United Healthcare (UHC) And U.S. Healthcare Business Models: A Tradition Of Change Since 1751

John G. Baresky

On the National Register of Historic Places: the first hospital in the United States, “Pennsylvania Hospital”…

United HealthCare continues the trend…

Take a close look at the picture. It is the first hospital in the United States. Known as “Pennsylvania Hospital”, it was founded on May 11, 1751, by Benjamin Franklin and Dr. Thomas Bond. It is located in Philadelphia, Pennsylvania and is on the National Register of Historic Places. Looking at this image, so many things come to mind as United HealthCare continues to transform its business model.

From the beginning, the United States has taken healthcare very seriously; the first cornerstone of the building was laid in 1755, before the American Revolution. The contemporary, traditional hospital we know of today looks greatly different than Pennsylvania Hospital. Overall, healthcare in the United States has changed greatly as well; one of the areas where change seems to be advancing at its greatest pace is in plan and provider business models like United HealthCare.

UHC is on the move…

Last year, United HealthCare ( NYSE: UNH ) acquired MedExpress for $1.5 billion. MedExpress operates urgent care centers in 14 states: Alabama, Arkansas, Delaware, Florida, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oklahoma, Pennsylvania, Tennessee, Virginia and West Virginia. The organization became part of UHC’s Optum business unit which operates 9 urgent care facilities located in Kansas and Texas (known as Optum Clinic + Urgent Care). Optum also has PBM, home infusion and healthcare data provider units within its business.

Urgent care centers typically provide a wider and more advanced selection of services than the typical care provided by clinics in retail pharmacies. The urgent care facilities are often staffed with a medical doctor whereas the retail pharmacy care center clinician is typically a nurse practitioner. Often outfitted with additional staff and equipment, such as x-ray machines, urgent care centers can treat more complex cases.

UHC’s position as an insurer and provider is rapidly materializing and defining itself. To date, their model does not include a hospital. It does have a home infusion unit, AxelaCare, which it acquired last year. This organization is also part of UHC’s Optum unit. AxelaCare operates in 44 states and has 34 pharmacies. The urgent care clinics are also distributed across multiple states. In a recent earnings call, a UHC executive implied their expansion plans would reach 75 markets. While the total number of patients and dollars in care do not approach the scope and quantity of the larger integrated delivery networks, UHC’s role as a provider has advanced significantly in a short amount of time.

For comparison, let’s look at Kaiser Permanente and Intermountain Healthcare

Two very established plans and care provider organizations are Kaiser Permanente and Intermountain Healthcare. Each has been around for years with strong regional and select metropolitan market positions. They serve as good examples plans may choose to follow if they choose to enter the provider sector. A third, more recent example of a plan also becoming a provider is Highmark. Highmark is an independent licensee of the Blue Cross Blue Shield Association and it acquired West Penn Allegheny Health Systems in 2013 for about $1 billion. West Penn Allegheny Health System, now known as Allegheny Health Network, is comprised of 7 hospitals, 1,700 physicians and 17,000 employees. It was having financial issues before it being acquired by Highmark but reportedly cleared a modest profit roughly a year after its acquisition was approved by regulators.

New medicine, new business models…

The healthcare industry is steadily moving away from its traditional business models. Patient care clinics in CVS Health, Walgreens, Walmart and other pharmacy retailers are one example. Another example is the growing number of increasingly advanced procedures performed outside of hospitals and conducted by surgical centers. A more recent development is larger healthcare systems providing health insurance to consumers.

UHC innovates a new approach to the business and clinical sides of healthcare…

For UHC, controlling costs and standardizing care is now more within their grasp. By operating their own provider organizations, they can more closely align care, benefit designs and protocols for more types of patients and conceivably better manage total costs. An additional consideration for UHC and the addition of urgent care facilities is emergency room visits. Treatment in the emergency rooms of hospitals is traditionally very expensive. By offering a selection of advanced care procedures via the urgent care setting, UHC can service a wider variety of patients to bring in more revenue plus avoid paying the higher cost of an emergency room visit.

They can also provide care for other health plan members, not just UHC plan members. Based on these details, in a short amount of time, UHC has taken limited but assertive steps in reducing the number of claims paid to outside provider entities and widened its revenue streams to include dollars from members outside of their own plans.

There is plenty of room for more acquisitions for UHC or other entities to make inroads as a care provider via urgent care centers. Nextcare, FastMed, AFC Doctors Express, CareSpot, Patient First and Doctors Care are urgent care provider chains with more than 50 units each. Another large, less likely target is Concentra. Formerly owned by Humana, they sold it back to the investment company it was bought from, Carson, Anderson & Store and their partner, Select Medical Holdings (a rehab hospital operator), for just over $1 billion in early 2015. Surgery center chains, such as AmSurg, Constitution Surgery Alliance, Merritt Healthcare, Surgical Care Affiliates and United Surgical Partners may also be options for plans to integrate provider care within their organizations.


For patients, employers and clinicians, the integration/verticalization of health plan and provider offer efficiencies and convenience in the continuum of care. This may lead to lower costs and better care if properly orchestrated. These organizations can also leverage themselves in certain markets against other health systems and other plans to compete in terms of care, cost and convenience.

New trends and their impact on clinicians…

For physicians, it’s a mixed bag. They may or may not have the freedom to practice as they wish if they are employees of a vertically integrated plan/provider organization. It also may be easier for them to practice as they may not have to be concerned with certain charges they assign to patient care will be challenged by the plan and potentially reduce their reimbursement. Either way, the new trend is well underway. Less than half of physician practices are now privately held. More practices are now operated within larger organizations associated with a larger physician group, hospital/health system or broad-based healthcare entities like UHC, Kaiser or Intermountain Healthcare.

Healthcare has come a long way…

Take another look at Pennsylvania Hospital and reflect on the significant advancements in healthcare since it was built. Healthcare industry changes and challenges have been with us since 1751. Although clinical and financial complexities continue; there is continual advancement in the level of care and how it’s managed. UHC’s evolving business model reflects today’s competitive healthcare industry and the ongoing drive to improve care and reduce costs.

Read my other articles about medical and healthcare business trends, content marketing and digital strategy, brand and product management, consumer wellness, managed care and market access strategy. Contact me today for your healthcare content writing and content strategy needs for medical, business, academic, patient and consumer healthcare audiences.

I have over 20 years of experience in the healthcare industry producing valuable healthcare content for audiences and customers spanning physicians, nurses, pharmacists plus pharmaceutical companies, medical technology manufacturers, healthcare provider organizations, managed care, investors, consumers and other stakeholders.

Visit and connect…

As a healthcare content writer, my work aligns with an organization’s voice, brand, SEO elements, marketplace and objectives. It establishes trust in their company and recognized value in its products and services that generates revenue.

This experience was earned through working at Walgreens, Pfizer, AbelsonTaylor, TAP (Takeda Abbott Partnership), Hospira Worldwide and Boston Software Systems. ​

To a large degree, my professional interests emulate my family which includes doctors, nurses, physician assistants and other clinicians plus those that are working in healthcare administration and commercial enterprises.

Authentic, fact-based healthcare content marketing writing for medical, business, academic, patient and consumer audiences https://www.BareSkyMarketing.com/