Ochsner Health To Accelerate '65 Plus' Elder Care Clinics Expansion With Novant Deal
Ochsner Health announced Thursday that it is partnering with Novant Health, a health care provider based in Winston-Salem, North Carolina, to accelerate the expansion of its "65 Plus" brand of clinics for people 65 and older.
Ochsner opened its new clinics in May 2022 and is currently building three more. 65 Plus clinics are members of eligible Medicare Advantage plans and offer both primary care and a variety of health services, including nutrition education, fitness training, mental health counseling and social events.
Ochsner promised longer visits from primary care physicians as well as additional facilities and services, marketed to prospective patients as alternatives to existing primary care programs.
The first 65 Plus location opened last year in Covington north of US 190, a 10,200-square-foot facility with 11 exam rooms, a fitness center and a variety of medical and wellness services.
Ochsner is also working on a $2.8 million conversion of Gordon's former home decor store at Metro Magnolia Mall into a 19,500-square-foot clinic.
In September, Ochsner opened a $3.15 million, 12,000-square-foot 65-plus facility in the Baton Rouge area.
The first 65 Plus overseas facility in Pensacola, Florida opened in July 2020 and will be part of a new partnership with Novant. Ochsner CEO Peter November said the two partners have not yet decided which areas their transaction will cover and how many facilities they intend to build. In general, they agreed that the joint effort should focus on "the Southeast" but did not include Louisiana.
Both Ochsner and Novant operate as not-for-profit health care plans, meaning they are funded primarily by bond debt rather than equity, and receive tax breaks in exchange for providing a certain amount of charitable services.
Oxner's total operating revenue was $5.9 billion in 2021, the latest year for which data is available. Novant's total operating income was approximately $7.4 billion.
Take it aside
The partnership's strategy is to capture more of the senior care market, which is growing as the U.S. population ages, Ochsner said in a press release announcing the deal.
Studies show that by 2020, 17% of the population, or more than 1 in 6 people, will be over 65. This number is expected to increase significantly by 2040, when this age group is expected to reach 22. "This rapid growth creates new challenges and opportunities for both health care systems and taxpayers," Ochsner said.
Ochsner said he is looking for other similar partnerships and "forward-looking joint investments" with Novant as the U.S. healthcare market consolidates and moves toward digital services.
Market consolidation
While Ochsner and Novant dominate their market, they are surpassed by US health care companies such as Kaiser Permanente, which had revenues of more than $95 billion last year, or HCA Healthcare, which had more than $60 billion.
Ochsner and Novant have nearly $20 billion in assets, meaning they have more power to expand the 65 Plus network than either of them could build alone.
Hadar, on the other hand, said that he did not have the financial capacity to focus on expanding the reach of the community.
"We see a future with value-based care and wanting people to stay healthy and at home with their families," she said.
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