UnitedHealth Group shuffles top executives

Minnetonka-based UnitedHealth Group announced Friday the retirement of Steve Nelson, chief executive of the company's UnitedHealthcare health insurance business, and a reshuffling of C-suite executives at Minnesota's largest company.

Dirk McMahon, chief operating officer at UnitedHealth Group's Optum division for health care services, was named the new CEO of UnitedHealthcare, which is the nation's largest health insurer.

Daniel Schumacher, chief operating officer at UnitedHealthcare, shifts to the same title within Optum. His new job includes oversight of Optum's division for data, analytics and technology.

"We are deeply grateful to Steve Nelson for his 15 years of service," said David Wichmann, UnitedHealth Group chief executive, in a statement.

Nelson, 61, addressed a meeting of the Economic Club of Minnesota in February and described how UnitedHealthcare is trying to lead a transformation in health care. He noted how online services have transformed the retail and entertainment sectors and described the company's steps toward change in health care.

UnitedHealthcare requires providers to obtain prior authorization for certain health services, Nelson said, to make sure that proposed treatments are based on evidence and are cost-effective. The company receives 77 million prior-authorization requests per year, he said, adding that 90% of them are submitted by Fax technology.

"When's the last time anybody's received a Fax?" he asked a crowd of more than 100 people. "We get them all the time."

In response, UnitedHealthcare is moving to online, real-time approvals for the requests that also give providers extra information to help them care for patients.

"Those are transformative things," Nelson said. "They don't seem big, but they're worth a lot of time, it's better care and it's worth millions and millions of dollars if we can do that across the system."

Nelson noted that UnitedHealthcare over the past year has become a bigger player in the Minnesota health insurance market. The company on Jan. 1 started providing Medicare Advantage plans in Minnesota and also has launched plans for fully insured employer groups in the state.

"We have a lot invested in Minnesota," Nelson said, "and we expect that to grow."

As of March 31, UnitedHealthcare provided coverage to 43.6 million people in the U.S.

For several years, the Optum business has been growing at a faster rate than the legacy health insurance business. This month, Optum closed on its $4.3 billion acquisition of DaVita Medical Group, a deal that adds about 225 clinics in five states to the company's growing network of outpatient health care providers.

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck