April 9, 2018, 6:00 AM
CDT
Insurer has been snapping
up major physician groups since 2008
A series of deals helps
United outrun its rivals -- and Amazon
Disruptors
are circling the health-care industry. UnitedHealth Group Inc.,
the biggest U.S. health insurer, has built an army of tens of thousands of
physicians to fend off invaders.
Health
care in the U.S. has been plunged into a high-speed reconfiguration that could
redraw longstanding relationships between patients, doctors, drugmakers and
insurers. Outsiders such as Amazon.com Inc. and Walmart Inc. are looking for
ways to shake up the business.
For now,
UnitedHealth remains the colossus astride it
all. The insurance giant has spent the past decade steadily adding
physicians to its ranks, fortifying itself against competing insurers as well
as hospitals who are buying up physicians. Once the physician groups it bought from
DaVita Inc. are fully under its wing later this year, UnitedHealth’s OptumCare
unit will have one of the largest collections of doctors in the U.S.
UnitedHealth
is betting that controlling many doctors can provide patients better care at a
lower cost, and steer them away from expensive hospital stays. Bringing more
doctors in-house provides a buffer against rivals and places an imposing moat
in the path of upstarts.
“This is
obviously scaring the crap out of hospitals in many markets,” said Chas Roades,
chief executive officer of Gist Healthcare, a consulting firm.
Arms Race
Hospitals,
in the midst of a wave of consolidation, have also been buying doctor
practices. About 42 percent of physicians worked for hospitals by mid-2016, up
from about 26 percent four years earlier, according to a studyby Avalere Health. Researchers have found that when
hospitals buy doctor groups, it can raise the cost of
care.
Acquiring
doctors of their own gives insurers a counterweight as hospitals bulk up. CVS
Health Corp.’s $68 billion acquisition of Aetna Inc. is driven partly by a
desire to provide more care in
the pharmacy chain’s stores and keep customers out of the hospital.
OptumCare
has about 30,000 employed and affiliated physicians, while Davita Medical Group
has 17,000 physicians and other care providers. HCA Healthcare Inc.,
the biggest for-profit U.S. hospital system, has about 37,000 doctors, while
hospital-and-insurance conglomerate Kaiser Permanente has 22,000.
“We’re in
an arms race with hospital systems,” said John Gorman, who runs consulting firm
Gorman Health Group and works with insurers. “The goal is to better control the
means of production in their key markets.”
Conversely,
many hospitals that have tried to run insurers have faltered, with systems including New York’s Northwell Health
closing down coverage ventures.
UnitedHealth,
which insures almost 50 million people and runs a large pharmacy-benefits
manager and other businesses, says its doctors serve more than 100 other
insurers, and that it has no plans to shut anyone out. The company says it has
ambitions for OptumCare to reach 75 markets, from about 30 now, including in
California, Florida, New York, and Texas.
“We have
been slowly, steadily, methodically aligning and partnering with phenomenal
medical groups who choose to join us,” said Andrew Hayek, who oversees the care
delivery operation at UnitedHealth. “The shift towards value-based care and
enabling medical groups to make that transition to value-based care is an
important trend.”
UnitedHealth
closely guards information about OptumCare. While a list of OptumCare groups is
available online, the company won’t say which markets it operates in, how many
doctors it employs, or how much of its business comes from UnitedHealth’s
insurance customers.
Seizing Advantage
A review
of publicly available plan information shows UnitedHealth is in some cases
nudging insurance customers toward its doctors. New West Physicians, a group of
about 120 doctors and care providers in the Denver area it bought last year, is
a favored practice in a plan with limited physician options for
UnitedHealth’s commercial customers. Seeing doctors in the group can come with
out-of-pocket expenses that are 20 percent to 30 percent less than treatment
elsewhere, for some customers.
In other
locations, UnitedHealth sells Medicare Advantage plans for seniors that
offer lower costs to see OptumCare doctors, such as those in
the company’s WellMed group. Hayek says OptumCare groups have similar
arrangements with other insurers and the goal is to have them work with more.
Adding
more doctors could bolster UnitedHealth’s position as the top provider of
Medicare Advantage plans, by improving quality ratings that influence how much
insurers are paid by the government, said Gorman, the consultant.
There’s
currently little geographic overlap between UnitedHealth’s Medicare Advantage
membership and OptumCare’s practices, according to an analysis by Tory Wolff, managing director of consulting
firm Recon Strategy. But streamlining care in places where the company has both
doctors and insurance customers can give the company an edge even if it makes its doctors
available to everyone, Wolff said.
Nevada Roots
UnitedHealth
first entered the care business in a big way in 2008, when
it bought Nevada insurer Sierra Health Services and its then 250-doctorSouthwest
Medical Associates. The company saw how much the captive medical group could
improve patients’ experience while delivering care at a lower cost, Hayek said.
Over the
next few years, UnitedHealth went on a nationwide shopping spree, adding
thousands of doctors through at least a dozen large deals. It bought Monarch
HealthCare, which manages 2,500 doctors south of Los Angeles, in 2011. The same
year, it bought WellMed and its 14,000 doctor offices in Texas and Florida. In
some cases it buys companies that oversee large groups of affiliated doctors,
and in others it directly employs the physicians.
From
there, the company continued to diversify, adding urgent-care chain MedExpress
for $1.5 billion in 2015 and Surgical Care Affiliates, which runs outpatient
surgery centers, for $2.3 billion last year. In December, it agreed to pay $4.9
billion for DaVita Medical Group. That deal is expected to close this year,
according to DaVita.
UnitedHealth
now has about 230 MedExpress urgent-care sites, more than 200 ambulatory
surgery centers and surgery hospitals, and 30,000 doctors, a figure that
includes physicians who are employed by Optum units, or who partner or contract
with the firm.
“The
smartest participants in the system are the ones who are going to be able to
provide quality care at the lowest cost setting,” said Ken Marlow, an attorney
who leads the health-care department at the law firm Waller Lansden Dortch
& Davis LLP and works on hospital deals. “Whoever gets there first, and
whoever is able to do that, I think will be the winner.”
Here’s a
list of OptumCare groups based on public records and reports, and information
from UnitedHealth:
|
Group
|
Year
Acquired
|
Location
|
|
Southwest Medical
|
2008
|
Nevada
|
|
AppleCare
|
2010
|
Los
Angeles and Orange County, California
|
|
Memorial Healthcare
|
2011
|
California
|
|
Monarch HealthCare
|
2011
|
Long
Beach and Orange County, California
|
|
WellMed
|
2011
|
Texas,
Florida
|
|
ProHEALTH Care
|
2014
(approval)
|
New
York
|
|
ProHealth Physicians
|
2015
|
Connecticut
|
|
MedExpress Urgent
Care
|
2015
|
Multistate
|
|
Riverside Medical
Group
|
2016
|
New
Jersey
|
|
USMD Health System
|
2016
|
Dallas/Fort
Worth, Texas
|
|
New West Physicians
|
2017
|
Denver
|
|
American Health
Network
|
2017
|
Indiana,
Ohio
|
|
Surgical Care
Affiliates
|
2017
|
Multistate
|
|
DaVita Medical Group
|
2017
(announced)
|
Multistate
|
|
Reliant Medical
Group
|
2018
|
Massachusetts
|
|
NAMM California
|
California
|
|
|
LifePrint Health
(Now OptumCare Network of Arizona)
|
Started
by UnitedHealth
|
Arizona
|
|
OptumCare Network of
Utah
|
Started
by UnitedHealth
|
Utah
|
No comments:
Post a Comment