The Ochsner Health System’s recent acquisitions in the Baton Rouge market, including Louisiana Women’s Healthcare, Associates in Pediatric and Adolescent Medicine and the employment of popular pediatrician Dr. Shelley Martin, sent shock waves through the local health care community.
While Ochsner has made no secret in recent years of its intention to aggressively grow its small presence in Baton Rouge, the region is slow to embrace change.
The Ochsner moves were perceived and portrayed by some local health care executives as an invasion by a New Orleans-based health system that doesn’t “get” the local market and is disrupting long-standing affiliations among friendly competitors.
At least part of this narrative holds water. Ochsner is disrupting the local market.
But the reason the recent deals have everyone so rattled is less because of what Ochsner is doing than the way it is doing it: Not by building or buying new clinics and hospitals but by acquiring physicians and—this is the key—putting them and their tens of thousands of patients on Epic, the powerful and pricey electronic health records platform utilized around the country by major health systems and any smaller ones that can afford it.
It’s a strategy that assumes two things about the future of health care: 1) the current fee-for-service payer model will continue its shift toward one based on outcomes or value, in which doctors and hospitals are rewarded for keeping patients well, as opposed to just treating them when they’re sick, and 2) that big data will determine those outcomes, meaning access to data is the golden ticket.
Ochsner’s strategy is a long play that is more about the future than the present and it assumes the market will continue to shift from fee-for-service medicine to value- or outcome-based payments.
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