Source: Forbes
UnitedHealth Group UNH -0.72%, the largest U.S. health insurer, is escalating its already aggressive effort to become a nationwide provider of medical care, targeting 75 markets across the country for expansion via its fast-growing Optum healthcare services unit.
It’s a retail approach that includes urgent care centers and related locally based community health clinics, which became a bigger focus of UnitedHealth last year after Optum bought MedExpress, which operates urgent care centers in 14 states.
UnitedHealth’s Optum executives indicated they would be “a little more aggressive” than Wall Street’s expectation that 25 to 30 clinics would open each year, Optum CEO and UnitedHealth vice chairman Larry Renfro said in response to an analyst’s question on the company’s first quarter earnings call. “We’re trying to be in 75 markets and we’re balancing how we do that through acquisitions, through startups and so forth,” Renfro said Tuesday.
Urgent care, also known as immediate care, is similar to retail health clinics operated by Walgreens Boots Alliance , CVS Health and Wal-Mart in that they are open in the evenings and on weekends to treat routine health needs. But urgent care centers also generally offer a board certified physician plus additional services such as lab tests and X-rays for potential broken bones.
It’s a popular low-cost option for consumers and those picking up the tab for healthcare as an alternative to emergency rooms, which are more expensive. “One of the more important determinants of overall healthcare cost is where a consumer enters the healthcare system, and we think what it is that our neighborhood care centers offer with respect to the portfolio of services and retail orientation of it, really hits the mark in a number of ways,” Jack Larsen, executive vice president of OptumCare.
But Optumhas competition in the space with large hospital operators like HCA Holdings and Tenet Healthcare, as well as speculation that CVS, too, may enter the urgent care space.
For now, the MedExpress brand will remain but UnitedHealth executives aren’t ruling out an effort to use the Optum brand which is driving overall growth at the insurer even as its dogged by losses in its individual business offered on public exchanges under the Affordable Care Act.
“The brand is pretty strong in the different areas where we work,” Renfro told analysts. “We do brand it as Powered by Optum and so forth, but those things are six of one, half a dozen of the other, so we’re going to have to watch that for a period of time before we make any decision about full branding.”