With 8k more physicians than Kaiser, Optum is 'scaring the crap out of hospitals'

Since its acquisition of 250 Las Vegas-area physicians in 2008, UnitedHealth Group has steadily expanded its physician workforce to shield itself from competitors and hospitals, according to a Bloomberg report.

To date, the health insurance giant's physician arm, OptumCare, employs or is affiliated with about 30,000 physicians. If OptumCare completes its acquisition of Davita Medical Group, the insurer will tack on another 17,000 physicians to its ranks — making it one of the largest physician employers in America.

Hospitals are gobbling up physicians, too. A recent Avalere Health study found that by mid-2016, hospitals employed 42 percent of U.S. physicians. Nashville, Tenn.-based HCA Healthcare has roughly 37,000 physicians, Bloomberg reports. Still, Optum outpaces Oakland, Calif.-based Kaiser Permanente's roughly 22,000 physicians by 8,000.

"This is obviously scaring the crap out of hospitals in many markets," Chas Roades, CEO at consulting firm Gist Healthcare, told the publication. By controlling a greater number of physicians, Optum is not only buffering itself from competitors, but attempting to steer patients toward lower-priced care outside of the hospital.

In some cases, Bloomberg notes, UnitedHealth is directing members toward its acquired physicians. For example, UnitedHealth lists New West Physicians, a Denver-area group of 120 physicians that the insurer purchased last year, as a favored narrow-network plan for commercial members. Some members can see the physicians for 20 percent to 30 percent less in out-of-pocket expenses compared to physicians outside the network.

Andrew Hayek, a leader in UnitedHealth's care delivery operation, told Bloomberg the company has "been slowly, steadily, methodically aligning and partnering with phenomenal medical groups who choose to join us." In the future, OptumCare hopes to expand its 30-market operation to 75 markets, including the nation's most populous states: California, Texas, Florida and New York.

Whether it's hospital- or insurer-employed physicians, Ken Marlow, an attorney with Waller Lansden Dortch & Davis, told the publication, "The smartest participants in the system are the ones who are going to be able to provide quality care at the lowest cost setting. Whoever gets there first, and whoever is able to do that, I think will be the winner."

Editor's note: Becker's reached out to Optum and Kaiser to confirm their number of employed and affiliated physicians. This article will be updated if more information becomes available.

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