Analysis: Optum to empower its physicians via advanced analytics to improve care and coordinate referrals

• UnitedHealth Group is linking its massive network of physicians in its OptumHealth business  with insights it gleans from its data analytics engine business, according to a Healthcare Dive article.
• UnitedHealthcare group says its health services branch contracts with four out of every five U.S. hospitals, four out of five employers in the Fortune 500 and roughly three out of every four health plans, according to the article.
• OptumHealth employs or is affiliated with roughly 50,000 physicians across different sites of care, according to Healthcare Dive.

Healthcare Dive is reporting: “UnitedHealth Group plans to link its network of tens of thousands of physicians in its population health management and care delivery business, OptumHealth, with insights it gleans from its data analytics business, OptumInsights.”

“Patients and providers will be able to access health data in real time as part of this new ‘digital ecosystem,’” Optum CEO Andrew Witty, former chief at GlaxoSmithKline, said Thursday at the Wells Fargo Securities Healthcare Conference,” according to Healthcare Dive. “It will link all Optum care locations in a particular geography and rely on a risk-based, capitated-fee structure to align all participating players together, Witty said (emphasis added).”

“Currently, UnitedHealth has bandwidth in about a dozen U.S. cities to implement the program. It plans to partner with health systems where it doesn’t have a strong enough provider presence to advance value-based care and tackle chronic diseases,” the article continues.

“‘What we want to do is empower that network with the information and insights created from the information we have as an organization,’” Witty said. “If you can make that [provider] environment more competent, more insightful, more predictive, then you can make significant impacts on downstream costs.”

Optum’s nationwide reach

UnitedHealthcare group, according to the article, says its Optum healthcare services division contracts with:

• Four out of every five U.S. hospitals
• Four out of five employers in the Fortune 500
• Roughly three out of every four health plans

Also, OptumHealth employs or is affiliated with roughly 50,000 physicians across different sites of care.

“In regions where UnitedHealth has a smaller footprint, the healthcare giant plans on partnering with hospital systems on ways to jointly advance value-based care in that area,” said the Healthcare Dive piece.

Takeaway

We’ve known, or hypothesized, all along that Optum would eventually link its mass of employed and aligned physicians as well as its owned ambulatory surgery centers and urgent care centers to the data in its analytics engine to alter referral and practice patterns. Now we have confirmation that they’re doing it.

Once they go live with this, I expect to see referrals from Optum employed/aligned providers move from high-cost hospitals and specialists (both high cost from the perspective of per-unit cost and total cost of care) to lower-cost, more conservative practicing providers who have better outcomes.

Which cities are likely to first see Optum’s referral reach?

While it’s unclear which markets will be the first “dozen cities” to go live, I suspect they will have three characteristics:

1. UnitedHealthcare has significant market share/number of lives in Medicare Advantage and managed care organizations
2. They have many employed physicians
3. They have a large share of the Administrative Services Only/ERISA business in the market. I would expect that if you’re in the footprint for Monarch Healthcare in California, New West in Denver, USMD in Dallas-Fort Worth or WellMD in Florida, you’re likely to be on the leading edge of this. For those not partnered with one of these groups, I would look for opportunities to do so, particularly with those that are focused on reducing the total cost of care and improving patient outcomes. Otherwise, referrals will start going to competitors.