Optum spent the last decade investing in significant growth, adding thousands of physicians to its network and purchasing ASC company Surgical Care Affiliates in 2017. Now the company is focusing more on its primary care network, data offerings and $115 billion pharmacy and medical care business line.
Optum, owned by UnitedHealth Group, has three divisions:
- Optum Health, the healthcare provider division which includes physician groups and ambulatory surgery centers
- Optum Insight, which houses the data analytics platforms designed to connect clinical, administrative and financial data
- Optum Rx, a pharmacy benefits and care services business
Each division has a unique growth strategy focused on the patient and provider experience.
Provider growth
Optum Health now has 60,000 employed or aligned physicians and partners with 100 payers. Optum as a whole now works with 80 percent of health plans and 90 percent of hospitals and 90 percent of Fortune 100 companies.
Wyatt Decker, CEO of Optum Health, said in the 2021 earnings call in January that Optum Health is still a growth platform and the company will make investments to more deeply penetrate established markets. He expects Optum Health to deliver 8 percent to 10 percent margins annually going forward.
"Our approach strengthens the critical provider-patient relationship by empowering our primary care physicians with the latest information, insights and best practices to help them efficiently coordinate all patient care, manage referrals and identify higher-quality, lower-cost options," the company said in its 2021 yearend highlights report.
ASCs certainly fit the high quality, low-cost care description, but Optum's executives fell shy of mentioning whether the company would focus on growth in that sector during the 2021 earnings call.
Optum is also expanding its virtual care capabilities, focused on chronic care patients, and its behavioral health services. The company said it needs to add physicians, clinicians and technology to support patient care in those areas. Optum said it has its sights set on providing more whole-person, value-based care, scaling in new markets and having the key data insights to do it better than anyone else.
Value-based care
Last year, Optum and UnitedHealth Group's health insurance business, UnitedHealthcare, worked together with external partners to grow in commercial and government payer markets, innovate and add 500,000 patients to their value-based contracts. Optum served 100 million patients, and 2 million of the patients were under fully accountable arrangements. Both companies also had a sharpened focus on the consumer experience.
"Taken together, these efforts helped us add more than $30 billion in revenue for the year, about $10 billion above our initial outlook," said Andrew Witty, CEO of UnitedHealth Group, during the earnings call, as transcribed by The Motley Fool. "And you should expect similar growth in the year ahead. We see an even greater demand for integration to bring together the fragmented pieces of the health system, to harness the tremendous innovation occurring in the marketplace, to help better align the incentives for providers, payers and consumers, and to organize the system around value."
Data and information
Optum Insights aims to continue growing by acquiring Change Healthcare, a healthcare data and technology company.
"The combination will advance our ability to create products and services that improve the delivery of healthcare and reduce the high costs and inefficiencies that plague the health system," Optum claimed on its fact sheet about the transaction. "We will share these innovations broadly to benefit those who engage with the health system today and well into the future."
The acquisition could make the episode of care more seamless for patients and reduce administrative burden for providers, as well as give payers a comprehensive view of the patient's health outcomes with the potential to reduce cost. But it could also give Optum and UnitedHealth Group an unfair advantage over competitors, the Justice Department argued in a lawsuit filed in February.
"Across Optum, we operate with the highest ethical standards in protecting confidential data and information of our clients and adhere to the safeguards we have had in place for more than a decade to ensure data is accessed and used only for permissible purposes," according to a statement on Optum's website responding to the Justice Department's lawsuit. "We will not be distracted by the DOJ's complaint and will continue to honorably serve our clients and consumers and those that engage in the health system."