UnitedHealth Group's Optum division is pushing into the Middle East with a joint venture it believes will open up a rapidly expanding market for its health IT services.
The company says a partnership with the Abu Dhabi health system Lifeline Hospital Group is just the start in the region for its $25 billion Optum unit, which includes separate businesses focused on technology, wellness and pharmacy benefits.
"We have broader ambitions," said Warren Guillett, CEO and general manager of Optum Middle East, who declined to discuss terms of the deal. "We're making a serious investment. We plan to be here for a very long period of time."
Eden Prairie-based Optum, with a worldwide workforce of 30,000, has the scale of a Fortune 100 company and has been growing at a double-digit pace. It has done business in the United Kingdom and Europe for some time, but this is its first foray into the Persian Gulf and the first time it has built a physical presence on foreign soil.
Many Middle Eastern states are rapidly moving to a U.S.-style approach to health care. Abu Dhabi in recent years has transitioned from a government-paid health care system to one where employers are mandated to provide insurance for their workers.
"Now providers have to respond to a third-party reimbursement environment, similar to U.S., and have found themselves ill-equipped to do that," Guillett said.
In Abu Dhabi, Optum will work with Lifeline to improve its billing and collections processes. Optum will set up coding systems to automate bills when patients are treated and improve Lifeline's ability to collect payment. As part of the deal, Optum absorbed about 100 Lifeline employees, and expects to quickly automate 20 to 25 percent of processes now done by hand, Guillett said.
Lifeline operates four hospitals and nine pharmacies in the United Arab Emirates and Oman.
Optum views the Lifeline partnership as a "laboratory" where it can build a technology system that can be duplicated and tailored to other hospitals and clinics.
But the company aims to make an imprint beyond providers. It also wants to bring its services and technology to insurers as well as government leaders who shape public policy.
It's a sweeping strategy driven by parent company UnitedHealth Group, the largest managed care company by revenue in the U.S., as United seeks ways to expand revenue beyond the maturing U.S. insurance market.
"I don't think there is a limited agenda here," said Jason Gurda, an analyst with Leerink Swann & Co., in New York. "They're open to whatever opportunity that comes up that they can leverage their technology and existing infrastructure."
Other U.S. health systems have a stake in the region, which is seeing rising rates of diabetes, heart disease and other chronic illnesses. The Cleveland Clinic, Johns Hopkins and George Washington University are affiliated with hospitals in Abu Dhabi. Rochester-based Mayo Clinic closed a cardiac clinic in Dubai in 2010, due to the recession.
Optum has been researching the Middle East market since at least 2007. The company will focus first on the six Arab states that make up the Gulf Cooperation Council -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates, Guillett said.
University of Minnesota health care economist Stephen Parente, who did some work for UnitedHealth in the Middle East several years ago, said the benefits go both ways.
"There's a lot of crossover with operations," he said. "When United works with familiar parties and third parties and government agencies, they also are learning new technologies and ramping up expertise that they can apply in the U.S. and reverse-engineer back home."
Jackie Crosby • 612-673-7335