Experts Predicted Optum Closing Its Virtual Care Business

Optum, a virtual care business owned by UnitedHealth Group, is shutting down after a three-year run, leaving industry experts unsurprised. The closure reflects broader trends in the telehealth market, where saturation and differentiation challenges are causing providers to struggle. Optum’s virtual care unit offered virtual urgent and primary care visits and prescription refills across all 50 states, founded in April 2021 during the height of telehealth enthusiasm.

Former CEO Kristi Henderson left last June, and news of the closure emerged last week with layoffs at the company. Optum confirmed the news, stating virtual care will remain a core part of their integrated care delivery model. The decision comes as telehealth hype wears off, with data showing a decrease in virtual visit volume since 2021.

Experts believe successful virtual care companies will focus on personalized patient experiences and niche community needs, adapting to a hybrid care model. Optum’s closure is not unique, as other providers like Teladoc Health and Amwell have also faced significant job cuts. Define Ventures Partner Chirag Shah emphasizes the importance of personalizing the patient experience for success in the post-pandemic market.

While telehealth adoption has decreased compared to the pandemic peak, usage remains higher than pre-pandemic levels. Providers like Folx Health, tailored to the LGBTQ+ community, offer a differentiated experience. Optum’s lack of niche patient focus may have contributed to its closure, as healthcare leaders emphasize the importance of optimizing the patient experience in a competitive market. UnitedHealth Group’s strategic adjustment may indicate a shift towards a more tailored and seamless virtual care service.