A year after executives said Optum Health had drifted from its original value-based care model, the smaller business is producing much larger profits, according to UnitedHealth Group’s Oct. 13 earnings release and call.
Optum Health’s earnings from operations rose to $735 million in the third quarter, up from $41 million a year earlier. Its operating margin rose to 3.2% from 0.2%, or 2.6% on an adjusted basis. Revenue fell 10% year over year to $22.9 billion. UnitedHealth said the drop came from serving fewer value-based care patients in markets where Optum “lacked sufficient value-based care presence to sustain its clinicians.”
On the October 2025 call, Optum CEO Patrick Conway, MD, said the company’s strategy had “strayed from the initial intent of the model.” He pointed to an oversized provider network and too much reliance on less-aligned affiliated physicians. Optum then said it would narrow networks, exit some markets and PPO contracts covering about 200,000 lives, and expected value-based care membership to fall about 10% in 2026.
UnitedHealth raised its full-year 2026 adjusted EPS guidance to at least $20.50. Executives said they will give a fuller 2027 outlook before the end of the year.
Here are seven notes on where Optum’s finances stand now:
1. Optum overall: Revenue reached $66.9 billion in the third quarter. Operating earnings were $3.7 billion, a 5.6% margin. “Our major remediation work is largely complete, and it’s created a strong foundation for growth across Optum,” Dr. Conway said in an earnings call transcribed by Motley Fool.
2. Optum Health’s patient base: The unit served 92 million consumers, down from 93 million. Optum Health CEO Krista Nelson said in the call the business serves 20 million patients, and about 4 million of them are in fully accountable relationships.
3. Early operating markers: Dr. Conway said online self-scheduling is up 27% from last year and home health visits are up 10%. Referrals to behavioral health specialists placed in Optum primary care practices have doubled, and engagement is above 90%.
4. A softer fourth quarter: One analyst said UnitedHealth’s guidance appears to imply a “meaningfully negative” fourth quarter for Optum Health. Ms. Nelson said the drop reflects normal risk seasonality plus investments in clinician workflows, including AI-enabled care summaries, ambient documentation and scheduling tools. Executives did not say how much they will spend.
5. Margin target: Optum Health is aiming for operating margins of 6% to 8% by 2028. Ms. Nelson called that “a multiyear journey” and said 2027 will show “a strong pace” toward the range. The growth areas she named are professional capitation and shared savings arrangements, service lines such as home health, hospice and ASCs, and a new post-acute risk product built with a payer partner.
6. Optum Rx: Revenue reached $39.9 billion. Adjusted scripts fell to 393 million from 414 million, which UnitedHealth attributed to membership declines at UnitedHealthcare. For the first time, external, non-UnitedHealthcare members make up more than 50% of Optum Rx membership.
7. Optum Insight: Revenue rose 3% to $5.5 billion. Optum Insight CEO Sandeep Dadlani said in the call the unit is “continuing to rationalize existing products and contracts where they do not make sense” while it launches AI-first products. One of those, Optum Integrity One, automates claims coding. It went from two clients at the end of 2025 to 15 implemented today, with 24 more implementing.
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