UnitedHealth Sells Interest in Florida WellMed Clinics to TPG

UnitedHealth Group Inc. has sold an interest in some of its Optum Health operations in Florida to private equity company TPG Inc. as the health conglomerate is working to recover from a collapse in profits last year.

“We didn’t need the dollars, we have the dollars to invest, but we needed the focus and somebody that could actually work with us locally,” UnitedHealth Chief Financial Officer Wayne DeVeydt said in an interview with Bloomberg News. Working with TPG will allow the business to grow more quickly than it would be able to if UnitedHealth were running everything while also executing a broader turnaround, he said.

UnitedHealth is in the midst of reorienting its business after it unexpectedly reported disappointing profit last year, driven by failures in its Optum Health division, which runs the medical clinics. Optum Health’s operating margins were negative that year as healthcare costs rose and federal policies restricted payments. The company replaced its chief executive officer and other leaders in the wake of the weak results.

Optum Health margins will be around 2% this year, higher than previously expected, because the company is rolling out programs more quickly, DeVeydt said. Margins should increase to around 4% in 2027 and 6% the following year, he said.

The Florida clinics are part of Optum’s WellMed business, which focuses on healthcare for older people. The Optum clinics also treat injured workers and are part of the larger Optum division that provides services for workers’ compensation and no-fault auto insurers and employers.

UnitedHealth is opening about 15 clinics a year in Florida, DeVeydt said. The Optum WellMed TPG partnership started within the last year.

“We actually brought in a partner so we could make some more investment in the market and be positioned for strategic growth,” Optum Health CEO Krista Nelson said.

TPG also bought Optum UK, a different UnitedHealth subsidiary, earlier this year, according to media reports. UnitedHealth said the sale of Optum UK generated $400 million for the United Health Foundation.

TPG declined to comment.

UnitedHealth also expects to reaffirm its financial guidance Wednesday at an investor conference hosted by Wells Fargo & Co., DeVeydt said.

Photo: Photographer: Ben Brewer/Bloomberg