UnitedHealthcare Pays Optum Providers More Than Non-Optum Providers

During the past several decades, physicians have transitioned from small, physician-owned practices to larger practices owned by corporations such as hospitals, private equity firms, and health insurers. UnitedHealth Group, the largest US health care company by revenue, sells insurance products under the UnitedHealthcare brand while providing health care services under the Optum brand, which has more than 90,000 aligned physicians. Although there are benefits to insurer-physician integration, potential concerns include regulatory gaming of the medical loss ratio and partial foreclosure of rival physician practices. This descriptive study used Centers for Medicare and Medicaid Services payer transparency data for the employer-sponsored and individual markets to show that when the relative price paid to Optum versus non-Optum providers is analyzed, UnitedHealthcare's payments are 17 percent higher than the relative price of its competitors. In markets where UnitedHealthcare has 25 percent or more market share, this percentage increases to 61 percent. The results suggest that intercompany transactions within health care conglomerates may warrant scrutiny, as they may be signals of regulatory gaming or attempted foreclosure.