The short answer is no, Optum is not part of Humana. However, the two companies do have an important strategic partnership. In this article, we’ll take a deep dive into the relationship between Humana and Optum and how they are working together to shape the future of healthcare.
Understanding Humana and Optum
First, let’s provide some background on each company.
Humana is one of the largest health insurance providers in the US. As of 2022, it provided medical insurance to over 20 million Americans in all 50 states. In addition to insurance, Humana offers services like home health care, pharmacy benefits management, and analytics solutions. The company is based in Louisville, Kentucky and employs over 70,000 people.
Humana has been a pioneer in value-based care models which focus on improving outcomes for patients rather than just paying for services. It operates its own care delivery services through partnerships with over 200,000 physicians across the country.
Optum is the health services division of UnitedHealth Group, the largest single health carrier in the US. Optum provides software and technology, pharmacy care services, analytics, and care delivery. Its three main business lines are OptumHealth, OptumInsight, and OptumRx.
OptumHealth provides care delivery services like physician practices, home health, and outpatient care centers. It has over 67,000 affiliated physicians serving over 100 million patients.
OptumInsight offers software, analytics, consultancy services, and more to healthcare organizations. Its revenue cycle management software is used by over 2,300 hospitals.
OptumRx is a pharmacy benefit manager that serves over 65 million Americans.
In total, Optum services over 190 million individuals which is a huge portion of the US population. The company is based in Eden Prairie, Minnesota and part of the Fortune 5 conglomerate UnitedHealth Group.
The Strategic Partnership Between Humana and Optum
Now that we understand the basics of Humana and Optum, let’s discuss their partnership.
In early 2018, Humana and Optum came together along with Quest Diagnostics, MultiPlan, and UnitedHealthcare (another UnitedHealth company) to form the Blockchain Consortium. This consortium aimed to pilot blockchain technology to improve data quality and lower administrative costs in healthcare.
Specifically, the consortium targeted the costly issue of maintaining accurate provider directories. Under government mandates, health plans must keep up-to-date contact information on physicians in their network. However, with separate parties maintaining their own directories, this process often involves repetitive verification and manual reconciliation that is time-consuming and expensive.
The blockchain pilot explored using distributed ledger technology to share provider directory updates between the consortium members in real-time. This would eliminate duplication of efforts and enable all parties to access a single source of truth.
Mike Jacobs, an Optum engineer, described the partnership as “one of the first, if not the first, national blockchain alliances for healthcare.”
Why Humana and Optum Came Together
This blockchain alliance demonstrates the willingness of Humana and Optum to come together to solve industry-wide challenges. But why did these two healthcare heavyweights partner in the first place?
There are a few factors that motivated the partnership:
Shared challenges: Humana and Optum face many of the same obstacles like inefficient administrative processes and data management. It made sense to join forces.
Complementary expertise: Humana brings insurance expertise while Optum offers technological capabilities. Together they are more equipped to innovate.
Previous partnership success: Humana and Optum partnered together on some programs prior to 2018 which built trust and familiarity between the organizations.
Industry influence: Both companies are recognized healthcare leaders. Partnership expands their sphere of impact across the industry.
While the two companies compete in some segments, the strategic partnership allows them to advance their shared priorities around improving efficiency, reducing costs, and enhancing patient outcomes.
How the Partnership Has Evolved
The blockchain consortium marked the beginning of an ongoing collaborative relationship between Humana and Optum that extends beyond just a single project. Here are a few ways the partnership has evolved over the past 5 years:
Value-based care contracting: Humana and Optum have negotiated value-based reimbursement models between Humana insurance plans and OptumCare physician networks in multiple states. This ties payment to health outcomes.
Home health joint venture: In 2020, the two companies formed a joint venture called Kindred at Home to expand home health services across the country.
Primary care clinics: Humana has opened primary care clinics embedded in Optum Rx pharmacies to improve care coordination for chronic conditions.
Analytics projects: Humana licenses Optum’s analytics platforms to mine data and gain clinical insights that improve patient targeting and risk management.
Thought leadership: Executives from both companies often jointly speak at industry conferences and publish articles identifying emerging healthcare trends and opportunities.
The two organizations clearly realized the blockchain pilot was just the start of a collaborative relationship that could bear fruit in many ways. While not a full merger, the strategic partnership model has allowed them to capitalize on their respective strengths.
What Does the Future Hold?
It’s clear the partnership between Humana and Optum has been a successful one that continues to deepen. What might the future look like?
Here are a few potential directions:
International expansion: Humana and Optum could take their partnership global by jointly entering new country markets abroad that need improved healthcare systems.
Merger of subsidiaries: Humana and Optum may merge healthcare delivery assets like physician groups, pharmacies, or home health operations to gain scale.
Insurance joint venture: They could form a health insurance company that combines their unique capabilities like Humana’s Medicare experience and Optum’s analytics expertise.
Development of new ventures: Partnership could yield additional health services joint ventures, technology initiatives, or even a new healthcare company.
While only time will tell, the outlook is bright given the successful foundation Humana and Optum have already built together. Their complementary nature and innovative thinking positions them well to take their strategic collaboration further.
Key Takeaways on the Humana and Optum Partnership
To recap the key points on the relationship between Humana and Optum:
Optum is not an outright subsidiary of Humana. The two companies operate independently.
However, Humana and Optum have an important strategic partnership that began in 2018.
The partnership originated to solve the mutual challenge of maintaining accurate provider directories using blockchain technology.
It has since expanded across value-based contracting, home health, retail clinics, analytics, and more.
The partnership leverages each company’s unique capabilities and influence in moving healthcare forward.
Future directions for the partnership could include international expansion, mergers, joint ventures, and new health services development.
So in conclusion, while Optum is not technically part of Humana, the two organizations are increasingly intertwined in their quest to provide higher value care. Their collaboration is multifaceted and evolving to reshape the healthcare ecosystem. This provides many opportunities to improve patient outcomes and bend the cost curve. The strategic partnership between Humana and Optum will be one to watch closely in the years ahead.
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