UPDATED at 8:57 a.m. on April 25
Optum is discontinuing its telehealth business Optum Virtual Care, the company confirmed Wednesday.
Its closure was highly speculated online once employees began posting layoff notices April 18, but Optum ripped the band-aid off when Endpoints corroborated the rumors. In a statement shared with the media, a spokesperson for UnitedHealth Group’s health services arm said capabilities and services are continuously monitored to meet the company’s evolving needs.
“Virtual care has been, and will continue to be, a core part of our comprehensive, integrated care delivery model designed to provide care to people where, when and how they prefer,” the statement reads. “As an enterprise, we are committed to providing patients with a robust network of providers for virtual urgent, primary and specialty care options.”
The decision is a stark departure from UnitedHealth’s past strategy. From 2019 to 2020, telehealth appointments increased from 1.2 million to 34 million visits, a statistic that was picked up by a KFF journalist.
UHG Chief Medical Officer Margaret-Mary Wilson, M.D., previously said virtual care was a “game changer” for population health and health equity initiatives. Optum reported a 200% increase in appointments among its Medicaid enrollees in 2022.
naviHealth
In a shake-up among leadership, post-acute care management software services company naviHealth CEO Harrison Frist is resigning from his role with Optum Home & Community and the Care Transitions business in the summer, according to a document sent to employees and obtained by Fierce Healthcare.
He will be replaced by Heather Jarrett, UHG senior vice president of government clinical programs, but will continue to serve in an advisory role temporarily.
Since acquiring the company for approximately $1 billion in 2020, the Optum department is facing intense pressure. A class action lawsuit was filed in November by the families of two deceased Medicare Advantage members, arguing the company’s internal algorithm denied claims for those who needed care at a 90% error rate. The lawsuit goes on to say naviHealth employees are pressured to use the technology and bank on patients’ unwillingness to appeal decisions because of a lack of resources.
And in its latest round of layoffs, naviHealth cut 114 jobs, reported Modern Healthcare.
That is without mentioning the Change Healthcare cyberattack debacle, which has disrupted virtually all corners of the American healthcare system. The insurer is facing pressure from lawmakers and the Department of Health and Human Services to make amends to providers and the healthcare system. Plus, the Department of Justice has launched an antitrust probe into the corporation.
Optum said affected workers could get deployed at other open roles, but employees throughout the company tell Fierce Healthcare that staffing turnover and general uncertainty has made the process extra stressful. With some managers and upper leadership losing their jobs, the internal application process has been delayed, and similar roles are not always available in an individual’s current state of residence.
“To be frank, this process has been a crapshow,” said one affected employee.
Landmark Health
UnitedHealth Group’s at-home medical care division Landmark Health is also downsizing in every state, Fierce Healthcare has learned.
Landmark, which had 2,534 employees in 2022 according to S&P Capital, operates in 37 states. Optum acquired Landmark in April 2021.
Though the exact count is unclear, upwards of 370 employees were laid off at Landmark nationwide, multiple sources close to the situation told Fierce Healthcare. Affected roles include health service directors, senior operations managers, ambassadors and care coordinators. Ambassadors are non-licensed and part of Landmark’s care team.
Current and former employees say they feel blindsided by executive leadership’s actions in recent weeks because though they expected some reductions, they weren’t warned there would be so many layoffs. Some are worried more layoffs are coming.
Recent regulations could have played a factor in Optum choosing to target Landmark for layoffs. The 2024 Medicare Physician Fee Schedule final rule resulted in a reduction of provider visit reimbursements.
UnitedHealth Group subsidiary Optum appears to have laid off a significant percentage of its workforce, Fierce Healthcare has learned, though the full extent of those job cuts remains unclear.
A layoff message board and posts on social media platforms appear to show Optum has reduced its workforce by hundreds, if not thousands, of employees. The company laid off 400 employees in its California care division, an anonymous source told Fierce Healthcare.
Anonymous message board posters said up to 500 employees were affected at Landmark Health, a home health provider subsidiary. While the total number of Optum employees affected by layoffs has not been confirmed, announcements from individuals are popping up on social media.
Optum itself has not immediately returned a request for comment, and it does not appear WARN Act notices have been filed in states where there is buzz about the layoffs. The insurance giant has been accused of violating mass layoff laws in a lawsuit brought forward by former employees, Becker’s Payer reported in November.
UnitedHealthcare is still reeling from the Change Healthcare cyberattack. Optum CEO Amar Desai, M.D., said at a conference in February that Optum was in communication with cybersecurity leaders but that the company was spared from Change’s systems.
UHG reported a $1.4 billion loss during its first-quarter earnings call this week, but revenues still increased and the company outperformed the market’s EPS expectations. The markets reacted positively, while many providers struggle with the cyberattack’s aftermath.
Optum is also under scrutiny for its efforts to acquire Steward Health Care’s physician group. Massachusetts state legislators are calling on federal regulators to halt the transaction.
This is a developing story. Senior writer Paige Minemyer contributed to this reporting.