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LCMC Health signs deal to run New Orleans East Hospital

In addition to receiving the go-ahead Wednesday from the Jefferson Parish Council to operate West Jefferson Medical Center, LCMC Health formalized its agreement this week to take on the operation of the New Orleans East Hospital, now under construction.

In a cooperative endeavor agreement with the city signed Monday, LCMC — formerly Louisiana Children’s Medical Center — agreed to replace the Franciscan Missionaries of Our Lady Health System as the 80-bed hospital’s operator. The agreement runs for 15 years, with an option for two five-year renewals.

Mayor Mitch Landrieu called the agreement “another example of how public-private partnerships are helping us deliver on our promise to restore quality, full-service health care to the residents of New Orleans East.”

Construction on the hospital, which began in January 2013, has been accomplished through a partnership between the city and Franciscan Missionaries. The latter will continue to oversee the project until the hospital opens in the summer, the city said.

With the addition of the New Orleans East Hospital, the $1 billion LCMC Health will expand its portfolio to four medical centers. The company already operates Children’s Hospital, Touro Infirmary and Interim LSU Hospital. It also will run the $1.1 billion University Medical Center, now under construction in Mid-City, for the state.

The Jefferson Parish Council on Wednesday approved West Jefferson Medical Center’s choice of LCMC as that hospital’s new operator. That agreement is expected to take several months to finalize.

“As part of LCMC Health, New Orleans East Hospital will be part of a local, not-for-profit health care system with a commitment to community and dedication to improving the health of the patients we serve,” said Greg Feirn, LCMC president and chief operating officer, in a statement.

LCMC Health announced Wednesday that Feirn will take over as chief executive officer of the company May 1. He will replace Steve Worley, who will remain as senior adviser to the board of trustees until the end of 2015.

The hospital company’s deal does not require it to make lease payments to the city, nor will the city pay a management fee to the company. However, under the terms of the cooperative endeavor agreement, Children’s will put “up to $12 million” into the hospital, as necessary, to cover various operating costs.

A news release issued by Landrieu’s office Tuesday said that contribution would “substantially enhance the project.”

Although an urgent care center opened in New Orleans East in 2011, the area has been without a full-service hospital since Hurricane Katrina, when Pendleton Memorial Methodist Hospital flooded and closed.

The $130 million project includes the renovation of a portion of the former Methodist Hospital, a six-story, 133,640-square-foot building known as the East Tower. A 71,700-square-foot Patient Care Pavilion is being built from the ground up.

The hospital will offer primary, prenatal and pediatric care as well as behavioral health services. The city estimates it will serve more than 20,000 patients per year.

“Bringing the New Orleans East Hospital online is essential to providing a high quality of life for New Orleans residents across the city, specifically New Orleans East,” Health Department Director Charlotte Parent said in a statement.


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