This year, as in past years, Healthcare Informatics has designated several vendor companies in healthcare IT as “Most Interesting Vendors,” and is featuring profiles of those companies in its Healthcare Informatics 100 issue, which this year is our May/June issue. The “Most Interesting Vendor” designation is not an award, but simply a recognition.
The trajectories of these companies speak to some of the broader trends taking place in healthcare IT in general and in the healthcare IT vendor market, and are thus of interest to readers. Healthcare Informatics’ Editor-in-Chief Mark Hagland’s profile of Epic can be read here. Below is our profile of Optum.
The healthcare payer industry, much like its provider segment counterpart, is continuing to put more of an emphasis on predictive modeling approaches that will give insurance companies better insights into data they already have. The Minnetonka, Minn.-based UnitedHealth Group is one big-name payer that has forayed into the health IT space, as it offers products and services through two operating businesses, UnitedHealthcare and Optum, both subsidiaries of UnitedHealth Group.
In 2011, United HealthGroup’s health data subsidiary Ingenix rebranded as OptumInsight. In a press release at that time, Optum’s then-CEO said, regarding the unification of UnitedHealth Group’s health services businesses under the master brand Optum, “This step will make it simpler for clients to connect with the broad expertise and innovative capabilities across our businesses, so we can help them improve population health, reduce the cost of care and make healthcare work better for everyone.”
Indeed, OptumInsight, the health data analytics arm of the Optum brand, develops its projections based on claims data covering 170 million lives, clinical data spanning around 80 million lives, data related to 3 million medical procedures, 8 billion laboratory results, and other such diverse data points, according to an April 2016 Market Realist article. In turn, this data enables the company to make accurate financial and clinical projections for its clients. Optum officials further note that the vendor now works with 300 health plans and approximately 80 percent of U.S. hospitals.
For years, Optum has ranked amongst the top companies in the Healthcare Informatics 100—an annual ranking of the top vendors with the highest revenues derived from health IT products and services earned in the U.S.—but in the last three years, the vendor has soared to the No. 1 spot on the list each year, due to Healthcare Informatics now allowing revenue derived from the payer market to be included. Indeed, with a 2016 health IT revenue of $7.33 billion, Optum’s success in helping health plans and provider organizations in the analytics space has become much more well-known. Rick Hardy, who is the chief operating officer of OptumInsight, encapsulates what the company has been able to accomplish into three big areas: moving beyond analytics “for analytics sake”; payer-provider collaboration; and creating modernization.
While analytics, according to Hardy, is “the kernel” of what OptumInsight is and how it started, what its clients—inclusive of payers, providers, life science companies and government entities—are now asking for is that since they have gotten to the point where the analytics are giving them insights into population health issues, and cost and quality insights, it’s now becoming about how to translate those into decision making on the front lines, be it clinical or administrative. “So it’s [becoming] about decisions on how to manage cost, and quality, too,” Hardy says. How we help our clients do that and how do we take our analytics and move them into the workflow of what they do every day? We have success stories in being able to help clients do risk-based contracts being put together by payers and providers, which are underpinned and completely informed by a set of analytics that our people and tools have helped developed,” he says.
Drilling down, Hardy notes that as health systems are now taking on more risk and looking at populations of people that they have to manage as opposed to someone showing up at the front door for an office visit, OptumInsight analytics “are a translation of population health management as well as of financial and risk management.” He says, “We have a long legacy of doing that for payers, and we are translating that into the provider world. This helps them negotiate risk-based contracts, so they now have an idea of how they will win in those contracts.” Hardy adds that the number of health systems that have that skillset of being able to win in a risk-based contract “is still really low.”
As such, Optum combines its analytics tools with its 1,000-person consulting team that brings its skillsets into clients’ four walls. “Now, you are managing that population,” he says, offering an example of a client that is using Optum’s full suite of analytics products and translating it into something tangible. This could sometimes be as simple as knowing which patients “need to get touched this week,” Hardy explains. “And they have that deployed through their community care teams, their emergency departments, and [other] high-risk therapeutic areas where they know those patients will drive utilization and cost. Now they’re on the hook to manage all of that,” he says.
What’s more, in Allentown, Pa., the four-hospital Lehigh Valley Health Network (LVHN) uses four Optum software models as well as 25 Epic electronic health record (EHR) software modules, and interfaces clinical data between the Epic EHR and Optum software, notes Mike Minear, the organization’s senior vice president and CIO. The focus, says Minear, is to leverage the strengths of both systems and integrate claims data and risk scores with clinical data and online clinical knowledge. “In both Optum and Epic, LVHN has created a number of clinical registries that surfaces and visualizes claim, clinical, and risk data elements that are used by clinicians in many different settings and roles, to optimize clinical and financial decision making,” he says.
More specifically, Minear explains that with an initial focus on high-risk patients, LVHN “has loaded Optum risk scores and other claims-created data points into the EHR, and continues to expand the care locations and providers that use this data in clinical encounters across the care continuum.” For the work done by LVHN’s clinical care teams (CCTs) using Optum and Epic, several studies have been performed to assess the impact of their care management and interventions, Minear continues. As such, material improvements were found in key outcomes (ED visits and hospital admissions) for patients managed by the CCTs when compared to a control group of patients not managed by CCT professionals, he says, attributing the results to “having both clinical- and claims-based data delivered via real-time analytics tools.”
Payer-Provider Convergence Becoming Collaboration
Not too long ago, healthcare payers and providers were considered adversaries, but market pressures have led the two sides to converge now, perhaps more than ever before, and Hardy actually sees the convergence turning into collaboration, slowly but surely. He asks, “How do we create ways to reduce the friction between payers and providers in the administration of healthcare? For the same things that help with the analytics part, how do we apply those things to a reduction of that friction, be it around utilization management, payments, claim, and quality, which is becoming more important? We have a large revenue cycle management business that takes our analytics tools, technology and workflow things that we do, and tries to create better connections into payers,” he says.
Certainly, Optum’s senior leaders are in a unique position when it comes to their vantage point on payers and providers working together, with many clients on both sides. Hardy admits that progress on collaboration is slow, but says it’s happening and it’s where things are going in the future. “I can’t speak for everyone, but I can speak for our clients and the work we do, so when we go in with our Optum360 [revenue cycle] business and take on end-to-end revenue cycle management for a health system, we build in performance guarantees. Some of these are tied to our ability to drive down denials and move from clean claims rates and how those get processed, and we can do that because we have a strong understanding of payer systems and how they think about processing through their adjudication system. This helps create more transparency across both sides,” he says.
Going beyond just OptumInsight, another goal is being able to go to both payers and providers and say that Optum has the capabilities that aren’t just the technology and the IT, but includes other ways to help drive what everyone wants to achieve in reducing cost, improving outcomes, and better management of populations, Hardy says. “We want to create relationships that are focused on those things, and then bring other assets to it, whether that’s our own care delivery assets or our ambulatory care assets. So it’s expanding the number of ingredients you can put in to help both sides think about the value they’re trying to create together in a community,” he says.
Innovating for the Future
That third bucket of Optum’s business acumen that Hardy mentioned, creating modernization, has to do with the administration of healthcare still being very fragmented, leading to a need to create true modernization of the back end. He says that much of it is also driven by still-manual processes that cause major lag times in information moving around. So, Hardy asks, “How do we create scale-efficient managed services across healthcare to provide a modernization of that infrastructure for the industry?”
For Optum, true innovation is not about creating the next analytics tool that creates a buzz, but more about how to really help its clients operationalize that best practice and operationalize the insight that is being created, Hardy says. “Yes, we are going to embrace the latest technologies and push the envelope around analytics, or how artificial intelligence can help us get better and faster at creating the insights and points of decision making, but all of that still needs to translate into how you operationalize that within a complex care delivery system,” he says. “You have a complex set of relationships with different constituents such as payers, providers, and patients, and that’s where innovation needs to happen in healthcare.” He notes that the key to that is “getting your hands dirty and getting on the ground with clients, and that’s why we have a 1,000-person consulting group. We’re down in there with our clients. We are a managed services vendor; not just someone who installs software and walks away.”
One of the things that Hardy feels Optum has done, but has not encapsulated it well yet, is showing that an impact has been felt in a community or a number of communities. “Can you say that in a local community, we are a difference maker, in terms of the health of that community, and the trajectory of what cost and quality looks like in that community? Hopefully we are looked at as an aggregator and enabler of how healthcare is done in that community—and in a good way, so less friction, less costly, and more efficient. That’s what I hope we are able to show, and we’re on our way,” he says.