Optum Health, UnitedHealth’s care services division, “strayed from the initial intent,” said Optum CEO Patrick Conway while discussing the unit’s performance during UnitedHealth Group’s Oct. 28 earnings call. However, he remained confident that the company can push the business forward.
Mr. Conway said the division’s “rapid expansion” contributed to a provider network that was too large. He cited operating inconsistencies and risk due to products and services that were not aligned with a “clinically oriented, value-based model” as other factors.
Optum Health reported flat, year-over-year revenue this past quarter. Moreover, Optum Health’s fee-based care services “were not performing to their potential,” Mr. Conway added. “We are adopting more consistent and rigorous processes to better manage these practices for growth and appropriate profitability.”
Mr. Conway said Optum Health’s recent leadership changes, particularly the May 2025 installation of Krista Nelson as Optum Health COO, will help the team stay focused on value-based care.
“We’re really deepening our presence in markets. We’re focused on the appropriate network, on the appropriate providers and the appropriate risk footprint portfolio, so that we are positioned for long-term success inside value-based care,” Ms. Nelson said.
As the team separates from providers who are not as engaged with the value-based care approach, Optum Health will work with fewer providers in 2026.
Mr. Conway expects Optum Health’s value-based care membership to decrease by roughly 10% in 2026 before growing in 2027. Optum Health anticipates margin improvement next year to set the business up for acceleration in 2027 toward a 6% to 8% margin.
“In our less mature businesses, such as Optum Health and Optum Insight, our efforts to improve operations and make needed investments will show more measured progress in 2026 and will take more time to fully bear fruit,” said UnitedHealth Group CEO Stephen Hemsley.
