Allina Health, Optum sign 10-year deal for IT, billing services
MINNESOTA, UNITED STATES — Healthcare system Allina Health signed a 10-year deal with healthcare services provider Optum to take over their IT and billing operations.
Allina Health VP and Chief Information Officer Dr. David Ingham said that the deal should help Allina better utilize new technology, such as artificial intelligence and automation, for back-office work.
The agreement will also help trim expenses at Allina after cutting off around 350 jobs last July 2023 amid high labor costs and delayed patient discharges.
Optum will specifically handle what’s called Allina’s revenue cycle management, a process where the health system confirms coverage for health services and then collects payments from health insurers and patients.
However, Ingham also confirmed that no additional staff will be laid off during the deal. Roughly 2,000 Allina employees will transition their employment to Optum starting May 5, with workers retaining their jobs, pay, and office locations.
“If they’re working remotely, they’ll continue working remotely. If they’re on-site at one of our hospitals, one [of] our clinics, or at our headquarters, they’ll continue working there,” Ingham explained.
The deal on IT and bill collection is Allina Health’s second major partnership with Optum in recent years. In January 2020, both companies announced plans to develop a number of ambulatory surgery centers.
The Allina pact mirrors agreements Optum inked recently with Northern Light Health, Owensboro Health, and ProHealth Care. Those deals saw over 2,700 employees transition as Optum took over revenue cycle, IT, and other administrative services.
Industry observers believe these recent deals are part of a trend of consolidating health system back-office functions through partnerships with large players. Optum now employs 220,000 people globally, while its parent company, UnitedHealth Group, posted over $371.6 billion in total 2023 revenues.
