UnitedHealth Group’s OptumCare subsidiary has reached a deal to acquire multispecialty radiology provider Steward Medical Group, those involved said Wednesday.
Part of the larger Steward Health Care hospital system, SMG spans nine states and 450 practices, employing 1,700 providers, according to its website. The medical group’s coordinated model is centered around primary care, with Steward also providing diagnostic imaging services and employing over 180 radiologists.
The Massachusetts Health Policy Commission received notice of the transaction this week. Executive Director David Seltz said local authorities are committed to “rigorous, data-driven oversight” of such healthcare deals.
“This is a significant proposed change involving two large medical providers, both in Massachusetts and nationally, with important implications for the delivery and cost of healthcare across Massachusetts,” Seltz said in a March 27 statement. “Details of the proposal will be reviewed by the HPC to examine potential impacts on healthcare costs, quality, access and equity.”
UnitedHealth Group cannot complete the sale until after the commission’s review, along with any other concurrent analysis by state or federal antitrust authorities. The commission is unable to block the deal but can refer its findings to the state attorney general’s office or Massachusetts Department of Public Health, the AP reported.
The for-profit Steward hospital system is based in Dallas and operates over 30 hospitals nationwide. Steward Medical Group’s practices span Arizona, Arkansas, Florida, Louisiana, Massachusetts, New Hampshire, Ohio, Pennsylvania, Rhode Island and Texas. The company dates to 2010, when private equity firm Cerberus Capital Management acquired the struggling nonprofit Caritas Christi Health Care system. Steward fueled national expansion since 2016 via debt and executed a series of lease-back deals with landlord Medical Properties Trust. Cerberus exited ownership in 2020 but its accumulated debts have left the organization in a precarious position.
Optum and Steward did not immediately respond to AP requests for comment, nor did the organizations post public announcements about the deal. Both of Massachusetts’ Democratic U.S. Sens. Elizabeth Warren and Ed Markey issued statements about the deal.
“After years of gross profiteering and mismanagement, Steward’s latest plan raises more serious questions about the future of the Massachusetts healthcare system,” Warren said Wednesday. “Optum, a UnitedHealth Group subsidiary, is already the largest employer of physicians in the country—controlling over 10% of American doctors—which means this deal raises significant antitrust concerns in Massachusetts and nationally,” she added later.
Steward Medical Group recently posted a notice about billing challenges in radiology, anesthesia and pathology, brought about by a cyberattack on UnitedHealth-owned vendor Change Healthcare.
For more about the transaction, you can read the documents submitted to the state health policy commission. In addition to operating the country’s largest commercial insurance plan, UnitedHealth Group also employs 90,000 physicians and counting. It recently announced plans to acquire the Corvallis Clinic in Oregon, and last year bought Crystal Run Healthcare in New York state.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.