UnitedHealth Will Fight DOJ Move to Block Change Healthcare Deal

UnitedHealth Will Fight DOJ Move to Block Change Healthcare Deal

by Leslie Small and Peter Johnson

The U.S. Dept. of Justice (DOJ) on Feb. 24 sued to block UnitedHealth Group’s proposed $13 billion acquisition of Change Healthcare Inc., arguing that the deal would stymie competition not only in commercial health insurance markets but also the market for technology that allows insurers to process claims and reduce health care costs.

United will put up a fight, but experts aren’t surprised

• UnitedHealth has already indicated that it will challenge the legal action taken by the DOJ and attorneys general from Minnesota and New York.
• “Change Healthcare and Optum together can increase efficiency and reduce friction in health care, producing a better experience and lower costs,” a UnitedHealth spokesperson said in a statement emailed to AIS Health. “The Department’s deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system. We will defend our case vigorously.”
• At least one industry observer indicated he was not surprised by the DOJ’s move.
• “This deal has been in trouble for almost a year now. I noted in November that it is likely to fall through because of the ‘insider advantage’ that UnitedHealth Group would gain as a result,” says Michael Abrams, cofounder and managing partner of the consulting firm Numerof & Associates.
• “The proposal has been problematic since the beginning and third-party finance partners have had plenty of time to brace themselves for this,” he continues. “United will have to settle for something that allows for competition to thrive, something much smaller than they had hoped for.”

How much power over data is too much?

• Antitrust regulators say the transaction would give UnitedHealth too much power over data in a health care industry that is increasingly reliant on such information to power core business capabilities. 
• “The proposed transaction threatens an inflection point in the health care industry by giving United control of a critical data highway through which about half of all Americans’ health insurance claims pass each year,” said Principal Deputy Assistant Attorney General Doha Mekki of the DOJ’s Antitrust Division in the department’s Feb. 24 press release.
• “Unless the deal is blocked, United stands to see and potentially use its health insurance rivals’ competitively sensitive information for its own business purposes and control these competitors’ access to innovations in vital health care technology,” Mekki added.
• Provider groups including the American Hospital Association (AHA) for nearly a year have urged regulators to look closely at the pending acquisition, arguing that it threatens to reduce competition for the sale of health care information technology services to hospitals and other health care providers.

From Health Plan Weekly