With new two affiliations, Ochsner Health has solidified its clinically integrated network in the most populous parish (East Baton Rouge) and built a beachhead in the one part of the state where it lacked a partner (the northeast). The two new partners are General Health System in Baton Rouge (announced in late March) and Glenwood Regional Medical Center in Monroe (announced in early April).
These affiliations have a several implications:
- Ochsner Health Network is now viably state-wide. Its affiliates are directly present in 11 of the most populous 15 parishes in the state and the remaining 4 (Livingston, Tangipahoa, Bossier and Ascension) fall easily within the service areas of these affiliates
- Competitively, the moves strengthen Ochsner’s position relative to the Franciscan Missionaries of Our Lady (FMOL) system which has leading bed share in both Baton Rouge (810 beds) and the Monroe area (550 beds)
- Ochsner has included a major for-profit player among its partners. Glenwood Regional is owned by IASIS, a major hospital chain owned by TPG and which recently filed for an IPO. This is not the first time Ochsner has strategically partnered with for-profit enterprises: they have a joint venture with Adeptus to put free-standing ERs in New Orleans). Together, these moves suggest Ochsner is developing an ability to structure win-wins with well-capitalized, earning-minded players, potentially opening the door to more capital-intensive strategies in the future.
Roughly coincident with the formation of these alliances, Ochsner announced the new leadership team for Ochsner Health Network. The president is the former chief medical officer at BCBSLA (which currently provides health coverage for state employees) and one of the vice presidents was assistant commissioner in the state administration with oversight of the state employee health plan. They should be well equipped to argue its value relative to health plan networks to the state government: can direct contracting discussions be far off?