It's been a busy year for OptumInsight (Eden Prairie, Minn.), aka Ingenix; not only did the company embark on a brand restructuring, it acquired several high profile companies, and continued to make controversial inroads into the provider IT market. All these activities fit into the company's strategy of being a one-stop shop for healthcare organizations to collect, understand, and exchange clinical data.
OptumInsight, a health information and analytics, technology, services, and consulting company, got its start in 1997 when UnitedHealth Group saw the market need for healthcare organizations to hone the data that they were just beginning to capture through electronic records. After being in the top quartile of the HCI 100 compendium for the past several years and nabbing the #17 spot this year with HIT revenues of $460 million for 2010, OptumInsight is poised to be on par with industry heavyweights like The Trizetto Group (Greenwood Village, Colo.) and Wolters Kluwer Health (Philadelphia).
OPTUMINSIGHT'S STRATEGY IS FUNDAMENTALLY ABOUT HELPING PHYSICIANS AND MEDICAL CARE PROVIDERS TO PROVIDE BETTER CARE FOR THEIR PATIENTS. THIS IS A STRATEGY THAT PRE-DATES ANY OF THE PROVISIONS OF HEALTH REFORM LEGISLATION. -ANDY SLAVITT
ACQUIRING CORE COMPETENCIES
In one month, August 2010, OptumInsight acquired high-acuity care solution provider Picis (Wakefield, Mass.), compliance solution provider Executive Health Resources (Newtown Square, Pa.), and HIE vendor Axolotl (San Jose, Calif.)-three very different companies that serve OptumInsight's goals in diverse ways. “There are companies that are very good with workflows and EMRs; there are companies that are all about connectivity; and there are companies that are about data,” says Andy Slavitt, OptumInsight's CEO. “What makes us interesting is that I think if you focus on any one of those things alone, but not the other two, you may solve part of a problem but you actually create problems in other areas.” Slavitt notes his company took an approach that says, “let's figure out the core competencies necessary to help all these people serve patients better.”
Ben Rooks, founder of ST Advisors, LLC, a health IT advisory and consulting firm, has a shrewder idea about OptumInsight's acquisitions. He posits that among other motivators like actual patient care improvement, UnitedHealth Group, OptumInsight's parent company, is using its Axolotl and Picis acquisitions to improve its medical loss ratio [which under the American Recovery and Reinvestment Act (ARRA) mandates insurers to spend at least 80 percent of their collected premiums on medical care].
Bill Miller, president of provider markets of OptumInsight, says his company was just adding core competencies to its portfolio. “As Andy and I surveyed the field and our own portfolio, and because of the volatile environment that most providers found themselves in, there were some decisions we made that acquisitions were the right fit and the good news about all of those, we've been right. The market has rewarded us,” he says.
Slavitt adds: “OptumInsight's strategy is fundamentally about helping physicians and medical care providers to provide better care for their patients. This is a strategy that pre-dates any of the provisions of health reform legislation.”
GETTING INTO THE HIE BUSINESS
The portfolio purchase that made the most noise in the industry was OptumInsight's acquisition of Axolotl. OptumInsight is no stranger to controversy, having been previously embroiled in scandal in 2008 when New York Attorney General Andrew Cuomo charged that the Ingenix database “intentionally skewed ‘usual and customary’ rates downward through faulty data collection, poor pooling procedures, and the lack of audits.”
SOME IN THE INDUSTRY ARE WORRIED ABOUT DATA SECURITY AND INTEGRITY ISSUES WITH THE MARRIAGE OF OPTUMINSIGHT AND AXOLOTL.
Some in the industry are worried about data security and integrity issues with the marriage of OptumInsight and Axolotl. Some providers are actively avoiding participation in HIEs if the vendor is owned by UnitedHealth Group or Aetna (which acquired Medicity in December), says Jason Hess, director of clinical research of the Orem, Utah-based research firm KLAS. “There is an understanding that it's ‘Big Brother’ that owns this and is a payer and they say, ‘well, we're not going to participate in this because payers and providers don't mix,’” Hess says.
MEDCHI AND CRISP HAVE ALSO SUPPORTED LEGISLATION WHICH WOULD GIVE THE MARYLAND HEALTH CARE COMMISSION AUTHORITY TO REGULATE SECONDARY USES OF DATA THROUGH HEALTH INFORMATION EXCHANGES. -DAVID HORROCKS
Hess also recognizes another camp of providers, which realizes that payers can't legally get access to this information. “I hear from customers of Medicity and Axolotl that their [payers are] going on PR campaigns almost, saying ‘look, your data is safe, we can't legally touch it,’” Hess says.
Slavitt counters that UnitedHealth Group is just OptumInsight's holding company and is a completely separate company. He adds that, a few months after the acquisition, his company formed an external physician advisory board to serve as an oversight committee that is chaired by former chair of the American Medical Association board of trustees and former president of the Massachusetts Medical Society, Joe Heyman, M.D. “They provide an added level of oversight and transparency to how we look at data,” Slavitt says. “We do that because we think that the most important thing we can do is not just related to how we use data, but how we work with physicians in general; and to listen to their concerns because physicians' needs have not been met with information technology.”
Even with those guarantees, some Axolotl customers, like David Horrocks, president of Chesapeake Regional Information System for our Patients (CRISP), Maryland's statewide HIE based in Catonsville, Md., wanted to take extra precautions to ensure his state's data integrity. After hearing concerns from some physicians, Horrocks worked with the Maryland State Medical Society (MedChi) in Baltimore, and included an addendum with Axolotl to reiterate its position. “MedChi and CRISP have also supported legislation which would give the Maryland Health Care Commission authority to regulate secondary uses of data through health information exchanges,” says Horrocks. “That will likely be signed into law soon. In short, yes it was a concern, but I think we all worked through it well.”
FUTURE GROWTH
Slavitt sees OptumInsight continuing in the future to help healthcare organizations operate in a lower cost, lower reimbursement environment, comply with changing governmental regulations, and manage the care of their populations. He wants to pick partners very carefully to ensure the company's long-term growth. “I think we're putting our time and effort in those places where we really find motivated sets of clients who see the future similarly to what we see and where we match up to help them get into an environment where life is now very different,” Miller adds.
Healthcare Informatics 2011 June;28(6):52-53
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Correction:
In the June issue of Healthcare Informatics, “Clinical Chimera: OptumInsight” (p. 58), the article inadvertently mischaracterized one element of a 2008 controversy involving Ingenix, the company now known as OptumInsight. The article incorrectly stated that “New York Attorney General Andrew Cuomo uncovered that Ingenix’s database underpaid healthcare claims through faulty collection and a lack of audits.”
That sentence included two errors: first, then-AG Cuomo alleged that health plans, not Ingenix, underpaid providers’ claims. Second, Cuomo did not allege that Ingenix or the databases actually set rates; that activity was carried out by the health plans themselves. The New York AG’s office did charge that the “Ingenix database intentionally skewed ‘usual and customary’ rates downward through faulty data collection, poor pooling procedures, and the lack of audits.”
In response, Ingenix recognized the appearance of a conflict of interest, given that its parent company owned health plans, and reached a settlement with the state of New York in which United HealthGroup, Ingenix’s parent company, contributed to the creation of FAIR Health, a not-for-profit organization that developed a product to replace Ingenix’s cost databases, and Ingenix worked closely with the new organization to smooth its transition. Healthcare Informatics regrets the misstatements.
