UnitedHealthcare pays Optum physicians 17% more than comparable non-Optum physicians, a November study published in Health Affairs found.
The study used CMS Payer Price Transparency data, analyzing 385,434 price observations across 21,458 physician practices in 28 U.S. metropolitan areas.
Here are 10 things to know:
1. According to the study, UHC pays Optum-owned physician practices 17% more than what its rival insurers pay Optum, relative to what they pay non-Optum practices. In markets where UHC has 25% or more market share, this relative difference surges to 61%.
2. UnitedHealth Group made $400 billion in 2024 revenue, of which Optum generated $253 billion. However, 60% of Optum’s revenue was from internal business with UHC, not external customers, highlighting massive intercompany transactions within the conglomerate.
3. The study raises concerns that UHC may inflate payments to Optum to meet ACA-mandated medical loss ratio thresholds, which is 80% to 85% of premiums spent on care, thereby reducing rebate obligations to customers and artificially meeting MLR requirements.
4. By paying Optum practices more and independent practices less, the study said UHC may create an uneven playing field that pressures rivals to sell to or join Optum, reducing market competition and physician independence.
5. Across all 14 high-volume CPT codes studied, UHC paid the highest average prices ($566), followed by Blue Cross Blue Shield ($514), Cigna ($457) and Aetna ($292). For a moderate-intensity office visit (CPT 99214), UHC paid $139, 20% more than Cigna ($116) and 62% more than Aetna ($86).
6. UHC’s pricing advantage for Optum is much larger in markets where it holds substantial market share, more than 25%. According to the study, this supports the hypothesis that vertical integration amplifies pricing power in less competitive local insurance markets.
7. Other insurers have similar vertical structures, including CVS Health, Elevance and Cigna, suggesting industrywide potential for similar intercompany pricing behavior that could obscure profits and weaken market competition.
8. As of July 17, UnitedHealth directly employs or contracts with more than 90,000 physicians, according to a new “Sunlight Report” by the Center for Health & Democracy, funded by Arnold Ventures. This accounts for about 10% of the entire U.S. physician workforce. As of late 2024, Optum’s subsidiaries include 423 ASCs, over 880 home health companies, and 335 administrative/support entities.
9. A study published in Health Affairs Scholar found that in 2023, Optum controlled 2.71% of the national primary care market by service volume, making it the largest payer-affiliated provider in this space.
10. Optum Health is rolling back parts of its rapid expansion to refocus on its core value-based care model after what executives described as a drift from the company’s original mission, according to an Oct. 29 earnings call from parent company UnitedHealth Group. Optum CEO Patrick Conway, MD, said the company’s strategy “strayed from the initial intent of the model,” resulting in an oversized provider network, operational inconsistencies and overreliance on less-aligned affiliated physicians.
“UnitedHealthcare pays Optum Health consistent with other providers in the market, which is essential for staying competitive. The study, funded by groups with known biases, cherry-picks data and is flat-out wrong,” UnitedHealth Group told Healthcare Dive.
Becker’s has reached out to Optum and will update this story if more information becomes available.
