The Growing Trend of Health Systems Outsourcing Revenue Cycle Services to Optum

In recent years, the healthcare landscape has seen a significant shift, with several health systems turning to outsourcing as a strategic move to manage their information technology (IT) and revenue cycle services. Since January 2023, four prominent health systems - Allina Health, ProHealth Care, Owensboro Health, and Northern Light Health - have outsourced these services to Optum, a subsidiary of UnitedHealth Group.

Driving Factors for Outsourcing

The decision to outsource has been driven by multiple factors. Key among these is the increasing complexity of patient billing and the growing dependency on technology in revenue cycle management. Health systems also recognize the need for a modern, digital financial experience that provides real-time financial information for patients.

By outsourcing to Optum, these health systems aim to leverage the scale, expertise, and resources of an established organization to enhance their administrative operations. The move allows them to invest in improving patient care, recruit and retain physicians, and drive the digital transformation of their healthcare services.

Benefits of Outsourcing to Optum

Optum brings to the table a track record of providing efficient and effective solutions for health systems. For instance, Allina Health plans to shift 2,000 IT and revenue cycle employees to Optum, allowing it to continue advancing information systems solutions, streamline billing experiences, and adopt innovative technologies. This strategic relationship is also expected to result in significant cost savings for Allina Health.

Another notable partnership is with Northern Light Health, which has outsourced a wide range of services, including revenue cycle management, information systems, inpatient care management, analytics, project management office, and supply chain management. This deal alone is projected to save Northern Light Health one billion dollars over a ten-year period.

Addressing Concerns and Potential Downsides

While the benefits of outsourcing are evident, it is important to note that it does not come without its concerns and potential downsides. For example, in 2012, Fairview Health faced national scrutiny when it used an out-of-state, for-profit company for bill collection. However, Allina's Ingham reassured that their deal with Optum will not result in similar issues, highlighting the due diligence that health systems must exercise when choosing an outsourcing partner.

Conclusion

The trend of outsourcing IT and revenue cycle services to companies like Optum is a testament to the evolving nature of the healthcare sector. This strategic move allows health systems to leverage external expertise and resources, streamline operations, and focus on their core mission - improving patient care. With careful planning and execution, outsourcing can indeed be a game-changer for health systems in today's digital age.