Surgeons in an operating room performing surgery
Surgeons in an operating room performing surgery
Surgical athletes performing in the field of medicine…

John G. Baresky

… $2.3 Billion Acquisition Has Nationwide Impact; United Healthcare’s purchase of Surgical Care Affiliates is re-writing the healthcare industry’s playbook…

United HealthCare’s business model has been changing and expanding. It reaches into several sectors beyond being a leading provider of healthcare insurance / managed care plans. With its acquisitions in and outside the managed care plan market sector, it widens revenue streams and becomes a diversified competitor not only in healthcare insurance but in provider sectors as well. The Surgical Care Affiliates (SCA) acquisition adds considerable dimension and income to the United HealthCare (UHC) business model.

…Based in Minnetonka, Minnesota, UHC (also known as UnitedHealth Group / UHG) was founded in 1974 and is ranked number 6 in the Fortune 500; it has approximately 230,000 employees and annual revenues exceeding $184 billion…

Base facts of the SCA acquisition…

  • UHC, with its OptumCare business unit, announced it was acquiring Surgical Care Affiliates (SCA) for $2.3 billion in January 2017
Surgical Care Affiliates — SCA logo
Surgical Care Affiliates — SCA logo

UHC’s expansion and diversification details; they have been steadily widening and deepening their business model for years; notable additions include:

  • MedExpress, an urgent care center provider with locations in 14 states, was acquired by UHC in 2015 for $1.5 billion

As consumers, employers, employee benefits consultants, government agencies and other stakeholders pressure UHC to reduce premium increases, UHC can leverage its total business model as a plan AND provider:

  • It can lower out-of-pocket costs for members having procedures performed via SCA units rather than outside providers

Two of UHC’s largest competitors, Aetna and Anthem, are tied up in the courts with acquisition deals facing antitrust issues (Aetna is seeking to buy Humana and Anthem is seeking to buy Cigna).

United Healthcare logo
United Healthcare logo
… UnitedHealthcare’s business model is assertively transforming from payer to payer and provider …

UHC’s differentiated approach helps them avoid antitrust regulatory issues and provides them with other competitive advantages:

  • As healthcare systems expand their business models by developing their own types of health plans, UHC keeps its business model competitive by developing provider capabilities

…The UHC / Optum acquisition of SCA is a significant development; it defines a commitment by UHC to become a provider of advanced patient care…

Moving Forward…

UHC likely has other acquisition targets and designated new healthcare sectors to expand into. There will be actions taken by their competitors -both insurance plans and provider organizations- to account for UHC’s maneuvers which serve as a catalyst for more business model changes across industry sectors. Despite the delays Aetna and Anthem are experiencing, it is likely they are evaluating their long term business plans -not to mention that other entities like BCBS plans and healthcare systems are probably doing the same.

For now, UHC has to contend with assimilating its acquisitions, learning their unique businesses and become proficient at managing them to the point where they can collectively optimize and competitively deploy them. Based on UHC’s evolving business model over the last several years, the rules of engagement across the legions of plans and providers will continue to change.

Thank you for reading this story

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.

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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.

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