Optum’s Key Strategies for Successful Home-Based Care Deals
TL/DR –
Optum Health, a subsidiary of UnitedHealth Group, is expanding its home-based care infrastructure and value-based service delivery with large-scale acquisitions such as the recent purchases of Amedisys and LHC Group. This strategy, aimed at slashing healthcare spending and preventing high-acuity admissions, is a core part of the company’s overall growth strategy. UnitedHealth Group, which operates the largest Medicare Advantage plan in the U.S, reported Q3 2022 revenue of $92.4 billion, with $56.7 billion attributed to Optum.
Optum Health Extends its Reach in Home-Based Care and Value-Based Services
Optum Health is executing a strategic growth plan in the home-based care sector through key acquisitions, with the intent to increase value-based care and widen its clinical capabilities. The company, a subsidiary of UnitedHealth Group (NYSE: UNH), has recently undertaken significant investments, including the $3.3 billion all-cash procurement of Amedisys, and the earlier purchase of LHC Group for $5.4 billion.
These acquisitions underscore the UnitedHealth Group’s commitment to expand its value-based care model, as stated by CEO Andrew Witty. By streamlining health care systems and services, Optum aims to address large-scale health care issues and improve overall patient care.
Optum is pivotal to UnitedHealth’s strategy for growing home-based care services and expanding value-based service delivery. The ambition is to reduce health care expenditure by encouraging patients to choose lower-cost home settings, thereby preventing unnecessary high-acuity admissions. This initiative involves further developing and scaling up their medical, behavioral, home health, and palliative care services.
In addition to Amedisys and LHC Group, Optum has invested in other high-profile acquisitions like health care tech firm Change Healthcare, as part of its strategic expansion. According to Witty, these investments have allowed the company to enhance its capabilities and make a significant impact on a large portion of the system.
Impact of UnitedHealth Group’s Expanding Operations
As a dominant entity in the health care sector, UnitedHealth employs over 450,000 personnel across various business lines, including about 135,000 in Optum, which serves over 103 million patients nationwide. Furthermore, the company is the leading operator of Medicare Advantage plans in the country.
During Q3 2023, UnitedHealth recorded a revenue of $92.4 billion, marking a 14% increase from the previous year. Notably, Optum contributed $56.7 billion to this total, a significant 22% increase from the previous year.
In the quest to provide more comprehensive patient care, the company is making substantial investments in home-based care. This involves expanding home health, hospice, and palliative care offerings, as well as using care coordination and transitional care services to manage patients with chronic or serious illnesses.
Optum Health’s CEO, Dr. Amar Desai, noted that the company serves over 4 million people in fully accountable arrangements today, a number that is slated to touch nearly 5 million by next year. This will be achieved through intensified efforts in communities with existing Optum services, further integration of patient care, and expansion into new territories.
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