Optum: The $101 Billion Division of United Health Group Explained

Summary

Dr. Eric Bricker's 'Healthcare Z' video discusses Optum, a major subsidiary of United Health Group, contributing nearly half of its 226 billion dollars in revenue and earnings. Optum is a tech-enabled health services company with diverse offerings, including the Advisory Board Company for hospital consulting, Optum Analytics, HSA Bank, and the significant acquisition of Catamaran, forming OptumRx, a pharmacy benefit manager. The video highlights a pilot program with NYU Medical Center, emphasizing analytics to understand high-cost claimants and service referrals. It raises concerns about United Healthcare's dual role in advocating for companies while Optum increases hospital revenue.

Takeaways

• 🏥 Optum is a major subsidiary of UnitedHealth Group, accounting for nearly half of its revenue and earnings.
• 📈 In 2018, UnitedHealth Group's revenue was $226 billion, with Optum contributing $101 billion of that amount.
• 💰 Optum contributed $8 billion out of UnitedHealth Group's total earnings of $17 billion.
• 🔍 Optum is described as a tech-enabled health services company, as per UnitedHealth Group's annual report.
• 🛒 Optum owns various entities, including The Advisory Board Company, which it purchased for $1.3 billion.
• 🏥 The Advisory Board Company consults hospitals and has a revenue cycle management practice for over 400 hospitals and physician groups.
• 📊 Optum Analytics is part of the company's portfolio, focusing on data analysis for healthcare.
• 🏦 Optum also includes a banking division, with a significant Health Savings Account (HSA) bank.
• 💊 OptumRx is a key component of Optum, having acquired the PBM Catamaran for $12.8 billion in 2015.
• 🔬 Optum collaborates with institutions like NYU Medical Center on pilot programs involving analytics and tracking high-cost claimants.
• 🤔 The video raises concerns about the potential conflict of interest between UnitedHealthcare advocating for employers and employees while Optum is paid by hospitals to increase revenue.

Q & A

What is Optum and what is its relationship to United Health Group?

Optum is a major subsidiary of United Health Group, representing almost half of the group's business with a revenue of 101 billion dollars out of the group's total 226 billion in 2018.

How significant is Optum's contribution to United Health Group's earnings?

Optum contributes significantly to United Health Group's earnings, with 8 billion dollars out of the group's total earnings of 17 billion.

What does the term 'tech-enabled health services company' mean in the context of Optum?

A 'tech-enabled health services company' refers to Optum's use of technology to provide various health services, as stated in United Health Group's annual report.

What was the purpose of Optum's acquisition of The Advisory Board Company?

Optum acquired The Advisory Board Company to expand its services, particularly in consulting for hospitals and enhancing revenue cycle management for approximately 4,400 hospitals and physician groups.

What is revenue cycle management and how does Optum's Advisory Board practice it?

Revenue cycle management is the process of helping hospitals get paid more quickly and efficiently. Optum's Advisory Board Company assists in this through consulting and services for numerous hospitals and physician groups.

What is Optum Analytics and how does it fit into Optum's portfolio?

Optum Analytics is a part of Optum's suite of services that focuses on data analysis to support healthcare providers in making informed decisions and improving patient outcomes.

What is the significance of Optum's acquisition of the PBM Catamaran?

The acquisition of Catamaran for 12.8 billion dollars in 2015 significantly expanded Optum's presence in the pharmacy benefit management (PBM) sector, making OptumRx a major component of Optum's business.

What is the role of HSA Bank within Optum?

HSA Bank, a part of Optum, provides health savings accounts, which are tax-advantaged savings accounts designed to help consumers pay for qualified medical expenses.

Can you describe the pilot program between Optum and NYU Medical Center mentioned in the script?

The pilot program between Optum and NYU Medical Center focuses on analytics, tracking high-cost claimants within the NYU health system, understanding their medical conditions, and analyzing referral patterns for services both within and outside of NYU.

What potential conflict of interest is suggested by the speaker regarding United Healthcare and Optum?

The speaker suggests a potential conflict of interest where United Healthcare advocates for companies and their employees while Optum gets paid by hospitals to increase their revenue, which could be seen as similar to a tax preparation service working with the IRS.

What is the main point the speaker wants to convey in the video?

The main point of the video is to highlight the significant role of Optum within United Health Group and to bring attention to the potential conflict of interest in the company's dual roles in advocating for clients while also working with healthcare providers to increase revenue.