UnitedHealth Group is pushing beyond its status as one of Brazil’s largest health insurers to become a bigger hospital operator in South America’s most populous nation.

The Minnetonka-based company is in the process of buying a hospital in the Brazilian city of Sao Paulo, reportedly for about $350 million.

The deal, disclosed by the company during an investors conference last week, comes three years after UnitedHealth said it was acquiring a majority stake in Amil Participacoes, Brazil’s top health insurer, for $4.9 billion.

At the time, Amil operated 22 hospitals and nearly 50 ­clinics. Growth on the hospital side of the operation is seen as the key to ramping up a Brazilian business that analysts say hasn’t grown as expected.

“We’ve been pretty actively acquiring hospitals and care delivery assets …” said UnitedHealth Chief Financial Officer David Wichmann, during the company’s investors conference in New York. “We’re becoming more of a health care delivery business in Brazil with an insurance arm.”

About three-quarters of Brazil’s roughly 200 million citizens rely on the state’s public health system, with the remainder covered by private health insurance, according to a 2014 report from consulting firm Deloitte.

The country has the second largest private health insurance market by population in the world, Deloitte said, behind the United States.

U.S. companies have been investing a lot in Brazil’s health care system.

Last year, Boston-based Bain Capital said it would acquire a health insurance company based in Sao Paulo, which is Brazil’s largest city. Denver-based DaVita Healthcare Partners, a larger operator of U.S. dialysis centers, announced this fall plans to establish operations in Brazil.

In April, the New York private equity firm The Carlyle Group bought a stake in Brazil’s second-largest hospital operator, with Reuters reporting the price tag at $600 million. Currently, UnitedHealth Group’s hospital holdings make it Brazil’s third largest, said Enrico de Vettori, a Deloitte consultant.

The largest hospital operator in the country, De Vettori said, is a religious organization that hasn’t been a target for foreign investors. Early this year, Brazil passed a law allowing outside ownership of its hospitals.

“That’s what really has increased the interest in hospitals and clinics and providers in Brazil,” De Vettori said.

UnitedHealth Group is the largest health insurer in the U.S., providing commercial or government coverage to some 42 million people.

The company’s international health insurance business covers another 4 million people, down from about 4.8 million people at the end of 2013.

Turmoil in the Brazilian economy has downsized the ranks of those with Amil’s employer-sponsored coverage, said Sheryl Skolnick, an analyst with Mizuho Securities USA. Amil has lost some market share, as well.

Revenue for the business is down for 2015, Skolnick said, and is expected to shrink further next year as economic and political struggles continue.

“That’s not a success,” she said. “It is a disappointment that they have to turn a business around.”

Even so, Skolnick believes it makes sense for UnitedHealth Group to keep growing in Brazil. Amil continues to generate operating income, she said.

“In the near term, my expectations are, shall we say, muted,” she said. “It’s potentially a good opportunity for them over the long term.”

During investors day, UnitedHealth Group officials talked about developing international operations as a complement to the company’s two primary businesses — selling UnitedHealthcare insurance policies in the U.S., and providing health services for a fee to insurers and health care providers through its Optum division.

Beyond Brazil, UnitedHealth Group wants to do more international work for government-run national health programs, such as the health service in the United Kingdom. Optum wants to capitalize on the reputation it built by performing emergency fixes to the U.S. government’s HealthCare.gov website in 2013.

“International businesses are expected to be the third pillar of growth in addition to UnitedHealthcare and Optum,” wrote Ana Gupte, an analyst with Leerink, in a note to investors. With public-private partnerships being developed by Optum and Brazil, Gupte wrote, the international business is expected to generate $1 billion to $2 billion in operating earnings over the next few years.

UnitedHealth Group is in the process of acquiring Hospital Samaritano, Wichmann said. The firm would not comment on the acquisition price, but Brazilian news reports in November put it about $350 million.

UnitedHealth Group currently has 31 hospitals in Brazil, the company says, adding that revenue is growing after adjusting for currency fluctuations.

In the United States, efforts to make the health system more efficient include steering patients away from ERs when they don’t need that level of care. But in Brazil, hospitals and their emergency rooms remain the initial point of access to care for many patients, he said.

“Until that health care system is made more efficient, which we think we can do over time, that’s … the centerpiece of health care delivery,” Wichmann said.

Some of UnitedHealth Group’s hospitals in Brazil are vertically integrated, meaning most patients also have health insurance from the company. But United also has what Wichmann described as “market rate hospitals,” which treat patients covered by various insurers.

Hospital Samaritano is in the latter category, said De Vettori of Deloitte.

It’s become increasingly difficult to make money selling health insurance in Brazil, De Vettori said, because an aging population has more chronic illness and is generating more claims. But margins in the hospital business, he said, aren’t under as much pressure.

Hospital Samaritano is a midsize hospital in Brazil, De Vettori said, with 200 to 300 patient beds. He described the medical center as “a crown jewel” in the country.

“The Brazilian health care market is expensive, large and in need of improvement …,” De Vettori wrote in his 2014 report for Deloitte. “One great challenge for the public health care sector is to strengthen public-private partnerships to expand care, improve facilities and increase efficiency.”


Twitter: @chrissnowbeck