
In July, reports surfaced that one of the country’s largest ambulatory surgery center (ASC) chains – Surgery Partners (Nasdaq: SGRY) – was exploring strategic alternatives, including a possible sale. Health care behemoth UnitedHealth Group (NYSE: UNH) was identified as one potential buyer.
UnitedHealth Group, the parent of Optum, is a major player in the ASC space, having acquired SCA Health in 2017. Strategically, adding to its ASC footprint makes sense for UnitedHeath Group, with company leaders looking to execute upon their core growth initiatives while embracing health care consumerization trends.
“Our teams are providing more people with more high-quality health care services and benefits and restlessly looking for ways to simplify the health system and deliver more value for patients, employers and providers alike,” UnitedHealth Group CEO Andrew Witty said during the company’s third-quarter earnings call Tuesday morning.
UnitedHealth Group, through its Optum arm, has built a substantial ASC network.
SCA alone has more than 320 surgical facilities across the U.S., according to the ASC chain’s website. And even after buying SCA in 2017, UnitedHeath Group doubled down on its ASC strategy, purchasing dozens of outpatient facilities in 2023.
An analysis from STAT found that UnitedHealth Group acquired more than 50 companies in 2023, including over 35 surgery centers and physician practices.
UnitedHealth Group’s growth strategy revolves around several pillars, including its pharmacy and benefits businesses, technology, and, perhaps most of all, value-based care.
ASCs check many of those boxes, with ambulatory surgery centers demonstrating the ability to lower health care spending while improving patient outcomes. ASCs exemplify the shift to value-based care by focusing on efficiency, outcomes and cost, a notion that’s very much in line with UnitedHealth Group’s vision.
“For over 20 years, there has been a bipartisan consensus among health care experts and policymakers that value-based care that is integrated, patient-centered and outcomes-focused care is superior to the often fragmented and unnecessarily expensive fee-for-service system,” Witty continued. “Across four presidential administrations, [the U.S. Centers for Medicare & Medicaid Services] has called for private-public innovation in the development of value-based care models in Medicare and Medicaid. It provides better outcomes for patients. It saves money for the customers and taxpayers who fund care. And it empowers clinicians to focus on providing the most beneficial care.”
UnitedHealth Group’s Q3 2024 revenues grew nearly $8.5 billion year over year to $100.8 billion, led by growth in terms of number of people served at Optum and UnitedHealthcare, the company’s payer arm.
Optum, in particular, posted third-quarter revenues of about $63.9 billion, an increase of roughly $7.2 billion compared to the same period a year ago.
“This was driven by an increase in both the number and type of care services we offer and the patients we serve, especially in the home and among those with complex needs,” President and CFO John Rex said on Tuesday’s call.
UnitedHealth Group executives did not address ambulatory surgery centers directly, nor acquisition opportunities related to ASCs.
Witty and Rex did, however, offer their perspective on the company’s future capital deployment – and what investors can expect moving forward.
“Broadly speaking, our capital deployment is going to be very much led by our five growth pillars of focus for the organization,” Witty said, referring to the previously mentioned core focuses. “Those are going to be the areas in which we think about capital deployment. Value-based care is really the organizing principle, which binds all of that together.”
“And then I would add to that, something we talked about over the last two years extensively is consumerization,” the CEO continued. “You should expect us to continue to challenge and push on how we can constantly modernize the consumer experience that we’re able to offer.”
While UnitedHealth Group leaders are bullish on the company’s outlook, the health care giant is facing multiple headwinds that could dampen its ability to execute on a blockbuster deal.
With its Q3 2024 financial results, UnitedHeath Group lowered its full-year outlook and adjusted expectations for 2025, citing challenges with Medicare Advantage utilization and Medicaid redeterminations.
“Despite the challenges that we see in the environment externally, we believe at UnitedHealth Group, we have the right mix of people, capabilities, passion and compassion to allow us to not just navigate 2025, but actually, in doing so, set the foundations for continued differentiated performance for many years to come,” Witty said.