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Optum’s John Muir Health deal provides a new model for health system collaboration

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UnitedHealth Group’s Optum division has become a major provider in its own right, vacuuming up independent practices and physician groups nationwide.

The company’s recently closed acquisition of DaVita Medical Group makes the company one of the top employers of clinicians in the country. Much of the growth has been in its OptumCare subsidy, which is mainly focused on outpatient care settings.

A new partnership with Walnut Creek, California-based health system John Muir Health could provide a model of how the company is looking to support the inpatient hospital setting with backend services.

As part of the deal, Optum will take over non-clinical functions for the provider ranging from IT services, revenue cycle management, analytics and claims processing.

The idea is to allow John Muir to focus on patient care and lower administrative burden, while utilizing Optum data resources to shift its business to value-based care models.

“This first-of-its-kind, comprehensive relationship brings the exceptional skills and knowledge of the John Muir Health team together with Optum’s advanced technologies, analytic tools and operational expertise to deliver better health outcomes and patient experiences while reducing the total cost of care,” OptumInsight CEO Eric Murphy said in a statement.

Around 540 John Muir Health employees – which is equivalent to nearly 10 percent of the organization’s 6,000 strong workforce – will become Optum employees as part of the deal.

Greater regulatory requirements, new emerging healthcare business models and lower reimbursement rates have led to consolidation among independent providers.

While these competitive pressures are especially acute among smaller practices (making them an attractive acquisition target for companies like Optum), the same dynamics exist among independent health systems.

John Muir has sought to offset these challenges through partnerships with other local providers like UCSF Health, Stanford Children’s Health and Tenet Healthcare.

Optum looks to be betting that a major opportunity exists in enabling small health systems to stay independent by taking over administrative operations and letting providers focus on patient care.

In the company’s recent second quarter conference call, OptumInsight CEO Eric Murphy said that a number of similar deals are likely to be on the horizon.

“Our market knowledge suggests that several hundred regional health systems are interested,” Murphy said. “We’re already in talks with several and look forward to establishing similar partnerships across the industry.”

Photo: mediaphotos, Getty Images

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