust enforcement, to the detriment of those very goals."
Nurses insisted that Louisiana live up to the intent of its COPA regulations, which state the Department of Justice "may not issue a certificate unless the department finds that the agreement is likely to result in lower healthcare costs or is likely to result in improved access to healthcare or higher quality healthcare without any undue increase in healthcare costs."
THE LARGER TREND
HCA Healthcare, meanwhile, announced last year that it would be building five new full-service hospitals in Texas to meet the state's growing population and need for healthcare services. The new facilities will complement the health system's already existing presence in several rapidly growing communities across Texas, HCA said.
The Nashville-based, for-profit health system has invested approximately $6.6 billion over the last five years, including other expansions currently in progress.
In June the FTC brought an administrative complaint and a lawsuit in federal court to block the proposed merger between HCA Healthcare and Steward Health Care System. The agency said the deal would eliminate the second- and fourth-largest healthcare systems in the Wasatch Front region, where approximately 80% of Utah's residents live.
HCA Healthcare announced a definitive agreement to acquire the operations of Steward Health Care's five Utah hospitals in September 2021. It also entered into an agreement to lease the related real estate from the owner following the closing. The hospitals were slated to become part of HCA Healthcare's Mountain Division, which includes hospitals in Utah, Idaho and Alaska.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
