In the past 12 years, our institution (Ochsner Health System) has undergone dramatic growth. Although some of this growth has occurred organically by increasing the market share of our pre-existing facilities and providers, much of this expansion has occurred as a result of partnerships with other healthcare institutions in our region and the acquisition of institutions in our geographic area. Overall, this strategy has been successful and has allowed us to maintain financial stability in an era of declining reimbursement, despite adverse changes in our payer mix and our economically challenged market.
Last year, Ochsner was approached by the governor of the state of Louisiana with the largest partnership in Ochsner’s history: taking over the management of the hospitals and physician practices of one of two medical schools affiliated with our state university system (Louisiana State University Shreveport). Although we have a partnership with an international university (the University of Queensland Medical School in Australia) for whom our flagship, tertiary care hospital serve as a clinical site (the “Ochsner Clinical School”) and have had graduate medical education programs (residencies and fellowships) for more than 60 years, we do not have experience managing a University type academic practice.
One of the critical elements to Ochsner’s success has been our multispecialty group practice model. Our group practice structure and physician leadership have created alignment between physicians and our administrative colleagues and facilitated the accomplishment of many of our goals (quality, safety, operational, and financial). The partnership between Ochsner and LSU Shreveport has progressed rapidly and will like be complete by the end of the second quarter of 2018. In order to reverse the negative financial and quality trends at LSU Shreveport, Ochsner’s management team will need to restructure and standardize physician compensation for the LSU Shreveport physicians, break down the silos inherent in the University clinical departmental format, and create alignment among administrative and clinical leaders and front line employees (including physicians). In addition, these goals must be accomplished with a physical distance of more than 300 miles and in a market where the major competitor (the Willis-Knighton Hospital system) has a majority of the market share. Finally, none of Ochsner’s previous partnerships has involved the management of a University based academic medial institution and the disparity in culture between the two organizations could threaten the success of the entire venture.