The cameras flashed and applause rang out on Ochsner Health’s Jefferson Parish campus in late 2023.

Executives of Louisiana’s largest health care system, surrounded by business leaders, local politicians and medical staff, had gathered to celebrate what Ochsner Health CEO Pete November called an "unparalleled act of generosity” by Saints and Pelicans owner Gayle Benson to help fund a new, freestanding children’s hospital .

Fourteen months later and just a few miles across town, a similar celebration took place. During the run-up to the Super Bowl, officials with LCMC Health, Louisiana’s closest competitor to Ochsner, crowded onto a stage with Saints great Archie Manning, his son, Eli, and other members of the famed football family.

Balloons dropped onto a cheering crowd after the announcement that Children’s Hospital New Orleans, which has treated kids at its Uptown campus for 70 years, would be renamed Manning Family Children’s following a “transformational” financial gift.

The two nonprofit children’s hospitals now have dueling support from some of the biggest names in New Orleans. Both are spending hundreds of millions of dollars on new facilities. And despite the celebratory atmosphere at ribbon-cuttings and news conferences, leaders from the health systems acknowledge that a long-simmering rivalry is intensifying into an all-out competition for pediatric care.

LCMC leaders have bristled at Ochsner’s plans for a new, five-story stand-alone facility. They argue that there aren’t enough patients to support two local hospitals for kids, that Ochsner is only focused on high-margin pediatric specialties and that they should have partnered to serve Louisiana’s sickest children and attract patients from across the South with specialty care.

“Fragmentation and duplication dilute both institutions,” said Dr. Mark Kline, chief medical officer at Manning Family Children’s. “This is a small and shrinking market. My concern is that neither institution will achieve what it would achieve otherwise if they worked together.”

Ochsner executives say that LCMC is disregarding their long experience in pediatrics, arguing that the Gayle and Tom Benson Ochsner Children’s Hospital is an expansion of an existing children’s “hospital within a hospital” and that they are endeavoring to help more kids by creating a regional destination that LCMC had decades to try and build.

Dr. Vincent “Butch” Adolph, regional medical director at Ochsner Children’s, said competition will improve care.

“If we’re in a constant battle to see who can be the best children’s hospital, then the patients will benefit,” said Adolph. "The expectation is that if we build better programs, people will choose to come here."

Growing health care networks

The discord over pediatric care represents a new front in the escalating competition between the two health systems that have come to dominate health care in Greater New Orleans. How it plays out could have repercussions for families across Louisiana who increasingly turn to them for the most complex pediatric cases.

Ochsner and LCMC have expanded quickly over the past two decades. Under CEO Greg Feirn, LCMC, which in 2008 ran only a single children’s hospital, has grown to an eight-hospital system that employs more than 18,000 and operates the massive University Medical Center in New Orleans.

Led by former CEO Warner Thomas and now November, who took over as CEO in 2022, Ochsner owns or operates hospitals from Shreveport to the Mississippi Gulf Coast — with children's clinics in Jackson and Hattiesburg — employing roughly 40,000.

Though Ochsner is far larger regionally, LCMC is its only competitor in the New Orleans metro area. Every local hospital, except for the VA, is now owned or operated by one of the two systems. At some busy intersections, their clinics stand on opposite street corners like rival fast-food outlets.

Failed mergers

The rivalry between LCMC and Ochsner has been growing as the two providers vie to provide “cradle-to-grave” care to patients of all ages. But there has always been competition, even amid efforts to come together.

In the late 1970s, the two spent months negotiating a merger that would have brought the then-financially troubled Children’s under Ochsner control. But the deal fell apart because of disagreements over where the hospital would be located and whether there would be an open medical staff.

Doctors at Children’s felt so strongly against being bought out by Ochsner that they all walked out of a staff meeting when the idea was proposed, recalled Dr. Jay Goldsmith, a 79-year-old neonatologist who has worked at both hospitals and was involved in the talks.

In the early 1990s, the two tried again, according to Dr. Keith Perrin, a retired pediatrician, who had an independent practice for years and later worked for LCMC. But differences over location, control and money kept the two apart.

Since Katrina, the idea of closer collaboration around children’s care has occasionally been floated but never seriously pursued.

“We had all these opportunities and kept dropping the ball,” Goldsmith said.

Ever since, LCMC has branched out beyond pediatrics into total patient care, acquiring several acute-care hospitals, including Touro, New Orleans East Hospital and East Jefferson General, and has long-term deals to manage University Medical Center and West Jefferson Medical Center. Since 2023, they also have an agreement with Our Lady of the Lake to run their freestanding Children's Hospital in Baton Rouge.

For its part, Ochsner, which now has 46 hospitals across the Gulf South, has gotten serious about growing its pediatrics program, investing tens of millions of dollars, quadrupling the number of pediatricians on staff, opening new pediatric clinics around the state and hiring Dr. Benjamin Peeler, a nationally renowned pediatric heart surgeon, from Sanger/Levine Children's Hospital in Charlotte, North Carolina.

In interviews, Ochsner officials said the bigger move into pediatrics began in the early 2010s under Thomas, who identified a need for surgeons who could do pediatric heart transplants — a complicated, risky and high-margin procedure.

“We looked around and saw people were leaving Louisiana to get this care,” Adolph said. “It was undeniable, and we perceived that as a need we wanted to address.”

LCMC was aware of the gap in the market, according to Kline, who was not at Manning’s Children at the time, and says the decision not to do pediatric heart transplants was intentional because there are so few patients and Houston, just 350 miles away, has one of the best programs in the country.

“We don’t think it is mission critical or in the best interest of either program to try to compete for the very few heart transplant patients with the best program in the country,” Kline said.

LCMC hospital executive John Nickens, who served as CEO of Manning Family Children’s from 2018-2022 and is currently CEO at UMC, said he has tried to restart talks about collaborating, partnering and reducing duplication of services with Ochsner since they began to expand their pediatric offerings, but it hasn't gone anywhere.

“They’re not willing to have the conversation that I think is really best for kids,” said Nickens.

Ochsner’s leadership says past efforts to collaborate between the two systems are water under the bridge.

“Our focus is on doing as good a job as we can for as many patients as we can,” Adolph said. “We're not spending a lot of time thinking about what people down the street are doing.”

Competition and pediatric care

Competition in health care is typically considered good for patients, giving them more options and keeping costs in check, according to Ge Bai, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.

With children’s hospitals, it’s not always that simple. Generally, only the sickest children require hospitalization and their conditions typically require specialized care. Facilities that perform more liver transplants or heart surgeries, for instance, typically have better outcomes than those that do fewer, said Kevin Holloran, senior director of the U.S. Public Finance Group with Fitch Ratings, who has studied the financial challenges facing children's hospitals around the U.S.

“The best pediatric cardiac surgeon does 100 surgeries a year, say, not 10, so if you’re dealing with a small subset of a population — pediatric cardiology patients — you don’t want to spread them out,” Holloran said. “You want the same person doing all of them.”

For that reason, children’s hospitals around the country have traditionally “been like Switzerland,” serving as a neutral institution that partners with many health care organizations in a given market, Holloran said.

San Diego-based health care consultant Nate Kauffman said that dynamic has pushed some dueling children’s hospitals in other markets to come together in recent years. Atlanta’s two children’s hospitals merged in the late 1990s to form Children’s Healthcare of Atlanta, now one of the largest pediatric systems in the U.S. San Francisco’s UCSF Benioff and Oakland Children’s Hospital teamed up in 2014. Two children’s hospitals in Louisville, Kentucky merged in 2016 to form a combined hospital that has continued to expand.

“Most places have realized it only makes sense to have one children’s hospital,” Kauffman said. “It makes it easier to attract specialists and you don’t have dueling philanthropy.”

In cities that have retained two strong children's hospitals, at times it has been a struggle, experts say.

A rendering of the Gayle and Tom Benson Ochsner Children’s Hospital from Jefferson Highway.

In Baltimore, the University of Maryland and Johns Hopkins compete for pediatric cardiac surgery patients, according to Dr. Scott Krugman, senior associate dean at the George Washington Regional Medical Campus at LifeBridge and a clinical professor at George Washington University.

Over the past few years, both programs lost their surgeons because neither had enough patients to attract the best doctors.

“If you're a pediatric cardiac surgeon, you want to do a lot of cases, and you want to be doing pediatric cases,” Krugman said. “In Baltimore, there’s just not enough volume for both. So for months, we had nobody.”

Trading barbs

Ochsner officials disagree with the contention from LCMC that their new stand-alone hospital will dilute the market or lessen the quality of care.

Rob Woltermann, Ochsner's Southshore CEO, said their existing children’s hospital is “busting at the seams” and has had to turn patients away. Ochsner declined to provide specific numbers.

Woltermann also suggested that Ochsner may not have moved forward if Manning Children's had grown into a national center renowned for premier pediatric care like the children's hospitals in Cincinnati or Philadelphia.

"If we had a Cincinnati Children's here as long as we’ve had Children’s, I don't think we would necessarily need to have two facilities,” Woltermann said.

LCMC officials say they have created a regional destination for sick kids, pointing to the 40 specialists they hired in 2024. They say Ochsner specializes in a few “high-margin” specialties and doesn’t serve the breadth or depth of sick children Manning Children’s does.

“They’re a pediatric program, not a hospital,” said Manning Children’s CEO Lou Fragoso. “Just because you put 'children’s hospital' on a building doesn’t make you a children’s hospital.”