The Biden administration has ushered in a new era of active anti-monopoly law enforcement in both its words and deeds. In less than a year, government leaders cancelled previous antitrust guidelines, sometimes without clear replacements, and stopped pending mergers. It is difficult to judge such a broad policy change, but in at least one recent case, the new strong supporters of antitrust seem to be on the side of common sense.
This case involves Optum acquires Change Healthcare for USD 13 billion, A fast-growing subsidiary of the healthcare and insurance giant UnitedHealth Group. According to Citi, Change provides billing and payment processing services to more than 2,000 payers and 1 million providers, making it the largest independent health IT service provider for insurance reimbursement and revenue cycle management.
The U.S. Department of Justice (DOJ) set up a barrier in March, worried about the potential anti-competitive nature of the merger, and filed a request for data that both parties had already filed Just complied, Agreed to delay for 120 days. For all parties involved, the reason for the merger is clear: Change’s data and analysis platform will strengthen Optum’s own data analysis capabilities and consolidate Optum’s dominant position in this field. The combined entity will be able to provide better services to suppliers and payers by integrating key processes, thereby giving Optum an advantage over existing competition in terms of revenue cycle and payment management services.
The two companies stated that Change brings “key technology, connectivity, and advanced clinical decision-making, administrative and financial support capabilities”, while Optum provides complementary “modern analysis, comprehensive clinical expertise, innovative technology, and improved operational capabilities.” And rich experience in clinical performance.” In theory, the result of this combination will lead to “better health outcomes and experience for everyone at a lower cost”.
Like the US Department of Justice, it is understandable that competitors, state attorneys, and other industry bystanders are not so excited.Association representing 21,000 independent pharmacies Claim that this deal will “Create an unfair competitive advantage for companies that are already dominant.” American Hospital Association Pointed out earlier that this transaction It will enable UnitedHealth Group to have greater ability to support its own UnitedHealthcare plan rather than competitor’s plans, the tendency to increase patient prices, and the ability to use Change’s sensitive data set to squeeze competitors.
What needs to be clear is that: Change’s customers are both payers and providers. In the process of providing billing and payment management services, Change will see the rates paid by competing payers to provider organizations and the premiums they charge to customers. These data and the software platform developed by Change will give UnitedHealthcare an advantage over competing payers in terms of negotiation with suppliers and competitive pricing of group and individual insurance policies.
Despite the signs of cooperation, if the DOJ files a lawsuit to prevent the merger (which will not surprise me), they will be able to establish a strong case against the new anti-competitive entity. After all, this is the largest payer in the United States, seeking to acquire the largest billing and payment management service provider in the United States. Far from reducing consumer costs, it is hard to imagine that competition between health IT and revenue cycle management services will decrease. Coupled with the increased influence of UnitedHealthcare in contract negotiations with hospitals, in addition to spending more money on consumers, Nothing can be done.
“The agreed large-scale divestiture clause,” AHA’s general counsel added, “does not provide the necessary means to remedy the possible major violations of the transaction; on the contrary, it strongly suggests that the transaction cannot be’fixed’.”
Although both parties have stated that they have “proved substantial compliance with the DOJ,” the case against this merger is still strong enough to require serious consideration and may even be an injunction. In an increasingly tight antitrust environment, Optum may need to accept smaller acquisitions while organically adding any additional capabilities.
Photo: Gearstd, Getty Images
