UnitedHealth Group Adapts to Changing Health Care System Via Optum Investments

The U.S. health care system is in a state of flux, as the home gains prominence as a care setting and value-based payment builds momentum. Recent deals by UnitedHealth Group’s (NYSE: UNH) Optum subsidiary demonstrate a willingness to change with the times.

UnitedHealth Group is positioning Optum as a cornerstone of its growing home-based care infrastructure and expansion of value-based service delivery.

The Minnesota-based insurance colossus has deployed billions in capital to fortify Optum’s capabilities through a number of high-profile acquisitions, including the health care tech firm Change Healthcare and the home health and hospice provider LHC Group (NASDAQ: LHCG).


“The recent combination of Optum Insight and Change Healthcare reflects our accelerating efforts to help create more effective and simpler experiences for consumers, payers, and care providers while lowering costs across the health system,” UnitedHealth Group CEO Andrew Witty said during a third-quarter earnings call. “Another tenant of our consumer focus is meeting people where they are, which includes expanding our clinical capabilities to care for people more holistically in their homes.”

Through these efforts, UnitedHealth Group plans to slash its health care spending by helping patients remain in the lower-cost home setting and prevent avoidable high-acuity admissions. Thus, they are further developing and scaling their medical, behavioral, home health, and palliative care capabilities, according to Witty.

A federal court recently cleared the way for Optum to proceed with its planning Change Healthcare transaction after the U.S. Justice Department raised anti-trust questions. The $13 billion deal closed earlier this month.


Change is a health care technology, insights, and data platform. The marriage between Change and Optum’s Insight business is expected to inform and enhance the combined company’s clinical, administrative, and payment process, accelerating health care decision-making, improving outcomes, and cutting expenditures.

“Overall, Change brings a robust transaction network built on strong payer and provider connectivity,” UnitedHealth Group President and COO Dirk McMahon said in the earnings call. “Together, our focus areas include first, improving the quality of health care delivery by offering critical point-of-care insight aligned to evidence-based medical standards within the workflow of physicians, second, simplifying administration by fully automating claims transactions.”

The integration of Change and OptumInsight will also “reduce friction in the payment process” by providing patient benefits and payment obligations upfront, according to McMahon.

Beyond the tech investments, the forthcoming LHC Group deal represents a quantum leap for Optum’s penetration in the home setting, including hospice and palliative care.

Optum announced its $5.5 billion acquisition of LHC Group in April. The 30,000 employees of Lafayette, Louisiana-based home health and hospice provider deliver hospice, home health, home- and community-based services, and facility-based care to seniors in 37 states and the District of Columbia.

UnitedHealth Group has also made substantial investments to expand Optum’s behavioral health capabilities, including the more than $1 billion acquisition of Refresh Mental Health earlier this year.

“We know that at-home care settings — especially for people with mobility challenges and highly complex health needs — can improve outcomes, elevate patient experience and result in better care,” Witty said. ‘So we bring together teams with medical, behavioral, and palliative experience in addition to our home infusion capabilities of OptumRx. By doing so, we help patients and their families keep multiple chronic conditions in check while significantly reducing the need for care in acute and post-acute settings — really positive for them.”’

These factors have also been really positive for UnitedHealth Group. In addition to an influx of new insurance beneficiaries, Optum was a prime mover in the company’s third-quarter revenue growth.

UnitedHealth Group’s third quarter 2022 revenues reached $80.9 billion, up $8.6 billion (12%) year-over-year, spurred by double-digit growth at both Optum and UnitedHealthcare, the parent company’s insurance arm. 

For Optum in particular, third-quarter revenues rose 17% to $46.6 billion year-over-year, driven by growth in value-based care arrangements and continued expansion of care delivery platforms. These incuded in-home, clinic-based, ambulatory surgery, behavioral, and digital health services.

Further expansion through a diversified range of acquisitions is likely to continue, according to Witty.

“In terms of our ramp-up of capital deployment, we have very substantial continued capacity. And obviously, the marketplace is getting interested in around that space,” Witty said. “The pipeline of opportunities is probably as diverse as we’ve ever seen across a number of key growth platforms.”

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