April 12, 2018
Vertical
integration is all the rage in healthcare these days, with Aetna, Cigna
and Humana making notable plays.
If
the proposed CVS-Aetna, Cigna-Express Scripts and Humana-Kindred deals
are cleared by regulators, the tie-ups will have to immediately face
UnitedHealth Group's Optum, which has been ahead of the curve for years
and built out a robust pharmacy benefit manager (PBM) business already along
with a care services unit, employing about 30,000 physicians and counting.
UnitedHealth
formed Optum by combining existing pharmacy and care delivery services within
the company in 2011. Michael Weissel, Group EVP at Optum, told Healthcare Dive
the company began by focusing on three core trends in the industry: data analytics,
value-based care and consumerism.
Since
then, the company has been on an acquisition spree to position itself as a
leader in integrated services.
"For
the longest time, the market assumed that they were building
the Optum business [to spin it out] and what is interesting in the
evolution of the industry is that that combination has now set a trend,"
Dave Windley, managing director at Jefferies, told Healthcare Dive.
"United
has now set the industry standard or trend ... to be more vertically integrated
and it seems less likely now that United would spin this out ... because
many of their competitors are now mimicking their strategy by trying to buy
into some of the same capabilities," he said.
Weissel
said Optum will continue to push on the three identified trends in the next
three to five years, with plans to invest heavily in machine learning, AI and
natural language processing.
The
question will be whether and how the company can keep its edge.
What
Optum is
Optum
is a company within UnitedHealth Group, a parent of UnitedHealthcare. Optum's
sister company UnitedHealthcare is perhaps more well known within the industry
and with consumers.
However, Optum,
a venture that encompasses data analytics, a PBM and doctors, has
been gradually building its clout at UnitedHealth Group.
In
2017, the unit accounted for 44% of UnitedHealth Group's profits.
In
2011, UnitedHealth Group brought together three existing service lines under
one master brand. Services are delivered through three main
businesses within a business within a business:
- OptumHealth - the care delivery and
ambulatory care capabilities of OptumCare, as well as the care management,
behavioral health, and consumer offerings of Optum;
- OptumInsight - the data and analytics,
technology services and health care operations business; and
- OptumRx - its pharmacy benefit service.
The
company focuses on five core capabilities, including data and
analytics, pharmacy care services, population health, healthcare
delivery and healthcare operations. Services include but are certainly not
limited to OptumLabs (research), OptumIQ (data analytics), Optum360
(revenue cycle management), OptumBank (health savings account) and
OptumCare (care delivery services).
The
Eden Prairie, MN-headquartered company has recently expanded its care delivery
services, with much of the growth coming from acquisitions. The past two years
have seen Optum expand its footprint into surgical care (Surgical Care
Affiliates), urgent care (MedExpress) and primary care (DaVita Medical Group).
Timeline of Optum
Acquisitions
- 1998
o UnitedHealth Group forms
health IT arm Ingenix (now OptumInsight) and Specialized Care Services (now
OptumHealth).
- 2002
o UnitedHealth Group charters
Exante Financial Services and Exante Bank, a health banking platform.
- 2005
o UnitedHealth buys
PacifiCare, a health plan which had a pharmacy benefit manager. The PBM is
separated within the company and named Prescription Solutions (now OptumRx).
·
Feb.
2008
o OptumCare begins with
Sierra Health Services, a multi-specialty clinic, acquisition.
·
July
2010
o Ingenix acquires Picis, a
health information company.
·
Aug.
2010
o Ingenix acquires Axolotl, a
health information exchange services company.
o Ingenix acquires Executive
Health Resources.
·
2011
o WellMed Medical Group, a
network of clinicians in Texas and Florida, joins Optum.
·
April
2011
o UnitedHealth Group
announces Optum master brand, bringing together pharmacy services, data &
analytics tools, and care delivery services under one roof.
·
Jan.
2013
o Partnering with Mayo
Clinic, Optum unveils OptumLabs, a health data initiative.
·
Oct.
2013
o Optum, partnering with
Dignity Health, launches Optum360, a revenue cycle management venture.
·
Feb.
2014
o Optum purchases a majority
stake in Audax Health Solutions, a patient engagement company. Audax is later
rebranded as Rally Health.
·
April
2015
o Optum acquires MedExpress,
an urgent care and preventative care services company.
·
July
2015
o Catamaran, a pharmacy
benefit manager, joins OptumRx.
·
Jan.
2017
o Optum acquires Surgical
Care Affiliates, an ambulatory surgery center and surgical hospital provider.
·
Aug.
2017
o Optum announces it will
acquire Advisory Board Company's healthcare business.
·
Dec.
2017
o Optum announces DaVita
Medical Group acquisition, expected to close in 2018.
It's a wide pool, but the strategy affords
UnitedHealth the opportunity to grab more revenue by expanding its market
presence. For example, the DaVita acquisition, which is still pending, allows
OptumCare to operate in 35 of 75 local care delivery markets the company has
targeted for development, Andrew Hayek, OptumHealth CEO, said on an earnings call in
January.
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