Atrius Health, the largest independent physicians network in Massachusetts, has reached a deal to become part of Optum, the latest in a succession of consolidations in the state’s health care market.
Under the deal, which needs approval from regulators, the nonprofit Newton-based physicians group would become a division of a national for-profit behemoth and significantly expand Optum’s footprint in Massachusetts. Optum includes the health care provider arm of UnitedHealth Group.
“They will enable us to be a better version of ourselves,” Dr. Steven Strongwater, chief executive of Atrius, said Tuesday. Optum “will make investments in the kinds of things that will improve patient experience. . . . And we believe it will be very helpful for the Commonwealth because they will help us continue to drive down the total cost of care.”
Atrius officials said patients should not notice any immediate differences: The health care providers and leadership at the organization would stay in place, as would the Atrius name.
The Atrius network, which includes the Harvard Vanguard practices, is made up of about 715 doctors serving about 745,000 patients.
The move to join a larger organization is a shift for leaders at Atrius, who in 2019 said they explored their options but opted to remain independent.
The market has since changed. Tufts Health Plan and Harvard Pilgrim Health Care merged into one insurance company at the beginning of 2021, and Beth Israel Deaconess Medical Center and Lahey Health are now two years into a merger that created a second major hospital system in Massachusetts.
The state’s largest hospital group, Mass General Brigham, is seeking to expand with new outpatient clinics and surgery centers and a new tower at its flagship Massachusetts General Hospital.
Atrius, meanwhile, has lost about 100 doctors over the past two years and has struggled to draw new patients, particularly during the COVID pandemic, which has challenged physician practices.
Revenues at Atrius plummeted as most routine medical care was canceled at the start of the pandemic, and the organization furloughed 1,100 people. When their jobs were restored, some employees were unable to return to work because of child care and other issues, Strongwater said.
“We could have gone it alone,” he said. “What we were trying to do is to reset to make sure that in the long run we would be secure for our patients, for our providers.”
Atrius officials said they signed a definitive agreement with Optum on Monday. They did not disclose the terms of the transaction and said they will soon file their plans with government agencies and regulators, including the Massachusetts Health Policy Commission, the Department of Public Health, Attorney General Maura Healey’s office, and the Federal Trade Commission.
Officials in the attorney general’s office said Tuesday that they’re aware of the planned acquisition and have begun their review.
“Optum really felt like the choice that could help us stay true to our core [and] retain our identity,” said Dr. Laura Lee, a pediatrician who chairs the Atrius board. “It helps us keep doing what we’re doing, but gives us access to more resources.”
Officials at Optum declined to comment.
Two years ago, Atrius and the state’s largest health insurer, Blue Cross Blue Shield of Massachusetts, signed a payment contract that Atrius officials described as important for their financial stability. It’s unclear how the Optum transaction would affect Atrius’s relationship with Blue Cross.
Amy McHugh, a spokeswoman for Blue Cross, said regulators should carefully review the Atrius-Optum deal.
“In Massachusetts, we have made significant strides toward controlling health care costs while continuing to ensure that our residents have access to high-quality care,” McHugh said. “This proposed transaction should be evaluated on whether it will continue or constrain this progress.”
Atrius, unlike other large physician groups, is not part of a hospital system.
David E. Williams, president of the consulting firm Health Business Group, said joining Optum would allow Atrius to more aggressively compete with Mass General Brigham (formerly Partners HealthCare) and Beth Israel Lahey.
“With Optum’s backing, Atrius should be able to level the playing field,” he said. “Optum’s ownership will make Atrius less responsive to local needs, but the tradeoff will be worth it if it means Atrius can compete effectively with Partners and BI Lahey.”
Optum’s network has more than 53,000 doctors across the country, including Worcester-based Reliant Medical Group, which was once part of Atrius.