UnitedHealth expands IT capabilities and products

UnitedHealth Group (NYSE: UNH), the biggest U.S. insurer based on sales, is strengthening its data and information-technology product unit, Ingenix, according to Bloomberg. The company, based in Minnetonka, Minn., bought two software companies over the last six weeks to expand Ingenix.

The move signals a shift in the large health plan's goals, CEO Stephen Hemsley said in a July conference call with analysts, according to Bloomberg. He told the analysts that health-technology and consulting are among UnitedHealth's biggest opportunities for growth, as recent healthcare legislation squeezes profit margins for traditional insurance.

Recent federal legislation is affecting plans' bottom line, forcing them to use the extensive databanks they maintain for more than billing. UnitedHealth is one of several companies expanding beyond core business to help deal with a healthcare overhaul threatening to overwhelm industry computer systems, a consultant with Gartner told Bloomberg.

Plans--if they have the right software--can help providers implement integration with other practices and hospitals through the sale of technology and consulting, and can profit even more if they outright own the software making EMRs possible. Such services will offset the new taxes, premium controls and increased scrutiny (including a prohibition of denial for pre-existing conditions) that are part of the Patient Protection and Affordable Care Act (PPACA).

Plans also face a move to ICD-10 in less than three years, a new government-mandated system for classifying diseases. Insurer spending on data technology will jump 24 percent by 2013, to $11.3 billion, according to a recent report by IDC Health Insights, of Framingham, Massachusetts.

To learn more:
- read the Bloomberg article 
- see the IDC Health Insights study

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