Optum (and M&A) boosts UNH's growth
UnitedHealth’s Optum Health arm is turbocharging the health care titan’s growth, and its executives on Thursday morning (not surprisingly) hinted that more M&A is coming.
Why it matters: With its emphasis on value-based care, Optum has long been known as an aggressive acquirer, but its buying spree has picked up as of late.
What they’re saying: “Overall, our pipeline of opportunities I actually think is probably as diverse as it's ever been and as deep as it’s ever been,” UnitedHealth CEO Andrew Witty told investors on its Q1 earnings call.
- Witty pointed to its acquisition of Refresh Mental Health (which Axios first reported it bought at a $1.2B value) as a perfect example: “It’s right into that value-based proposition in terms of how we believe we need to bring behavioral health management alongside medical management.”
- The CEO did not comment when asked about the chatter about the large acquisition it might be making in Texas. (As we reported previously, that’s Kelsey-Seybold, of course.)
Yes, and: Reflected by its $5.4B bet on LHC Group, M&A within Optum Health’s home and community platform is driving its value-based care push in a big way.
- This platform has already stitched together naviHealth and Landmark, and that, Witty says, “will over time align with LHC when it joins into the organization built on our original Optima Home product…. it's positioning us very well to, for example, serve the D-SNP population in a way, which historically would not have been possible.”
By the numbers: Optum Health’s top line in Q1 grew 18.9% year-over-year, to $43.3 billion, while earnings grew 19.8% to $3.2 billion.
- Optum Health now expects to serve 600,000 new patients under value-based care arrangements in 2022, up from its initial outlook of 500,000.
- Speaking to the VBC runway, Brian Thompson, CEO of UnitedHealthcare, added: “It's been about geographic expansion historically. Now it's much more than that. We've moved into duals, it's about complex care, it's about home. So, the breadth and scale is really at the core of it.”
- The company, whose revenue jumped 14% to over $80 billion, also raised its full-year earnings outlook, with Optum, again, a big driver.
What we’re hearing: More physician deals are coming. Stay tuned, and write to us with any tips.
What we're wondering: Will we be writing about all of Optum's divestitures in a few years?! A UnitedHealth breakup?!