As UnitedHealth Group continues to chart its turnaround from a challenging 2025, the company's top brass is pulling back the curtain on those efforts at its healthcare services unit, Optum Health.
The healthcare giant posted disastrous results in the first quarter of 2025, which sent shares tumbling, and Optum Health was one of the major contributing factors to that earnings report. Care activity spiked, particularly in the Medicare population, which was a drag on both Optum as well as UnitedHealthcare's Medicare Advantage business.
At the Wells Fargo Healthcare Conference on Wednesday, Optum Health CEO Krista Nelson spotlighted some of the work the company has undertaken to right the ship. In its Q2 results, UnitedHealth spotlighted the turnaround in MA.
She said that one of the key elements driving the improved clinical performance, including new programs launched in response to the downturn.
"All of our clinical metrics are really performing better than we expected," she said. "So it's kind of a first bucket driving it."
She said Optum Health has seen improvements around transitions of care, care coordination and patient support across multiple touchpoints, including skilled nursing facility admissions, inpatient readmissions and length of stay.
Nelson added that the team has also emphasized cost management as a "really big theme" in 2026, more so than in the past. Operating initiatives include enhancing productivity for physicians and updates to scheduling.
For example, Optum grew patient-facing hours by 12% in the first half of the year, amounting to about 200,000 hours.
"Operating cost management has been a really big theme for Optum Health this year, I would say, driving significantly more cost savings in the business than we've done in the past," Nelson said. "That's going to be a theme that continues in the second half of the year and also into next year and years beyond."
Nelson said that Optum Health has also dug into its other payer contracts to identify misalignment, and addressing those gaps. She said the "vast majority" of addressable contracts for 2027 have been managed.
Further levers to improve performance into 2027 include network performance and evaluating partnerships. For instance, executives noted that the company plans to sell its interest in certain Optum clinics to private equity firm TPG. The sale was first reported by Bloomberg.
Nelson emphasized that Optum Health is not leaving the Sunshine State, and instead found a partner that will enable it to position for future growth.
She said the performance enhancements are pacing ahead of schedule, which will support investment back into Optum Health in the latter part of the year. It will also support margin expansion in 2027 and 2028, as the team looks ahead, she said.
"There's new strategic initiatives that we'll be launching to ensure that we're driving affordability in the system, that we're improving quality, that we're in a position to expand margin by points inside '27," Nelson said. "And then that momentum continues inside '28."
"Top line growth is probably not going to be the focus next year," she said.