Last week, UnitedHealth Group Inc. (UNH) announced that its Optum health services unit has entered into an agreement to manage Monarch HealthCare, an Irvine-based group of more than 2300 independent physicians.
UnitedHealth’s Optum division is a $27 billion information and technology-enabled health services business platform, serving the broad health care marketplace including care providers, plan sponsors, payers, life sciences companies and consumers. It consists of three sub divisions – OptumHealth, OptumInsight and Optum Rx. The company continues to develop and fortify its Optum businesses in health system areas with rising importance, such as comprehensive population health management, as well as modernization and better integration of healthcare delivery and financing.
UnitedHealth is aggressively positioning Optum to generate higher revenues. Optum had previously taken over the management arms of two smaller southern California groups, AppleCare Medical Group and Memorial HealthCare Independent. UnitedHealth recently appointed Larry Renfro as the Chief Executive Officer of Optum.
In the second quarter of 2011, Optum's total revenues increased 19% year over year to $7 billion, bringing the revenues for the first half of 2011 to $13.8 billion, up 20% from the comparable period last year. OptumRx’ revenue grew 12% year over year based on a 1.8 million increase in number of customers served, as well as greater mix in specialty drugs that carry much higher revenue per script. Besides, OptumHealth recorded a revenue growth of 46% year over year, while OptumInsight registered a revenue hike of 24% year over year. OptumInsight’s strong sales quarter emanated from the momentum in serving both payer and provider markets.
In total, the Optum results reflect an increasing business momentum, which is indicative of the traction that the capabilities are gaining in the market across care providers and payers, including the government, employers and other participants in the healthcare system.
Optum forms an important division of UnitedHealth’s operations. While UnitedHealthcare serves benefit customers, Optum serves the broader health marketplace including care providers and payers. UnitedHealthcare provides tremendous scale, size and market diversity that cannot be found elsewhere; and in turn, it allows Optum to quickly pilot, perfect, scale up and more rapidly commercialize new offerings across a broad client base and population. Thus, with the changing landscape of the health insurance industry, Optum service offerings will likely enable the company to emerge as a leader in the market place.
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