UnitedHealth’s Optum Health Looks to Rebound by Trimming Providers, Markets, Services
“All very logical, all actually more constructive. But to be constructive, sometimes you have to take some things away.”
That was UnitedHealth Group Inc. CEO and Non-Executive Chairman Stephen Hemsley talking Oct. 28 about his team’s plan to prune the scope of its roughly $100 billion-a-year Optum Health services group and again have it focus on the value-based care model that fueled its early growth. Given United’s reach across the healthcare system, the move has the potential to shake up the health services market.
Speaking to analysts and investors after Minneapolis-based United reported its third-quarter results, Hemsley and his lieutenants said they are looking to return Optum Health “back to its original mission.” Doing that, they said, will include pulling out of certain geographic regions, dropping some physicians not “appropriately aligned” on value-based care in favor of employed or contractually dedicated doctors and trimming the division’s lineup of clinical services and benefits.
The moves being made under the direction of Krista Nelson, who was promoted to chief operating officer of Optum Health in May, the United team is addressing a set of problems Optum Rx CEO Patrick Conway outlined on the company’s conference call: Optum’s network of doctors had grown too large, which has created inconsistencies in value-based care work. On top of that, Conway said, Optum Health had started to take on risk in products and services that weren’t a great fit for value-based care.
Hence, it’s time for one of the biggest industry players to get back to blocking and tackling and to more tightly integrate the providers it is working with.
Optum Health’s retrenchment means Conway and Nelson are expecting a drop in plan membership for 2026. Conway said about 200,000 people will drop out of United PPO plans next year. In Medicare—which he stressed is still early in its annual enrollment period—the team is forecasting that value-based care membership will shrink by about 10 percent next year. The goal from there is to return to growth in 2027.
Financials and other cuts
United executives also plan to retreat in some other product lines in 2026 as they—like many of their insurance peers—focus on fighting the higher medical cost trends of recent years with premium hikes and benefit reductions. Most notably, they expect that their Medicare Advantage membership, which ended September at more than 8.4 million, will shrink by about 1 million.
In the Affordable Care Act market—which will be severely hamstrung should federal lawmakers not find common ground on extending a set of tax credits for consumers—the United team has filed to raise premiums by an average of more than 25 percent from 2025. The combination of those price hikes and possible retreats from various service areas, UnitedHealthcare CEO Tim Noel told analysts, looks likely to slash the company’s ACA enrollment next year by about two-thirds from 2025 levels.
On the financial side, United produced a net profit of $2.54 billion in the three months that ended Sept. 30 on total revenues of more than $113 billion. In the same period of last year, those numbers were $6.06 billion and nearly $101 billion, respectively. The broader Optum group—which includes the tech-focused Optum Insight and the Optum Rx pharmacy benefit manager as well as Optum Health—posted operating earnings of $2.5 billion on $69.2 billion in sales versus $4.5 billion and $63.9 billion in 2024’s Q3.
Shares of United (Ticker: UNH) rose slightly on the heels of executives’ earnings report and commentary, closing near $368. Over the past six months, they have lost about 12 percent of their value, which has left the company’s market capitalization at roughly $333 billion.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.