Vendor Analysis
published on Mar 04, 2019
Report Overview:
As Optum exceeds $100bn in revenue its growth has slowed from the torrid, double-digit rate of its early years. Priority has shifted toward integration of its product and service offerings from the many components of its growth over the past two decades for different functions of the healthcare ecosystem). Priority continues to be on growth beyond serving UnitedHealthcare, a primary customer.
Who is this Report for:
NelsonHall’s profile of Optum’s Healthcare Payer Business Process Services (BPS) is a comprehensive assessment of service offerings and capabilities designed for:
- Sourcing managers monitoring the capabilities of existing suppliers to deliver business process services to healthcare payers
- Vendor marketing, sales and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the support services sector.
Scope of this Report:
The report provides a comprehensive and objective analysis of the Optum’s offerings, capabilities, and market presence in support of business process transformation through the application of healthcare payer BPS including the company’s:
- Offerings and key service components
- Delivery organization
- Customer base, including the company’s targeting strategy and examples of current contracts (where available)
- Revenue estimates for healthcare payer BPS
- Strategy, emphasis and new developments in support of healthcare payer BPS
- Strengths, weaknesses and outlook.
Key Findings & Highlights:
As Optum exceeds $100bn in revenue its growth has slowed from the torrid, double-digit rate of its early years. NelsonHall estimates Optum's total 2018 U.S. non-UNH healthcare payer BPS revenue at $107m, a rise of 5% over the prior fiscal year. NelsonHall estimates Optum's 2018 U.S. government payer BPS revenue at $39m, a rise of 3% over the prior year. NelsonHall estimates Optum's 2018 U.S. commercial payer revenue at $68m, a rise of 5% over the prior year.
Optum's most important customer is sister company UnitedHealthcare, from which the Optum group derived 58% of revenue in 2017 (represented as eliminations in the UNH annual 10-k). Note that for purposes of this study only non-UNH client revenue is counted as Optum payer BPS revenue.
Optum serves a majority of the U.S. commercial health plans and government entities in their payer functions to:
- Grow membership and drive consumer engagement
- Improve clinical quality and manage risk
- Achieve operational excellence
- Modernize technology and operations
- Manage pharmacy benefits.
NelsonHall estimates that Optum deploys 2,200 FTEs to serve commercial payer customers (non-UNH) and another 1,300 FTEs to serve government payer clients. Optum's global delivery facilities support (non-UNH) BPS payer clients from the following geographies:
- India
- Philippines
- United States
- Brazil
- Ireland.
Priority has shifted toward integration of its product and service offerings from the many components of its growth over the past two decades for different functions of the healthcare ecosystem, advancing where possible end-to-end, "as-a-service" or platform solutions. Emphasis continues to be on growth beyond serving UnitedHealthcare, currently the primary customer.