BROCKTON — In March, Steward Health Care, the for-profit corporation that owns Good Samaritan Medical Center in Brockton and Morton Hospital in Taunton, announced that it had plans to sell their now-bankrupt company to Optum, a division of the UnitedHealth Group.
The deal would involve Optum acquiring all issued and outstanding capital stock of Steward Health Inc., which includes the company’s physicians in nine states, including Massachusetts, according to the notice of material change form.
“As described in the notice, this is a significant proposed change involving two large medical providers, both in Massachusetts and nationally, with important implications for the delivery and cost of health care across Massachusetts,” the Health Policy Commission (HPC) announced in a press release on March 27.
“Details of the proposal will be reviewed by the HPC to examine potential impacts on health care costs, quality, access and equity,” they wrote.
Despite concerns from politicians, patients and physicians, Steward said they do not anticipate that the proposed deal with Optum will harm the patients and employees of their hospitals, eight of which are in Massachusetts.
While the HPC continues to review the deal, here’s everything you need to know about Optum, the company vying for Steward Health Care.
What is Optum Health?
Optum was founded in 2011 as a division of the UnitedHealth Group. The company consists of three core businesses — Optum Health, Optum Insight and Optum RX:
- Optum Health consists of more than 2,000 medical groups and ambulatory care centers that provide primary care, specialty care, urgent care and surgical care in 25 states, according to the company’s website.
- Optum Insight helps clients with data, analytics, research, consulting, technology and managed services solutions, according to the website. This includes helping hospitals reduce administrative costs, meet compliance mandates and improve clinical performance.
- Optum RX consists of pharmacy care services. According to its website, Optum RX fills more than 1.5 billion adjusted retail, mail and specialty drug prescriptions annually.
What other deals has Optum done in Massachusetts?
In 2015, Optum bought MedExpress, which consists of more than 120 urgent care facilities on the East Coast, three of which are in western Massachusetts.
In 2018, Optum acquired Reliant Medical Group, which provides primary and specialty care services at locations in 11 Massachusetts towns, most of which are in the central and western parts of the state.
In 2022, Optum received approval from the Massachusetts Attorney General’s Office to purchase Atrius Health, a system of health centers in eastern Massachusetts.
How many physicians does Optum already employ?
Optum directly employs 310,000 employees worldwide, according to the company’s website. Around 90,000 of those are physicians — which government officials say comprise 10% of the country’s physician workforce. If the deal with Steward goes through, Optum would acquire more than 5,000 more physicians.
Optum makes bid for Steward Health
In March, Steward revealed plans to sell ownership to Optum, according to a Health Policy Commission notice of material change form that is under review.
According to the notice of material change form, the deal would involve Optum acquiring all issued and outstanding capital stock of Steward Health Inc., which includes the company’s primary care doctors and clinicians in nine states, including Massachusetts.
Steward Operative Holdings (SOH), the sole stockholder of Steward Health Inc., said they do not anticipate that the proposed deal with Optum will have an immediate impact on reimbursement rates, care referral patterns, access to needed services or quality of care. “Over time, SOH expects the material change to improve Stewardship’s ability to care for its patients and to provide high-value care,” they wrote.
As of May, the Health Policy Commission is still reviewing the deal.
The commission cannot block Steward’s deal with Optum, but they can inform state and federal antitrust investigations of their findings, according to reporting by the Boston Globe. Only the Massachusetts Attorney General’s office has the authority to block the deal under the state’s antitrust laws.
Why the deal has politicians concerned
Delegates are urging federal agencies to scrutinize the proposed deal between Optum and Steward carefully, citing concerns over potential increases in healthcare prices and concerns that eight of Steward’s Massachusetts hospitals could close.
In a letter addressed to Steward Health Care CEO Ralph de la Torre, UnitedHealth Group President John Rex and Optum Health CEO Heather Cianfrocco, nine members of Congress and U.S. Senator Elizabeth Warren expressed their concerns regarding the deal.
“Our profound concern with Steward’s operations in the state is closely tied to the prevailing trends of increased healthcare costs and consolidation that have been prominent in Massachusetts over the years,” they wrote, citing a concern over access to healthcare for Massachusetts’s residents.
“In July 2023, UnitedHealth reported that Optum Health posted a 6.4 percent operating margin in the second quarter — the lowest since 2012. This has raised concern that the acquisition of more physicians may be an attempt to offset these lower margins, potentially compromising the autonomy of physicians who may be pressured to prioritize efficiency over personalized care,” they wrote.
“There is also a worry that Optum may direct patients from the expanded physician network to its own urgent care or surgery centers, potentially disregarding what is best for patients.”
