UnitedHealth Group’s Optum health services business is working on its own turnaround that includes leaving some markets and ending contracts with medical care providers that aren’t aligned with the company, Optum chief executive Dr. Patrick Conway said Tuesday, January 27. In this photo, Conway is speaking at the 2025 Forbes Healthcare Summit December 4, 2025 at NYU Langone Health in New York.
Jamel Toppin
UnitedHealth Group’s Optum health services business is working on its own turnaround that includes leaving some markets and ending contracts with medical care providers that aren’t aligned with the company’s strategy.
For years now, Optum has grown its medical care provider network with parent company UnitedHealth becoming a model mimicked by rivals whereby a payer – the health insurance company UnitedHealthcare – and a provider of medical care services in Optum are under the same umbrellas.
But UnitedHealth and Optum executives Tuesday admitted that model hasn’t been fully aligned as it should be so they are scaling back to make sure the value-based care approach is working to make sure patients get the right care, at the right time and in the right amount.
“We are focusing on markets where we have strong presence and the complementary wrap-around services to succeed in our integrated, value-based care approach,” Optum chief executive officer Dr. Patrick Conway told analysts and investors on a call Tuesday morning to discuss the company’s fourth quarter and full-year 2025 earnings. “We provide these services under an aligned incentive structure that improves outcomes, reduces costs, and improves patient satisfaction. Practices operating in this environment are driving down total cost of care by up to 30%, with patient satisfaction NPS near 90.”
Optum Health includes more than 2,000 clinics and 370 ambulatory surgery centers across the U.S. as well as as well as more than 700 home health agencies and 265 hospice centers. Optum Health is under the Optum umbrella that also includes OptumRx, one of the nation’s largest pharmacy benefit management companies.
Thanks to a large restructuring charge, UnitedHealth’s fourth quarter net income tumbled to just $10 million, or one penny per share, compared to $5.5 billion in the same period a year ago. Meanwhile, UnitedHealth’s full-year net income was $12 billion, or $13.23 per share, compared to $14.4 billion, or $15.51 a share in 2025.
Optum revenues were up 8% in the fourth quarter to $70.3 billion and up 7% for the year to $270.6 billion compared to $253 billion at the end of 2024.
But the Optum Health unit of Optum reported full year 2025 revenues that were down 3% to $102 billion last year after years of annual growth. Meanwhile, Optum Health’s adjusted earnings from operations were down to $2.3 billion last year compared to $7.9 billion in 2024.
But Conway, who was promoted into the Optum CEO role last year, said he expects “operating earnings growth of approximately 9%” at Optum in 2026. “This growth is driven by a ‘back to basics’ focus on integrated value-based care and execution,” Conway told analysts.
Conway said Optum Health will also be narrowing its “affiliated network by nearly 20% since this time last year, with the goal of having a more optimal alignment of physicians and services in place to best serve our patients.” This will reduce the number of care sites by about 550 locations with medical practices being closed or sold to hospitals or other providers of medical care.
In addition, Optum Health will be “dropping unaligned PPO (preferred provider organization) contracts, repositioning certain markets, and payer de-delegation in instances where we were not able to reach a viable sponsor contract.”
Optum will also be pushing the medical care providers in its networks toward adopting more and better technology and artificial intelligence.
“We are intensely focused on driving consistency, accountability, and performance,” Conway said. “For example, we now have nearly 100% of our employed providers groups on one of three strategic electronic medical records. This is down from 18 EMRs in the past few years. This will enable us to more swiftly adopt enhanced workflow tools and AI, as well as have more timely and consistent data to guide our patient care efforts.”