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What’s up with Optum workers’ comp?

Yesterday’s non-announcement that ExamWorks bought Optum’s Settlement (MSA) business should not have been a surprise.

Word on the street is Optum’s been trying to off-load its PBM (pharmacy benefit management) and ancillary services businesses for some months now. That and – for those of us who’ve been in this business for a while – UnitedHealthcare’s history in workers comp make this almost inevitable.

Here’s what I wrote on this a few years ago:

…at various times, the company [UHC] owned:

  • a technology business focused on bill review (Power-Trak…later sold to Mitchell);
  • MetraComp, A WC PPO and managed care firm (and a former employer) and
  • Focus (this last of some interest to one reader in particular :)…also,
  • here is a brief note on UHC’s ill-fated entry into workers’ comp insurance back in the nineties. (spoiler alert – that damn tail will always get you.)
  • much more recently UHC’s Optum got into the work comp PBM business in a very big way, buying Catamaran.

So, this marks the sixth time (at least) UHC has gotten into-and-out-of workers’ comp and WC services.

VERY briefly, my educated view is:

UHC gets into WC as WC looks simple, is really inefficient, UHC likes to diversify (and in most instances does this quite successfully) and UHC is extremely self-confident.

And UHC gets out of WC because it is very complicated, has very limited upside, is a shrinking business, and distracts management from important stuff.

One data national work comp medical spend is a bit over $30 billion. That is 1/12th of UHG’s total revenue.

What does this mean for you?

History predicts the future. 




4 thoughts on “What’s up with Optum workers’ comp?”

  1. Always an enjoyable read, but the Easter egg made today doubly enjoyable. You miss nothing Joe.

  2. Joe, insightful column. As a member of a management team of an entity (in that instance, a well regarded, large provider group) that decided to sell to Optum, which was a good choice given the environment at that time, I also feel I have some perspective. I agree very much with what you wrote. If I may, I’d add that Optum, like Berkshire, has the mathematical challenge of continued trended growth while running into size constraints. Also, after a while, and I’m exaggerating a little here, they run out of new things to in which to diversify their investment risks beyond growing the same businesses they are already in. So those add to the reason for Optum to consider workers comp. Adding to the complexity and relatively weak financial results comp offers (due both to market size and actual returns), I’d add that Optum has a frequent turnover in senior management who had no commitment to the comp acquisitions. So easy come, easy go. Again, thanks for the value you bring to the community, Marc

    1. Thanks for the insights Marc; very helpful.

      Of late United’s Medicare Advantage has taken a hit – as have all MA insurers so I’m guessing there’s a bit of scrambling to identify growth avenues.

      Word is United is looking to buy Steward’s physician group which would add a large number of clinicians to Optum’s growing cadre.

      Be well Joe

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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