We got a tour of UnitedHealth's flashy new cancer center, and it reveals how the healthcare giant is taking a new approach to reshape the health system and lower costs
- UnitedHealth Group is best known for operating health-insurance plans, and it provides insurance to more than 50 million people.
- The company is rapidly expanding in the business of providing healthcare through its OptumCare unit, which now employs or works with more than 46,000 doctors.
- UnitedHealth is increasing the types of medical care it provides by expanding into specialties like cancer care.
- In October, Business Insider got a look at one of OptumCare's facilities that's focused on cancer treatment. Our tour reveals how the company is planning to dominate US healthcare.
- In an investor presentation, UnitedHealth CEO David Wichmann said that the company expected more than half of its 2020 earnings to come from Optum, the business arm of UnitedHealth that runs OptumCare, as well as a tech and consulting operation and a pharmacy benefits manager.
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Just off the Las Vegas Strip, across from a 7-Eleven and down the block from a strip mall, sits a new cancer center.
The center, which opened in December 2018, is run by UnitedHealth Group, a company better known for operating health plans through its insurance arm, UnitedHealthcare.
Called OptumCare Cancer Center, the 55,000-square-foot facility houses imaging equipment, exam rooms, a library of resources, and a café. Notably, it isn't solely available to those with UnitedHealthcare as their insurer.
The cancer center is an early sign of the specialty healthcare work that UnitedHealth's Optum business plans to grow into, as it expands beyond primary care and urgent care. More centers are in the works, focused on specialties like orthopedics, lung function, and allergies, as the $265 billion healthcare giant expands its grip on the US healthcare system in the name of lowering costs and providing better care.
"Oncology is just the first step as we connect our capabilities to better manage chronic care," Optum CEO Andrew Witty said in a December presentation to investors. "Next year, you'll see us launch advanced care models in other high-cost areas, including cardiology."
Based in Minnetonka, Minnesota, UnitedHealth is a massive business. It owns the biggest US health insurer, with about 50 million members. Its Optum unit, which includes a technology and consulting arm, a prescription-drug business, and a big division that provides medical care, is growing faster than the health insurer. In the investor presentation, UnitedHealth CEO David Wichmann said the company expected more than half of its 2020 earnings to come from Optum.
'We are reinventing healthcare delivery'
In particular, the company has big plans for its massive medical care business. Already, the company's OptumCare business employs or works with more than 46,000 doctors, from surgeons to primary-care providers. UnitedHealth wants OptumCare to reach $100 billion a year in revenue by 2028. OptumCare made about $16 billion in revenue in 2018, and it expanded significantly this year with the acquisition of DaVita Medical Group.
"We are reinventing healthcare delivery through OptumCare," Wichmann said.
It's part of a push by healthcare companies to gain more control over how healthcare gets paid for and provided to patients. In 2018, CVS Health closed its $70 billion deal with the health insurer Aetna, which combined a retail pharmacy and an insurer with the hope of being more involved in Americans' healthcare. The health insurer Humana owns either wholly or through joint ventures more than 230 primary care practices.
At the cancer center, UnitedHealth has already seen some success in lowering costs by separating drug payments from how doctors are compensated, Witty said. Optum's plan with its medical practices is to shift risk toward physicians with the hope that by having more skin in the game they'll take better care of patients.
"Early results show that our approach, which includes decoupling drug payments from doctor compensation, can reduce oncology drug costs for seniors by nearly 30%," Witty said.
Krishna Yeshwant, a doctor who heads the life-sciences team at GV, formerly Google Ventures, said the transformation harked back to the origins of the US healthcare system, with health plans growing out of hospitals as a way to cover the cost of care. The model is also similar to health systems like Kaiser Permanente, the Pennsylvania-based Geisinger Health System, and Utah's Intermountain Healthcare.
Over the decades, many health insurers separated from hospitals to become their own entities. But along the way, decoupling the coverage from the care has mixed up the motivations, he said, and bringing those businesses back under the same roof has the potential to improve care.
"To me, that's the world that made the most sense," Yeshwant said. But on the other hand, he noted, it could also lead to the corporatization of healthcare, which could put pressure on independently operated medical practices.
How UnitedHealth can use its doctors' offices to its advantage
Business Insider toured Optum's cancer center in October, getting an inside look at how the company is planning to dominate US healthcare.
The OptumCare Cancer Center is one of numerous medical offices UnitedHealth has in the area.
OptumCare's presence in Southern Nevada includes medical practices run under the name Southwest Medical, which operates primary care, urgent care, pediatric clinics, women's health centers, and senior care.
About 600 new patients have been referred in to the facility every month, Witty said at the December investor event. About 25% of the referrals for the month of October came from community doctors, while others came in from Optum-operates medical practices.
Inside, the cancer center has a main front desk and a lobby with an atrium opening it up to the second floor. Just off the main hallway sits a library where patients and their families can read up on recent literature.
The hope with the center is to be a place where patients feel comfortable getting cancer care, rather than traveling elsewhere, a common occurrence in the Las Vegas area, said Ernest Barela, the executive vice president of OptumCare Specialty Nevada.
"What you hear in Las Vegas a lot is that a lot of people get on an airplane to go elsewhere for healthcare," he said.
Barela's not new to operating medical practices. Prior to his work with Optum about six years ago, he served as the chief operating officer of Intermountain Healthcare's HealthCare Partners.
To help care for patients, the cancer center has a space to host tumor boards, meetings in which doctors from around the city come in and consult on a case alongside oncologists and primary-care doctors for a particular patient.
The center is also outfitted with imaging equipment and a compounding pharmacy. The goal, Barela said, is to be able to provide important types of treatment without patients having to leave the center. Here's a room outfitted with a tool for a breast biopsy.
Barela said the plan initially was to operate an urgent-care center for cancer patients within the cancer center as well. Ultimately, the organization decided to use that space as a café and instead use Rancho Urgent Care, a location just around the corner that's operated by Optum as well.
Patients are directed there to a cancer-specific urgent-care area, in which the medical providers there are able to log into the cancer center's electronic health record.
That way, should patients feel side effects from their treatment like fever, infections, or nausea, they can head to the urgent-care facility rather than end up in the emergency room. In return, the cancer center can have a better picture of when patients are going in for emergency care.
Barela's priority, he said, is getting better care for patients.
"If you do a good job and providing a good service, the reimbursement follows," Barela said.
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