OH announces Optum partnership

Jan. 11—Owensboro Health will be transferring its billing and information technology services to Optum, a Minnesota-based firm, beginning in April.

The hospital system has entered into a multiyear agreement with Optum.

As part of the agreement, 575 Owensboro Health employees will become Optum employees, a move that OH officials say will not result in job losses or reductions in pay for those affected.

Hospital officials began announcing the agreement with Optum to Owensboro Health staff Tuesday morning. The contract with Optum takes effect April 23.

Mark Marsh, OH's president and CEO, said Optum will manage the hospital's revenue cycle, which includes billing, insurance verification, coding and collections.

Employees working in "revenue cycle" services and IT would stay employed at Owensboro Health facilities, Marsh said.

"It's a shift, a transfer" of employees from OH to Optum, Marsh said.

The transfer would result in "no job loss, no pay cuts," he said.

Brian Hamby, Owensboro Health's director of marketing, said he could not disclose the length of the agreement or the financial terms between OH and Optum.

When asked if the hospital system would see a savings in personnel costs through the agreement, Hamby said he could not release that information, citing a confidentiality agreement with Optum.

Optum is part of UnitedHealth Group, a Minnesota-based healthcare and health insurance corporation. The Minneapolis/St. Paul Business Journal reported UnitedHealth Group had $287.6 billion in revenue in 2021.

Owensboro Health is the second health system Optum has contracted with for billing and IT services this year. Last week, Optum announced a similar arrangement with Northern Light Health, of Brewer, Maine. That deal becomes effective in March.

In all, Optum has seven similar agreements across the country with other hospital systems.

The agreement between OH and Optum will not lead to the hospital being acquired, Marsh said.

"We are not selling the hospital," he said.

Later, Marsh said Optum's IT services would set Owensboro Health up for future growth.

Russ Ranallo, OH's chief financial officer, said having Optum manage the hospital's information technology means there will be IT available when needed.

"We have not been immune to labor issues on the IT side," he said.

The market for IT personnel is "very competitive," Ranallo said. There have been similar issues attracting employees to work in billing.

"At one time, we had 20 openings in billing," he said.

Optum has other centers across the country that can handle billing issues at peak hours or when the hospital's billing office is closed, Ranallo said.

Optum will also streamline some of the billing process, such as by shortening the period the hospital waits for payments from insurers needing medical records, Marsh said.

The takeover of IT services by Optum is expected to create an improvement in services for physicians and medical staff, Ranallo said.

For example, Ranallo said, improvements will mean physicians spend less time on paperwork and will have more time for treating patients.

Ranallo said employees transferred to Optum will be supervised by a company official who will come to the hospital, while Optum will report to the hospital. The employees' job duties will not change, he said.

Marsh said, "We want every team member to stay with us."

When asked if issues collecting medical bills led to the agreement with Optum, Ranallo said, "We have had an acceptable performance. I want it to be great."

Having more access to IT professionals through Optum will allow OH to make system improvements.

In the past, when upgrades were available, hospital officials had to determine if there were IT resources available to implement the system and train staff, Ranallo said.

When asked what benefit patients would see from the agreement, Ranallo said, "nothing immediately," but long term, the use of the patient portal MyChart would be improved. MyChart provides patients access to medical records and allows them to schedule appointments.

An OH press release on the agreement says having Optum manage the revenue cycle will simplify the process "so team members can spend more time communicating with patients and less time dealing with repetitive tasks," which creates "a transparent, patient-friendly bill experience" that will resolve issues quickly.

The hospital system already has similar agreements for other contract services, such as dietary services, Marsh said.

"This is happening all across the country," he said. The agreement with Optum "gives us the independence to stay independent."