Optum inks deal with largest health system to date, SSM Health

By | October 8, 2021

Dive Brief:

  • Optum is partnering with nonprofit hospital operator SSM Health in a bid to leverage technology to expand access to healthcare in the Midwest, the latest in deals UnitedHealth’s health services business has made with major health systems to boost back-end functions.
  • Under the 10-year deal beginning in 2022, Optum will support some of SSM’s administrative functions, including inpatient care management, revenue cycle management and other digital needs, while working to co-develop a digital experience for better patient access. Additionally, UnitedHealth and SSM will jointly invest in community health programs working to advance health equity in the regions SSM serves in Illinois, Missouri, Oklahoma and Wisconsin.
  • SSM is the largest system Optum has partnered with so far. As part of the agreement, about 2,100 SSM employees across revenue cycle and hospital care management will become Optum employees in an outsourcing deal. UnitedHealth plans to discuss the new relationship further on its third-quarter earnings call on Thursday.

Dive Insight:

The operations of SSM Health, a 23-hospital integrated delivery system headquartered in St. Louis, have been on a consistent upward trajectory over the past several years prior to the coronavirus pandemic, ratings agencies said.

But SSM’s operating performance flagged last year during COVID-19, leading hospital executives to quickly build out their telehealth capabilities while curtailing spend in other non-emergent areas.

This new partnership with Optum is a continuation of SSM’s investment in its digital capabilities, and comes as more hospital operators look to outsource their revenue cycle and IT infrastructure to focus more on the clinical side of their businesses.

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Handing off its IT functions should also allow the $ 8.2 billion system to focus more on growing inpatient market share in its regions, as SSM is generally the second-leading provider in its markets, most of which are highly competitive, according to Fitch.

Optum has inked similar relationships with health systems over the past few years, including nonprofit giant Dignity Health (now operating as CommonSpirit), John Muir in California’s Bay Area, Bassett Healthcare Network in central New York and Boulder Community Health in Colorado.

The health services division, which is comprised of physician business OptumHealth, data analytics segment OptumInsight and pharmacy benefit manager OptumRx, is a key prong of Minnetonka, Minnesota-based UnitedHealth’s growth strategy following a historically profitable 2020.

On UnitedHealth’s second-quarter earnings call, CEO Andrew Witty told investors they should expect to see more deals between Optum and health systems in the future, following strong sales momentum.

Samantha Liss contributed reporting.

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