Ochsner, LHC launch home health alliance

• By TED GRIGGS
• Advocate business writer
• Published: Jan 9, 2009 - Page: 1D - UPDATED: 12:05 a.m.

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Lafayette-based LHC Group Inc., one of the country’s largest home nursing companies, and Ochsner Health System have inked a joint-venture involving five home health agencies in south Louisiana.

The partnership also opens the door to future expansions under the Ochsner Home Health brand, said Warner Thomas, president and chief operating officer of Ochsner Health System.

“I think we definitely see ourselves going into other markets together. I think you’ll see some of that expansion in 2009,” Thomas said.

Under the deal announced Thursday, LHC Group will buy 75 percent of Ochsner’s two home health agencies, in Kenner and Raceland. Those agencies had $8.5 million in revenue for the past 12 months, LHC’s filing with the Securities and Exchange Commission shows.

Ochsner will buy 25 percent of three LHC agencies, in Houma, Lutcher and Hammond. Those agencies had revenue of $4 million for the last 12 months, the SEC filing shows.

The agencies are expected to operate under the Ochnser name, Thomas said.

The financial terms of the deal were not disclosed.

The deal is set to close Feb. 1, and more than 100 Ochsner Home Health employees will become LHC workers the same day.

Eric Elliott, LHC vice president of investor relations, said the deal will definitely add revenue and could slightly increase 2009 earnings.

LHC will have a better handle on that after the deal closes, he said.

“The two (Ochsner) agencies, they have great top line. They’re bringing the patients in, but there’s a lot of room for margin improvement,” Elliott said. “All five of the agencies have room for margin improvement.”

Thomas said the partnership with LHC provides two big advantages for Ochsner.

First, it broadens Ochsner’s geographic coverage, he said. The joint venture makes it easier for the hospital, when it discharges patients, to coordinate care with a home health agency.