John Muir Health (JMH) is joining forces with Optum as part of an effort to maintain its independence, the two companies announced.
Optum, a subsidiary of UnitedHealth Group, will take over the two-hospital system’s revenue cycle management and will offer key technological support for population health and financial initiatives.
Chris Pass, chief financial officer at JMH, told FierceHealthcare that the partnership was attractive because it allowed the system to stay independent while also growing scale in its capabilities. The partnership will also allow the health system to expand its use of value-based care and data analytics, he said.
“We have had a history of wanting to remain independent and locally operated, and really have used partnerships to advance our clinical footprint,” Pass said.
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Nick Howell, senior vice president of Optum, told FierceHealthcare the company is looking to target smaller, independent hospitals and health systems with similar offerings in the future.
Health systems seeking to stay independent typically have two paths available: Either go it alone and do their best to stay afloat, or be acquired.
“Optum believes there’s a very large number of health systems out there that would view this as a new option and a third option, so that they can remain independent but tap into the scale and capabilities of a partner,” Howell said.
Pass said JMH is “taking a bit out of the playbook” in how Optum has serviced UnitedHealthcare and that it would bring notable experience in performance improvement alongside a number of services the health system could tap into.
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He said the health system also takes on significant amounts of risk in its care management initiatives, so Optum would have the background to navigate more effectively.
“It’s a pretty broad list of services that are also critical for us in the path of taking on more and more risk,” Pass said.
Howell said that the “scope and breadth” of the partnership is “unprecedented” among similar agreements between health systems and service providers like Optum. As part of the process, Optum will directly hire 540 JMH employees who are currently working in areas related to the partnership.
These hires will form a dedicated team within Optum, according to the announcement. Optum will provide additional opportunities to upskill these new workers, it said.