Optum Health is about four months into a leadership transition, with its new CEO Krista Nelson laying out her vision for what the care delivery giant looks like after years of rapid expansion that company leadership has acknowledged steered the organization off course.
“You should expect Optum Health on the other side of this to more consistently deliver market leading integrated value-based care, a system that is anchored with our employee groups, but with the help of technology and operational improvements, more scale and a more tightly managed network,” she said on the Becker’s Healthcare podcast.
Optum Health, the care delivery arm of UnitedHealth Group, previously employed or had contractual ties with around 90,000 physicians. The unit spent 2025 scaling back after a period of overexpansion, narrowing its affiliated provider network by nearly 20% over the past year and reducing its risk-based membership by around 15% through dropped PPO contracts, market exits and walking away from risk-sharing deals with insurers where the company could not reach viable terms.
Last year, company leadership said the business has been contending with an $11 billion headwind over three years tied to risk model changes at the federal level, elevated medical cost trends and challenges absorbing new members from other MA plans. Value-based care membership is expected to decline about 10% in 2026 before growing next year, with Optum Health projecting approximately 9% operating earnings growth in 2026, on a path toward a target profit margin of 6% to 8%.
The financial pressures come at a time when UnitedHealth’s vertically integrated structure, composed of more than 2,600 subsidiaries, has drawn the attention of lawmakers during congressional hearings this year, along with the proposal of legislation that aims to prohibit companies from simultaneously owning a health insurer like UnitedHealthcare alongside a medical provider.
Ms. Nelson, who previously served as Optum Health’s COO and CEO of UnitedHealthcare’s Medicaid business, said the unit’s underlying capabilities remain strong, including primary and specialty care, behavioral health, home health, hospice, palliative care and surgery centers. While she noted that performance across its markets is uneven, the core mission and commitment to value-based care is still intact.
“Our value-based care model delivers superior outcomes at a lower total cost of care, while we see improved patient experiences and provider satisfaction,” she said.
She pointed to Houston as an example of what the model looks like when it works. In that market, Optum Health serves close to a million patients across more than 50 clinical settings, operates a 4.5-star Medicare Advantage plan, and reports total cost of care 15% to 30% below alternatives, with high patient satisfaction scores and low provider turnover.
Optum acquired Kelsey-Seybold Clinic, a Houston-based multispecialty group with more than 500 physicians across 55 specialties, in 2022 for around $2 billion, along with its affiliated MA plan.
More broadly, Ms. Nelson pointed to internal company research reporting that Optum Health’s MA patients in value-based arrangements have 21% fewer hospital admissions overall, with reductions of 35% for patients with hypertension and 44% for those with COPD and related conditions.
On clinician experience, she said the company has been deploying ambient scribing technology for patient visits, as well as AI-powered summarization tools that pull together medical records, claims, labs and other patient history to help clinicians prepare for visits. For home health nurses, she said the same summarization capability is delivered in audio format so nurses can review patient history before a visit.
UnitedHealth has previously said it plans to invest nearly $1.5 billion in AI and related technologies this year, with a similar amount expected in 2027. The company has already integrated over 1,000 AI use cases across its business and employs more than 2,000 AI engineers.
“This is really about starting with listening to our clinicians and starting with what they need to improve patient care and patient outcomes,” Ms. Nelson said.
In January, CMS proposed a nearly flat funding increase for MA plans, which has drawn industry ire. Ms. Nelson said the proposed rate will undermine the ability to invest in value-based infrastructure if finalized, pointing to possible benefit cuts and reduced investment in preventive care and care coordination.
“When that funding is not stable, what happens is we are going to need to make choices in how we manage that cost environment,” she said. “Patients may end up in the ER or getting fewer preventive screenings.”
Asked what has surprised her most in the first months of the top role, Ms. Nelson said “what is really alive and well is resilience, a deep purpose and commitment to our patients and to the promise of value-based care, and truly an innovative spirit. I’m so pleasantly surprised with the the purpose and the potential of this business, and I couldn’t be more thrilled to be here at this time when healthcare needs us now more than ever.”
