Ochsner Health, headquartered in New Orleans, Louisiana, has emerged as a leading healthcare provider in the United States, renowned for its innovative approach to patient care and its strong financial performance. This article will explore the key factors contributing to Ochsner’s success, focusing on its financial model and its ability to achieve better outcomes for patients with chronic diseases.

Ochsner Health has adopted a value-based care model, which focuses on improving patient outcomes while reducing healthcare costs. This model differs significantly from the traditional fee-for-service model, where healthcare providers are paid for each service rendered, regardless of the overall impact on patient health.

 with 40+ facilities across the Gulf South was able to lower healthcare costs by $56M across 500K of their patients.

Under the value-based care model, Ochsner is financially incentivized to keep patients healthy and out of the hospital.

Ochsner accomplished these financial savings while significantly improving patient care:

• Diabetes: 88% of Ochsner’s diabetic patients had their condition well-controlled, compared to the national average of 50-60%.
• Hypertension: 85% of Ochsner’s hypertensive patients had their blood pressure well-controlled, surpassing the national average of 20%.

Why this shift?

Unlike many US hospitals heavily reliant on high-reimbursing commercial insurance, a significant portion of Ochsner’s patient population is on lower-paying Medicare and Medicaid plans. This financial reality necessitated a departure from the reactive, fee-for-service model. To ensure financial sustainability and improve the health of their community, Ochsner proactively embraced value-based care. By focusing on preventative measures, reducing hospital readmissions, and improving overall patient outcomes, Ochsner demonstrates that financial constraints can be a powerful catalyst for innovation and improved healthcare delivery. This example underscores the fact that high employer reimbursements may inadvertently incentivize some hospitals to prioritize short-term gains over long-term patient well-being and population health.

What are the key insights in this model

• Quantifies improvement: Clearly states the significant improvements in patient outcomes.
• Provides context: Explains the underlying reason for Ochsner’s shift to value-based care – the financial realities of serving a population with a higher proportion of government-funded insurance.
• Highlights the broader implication: Suggests that high employer reimbursements may hinder proactive and patient-centered care in some hospital systems