Optum is paying $1.3 billion for the health care business of the Advisory Board Co., a Washington, D.C.-based research and technology firm, in a move that analysts say will give the company a better shot at selling consulting services to hospitals.
Health systems, hospitals and clinics already hire consultants and buy technology from both Advisory Board and Optum, which is the health services division of Minnetonka-based UnitedHealth Group.
But Optum officials say the actual services and client lists at the two companies are fairly distinct, which means each business will have a better chance selling to the other's customers.
Analysts on Tuesday cheered the deal, which has Optum absorbing Advisory Board's debt — and potentially gaining better access to the many C-level health care executives that have relied on Advisory Board over the years.
"The health care division of [Advisory Board] further diversifies Optum and complements OptumInsight with an opportunity to cross-sell," wrote Ana Gupte, an analyst with Leerink, in a note to investors. Advisory Board "has over 4,000 global members (including executives at hospitals and health systems) as clients."
Optum includes everything from urgent care providers and surgery centers to a pharmaceutical benefits management (PBM) company that sells services to health insurance companies. The Advisory Board acquisition will add to the portion of the company known as OptumInsight, which sells help with data and analytics to medical centers and clinics.
Advisory Board's health care business employs about 2,100 people. The consulting firm works with hospitals and other health care companies, mostly in the U.S., to develop industry best practices and boost efficiency.
Health care executives use the company's web-based dashboards to follow everything from their organization's success in collecting medical bills to the profitability of different service lines.
