Federal lawmakers, including Sens. Elizabeth Warren and Edward Markey (both D-Mass), urged the Federal Trade Commission and the Justice Department to heavily scrutinize UnitedHealth Group subsidiary Optum's proposed acquisition of Steward Health Care's physician group and block the deal if it gives UnitedHealth Group too much market power.
Optum Care in March proposed to acquire all of Steward Health's physicians across nine states. Warren, Markey and others raised concerns the deal would reduce competition in the area and give UnitedHealth Group more of a monopoly in Massachusetts and other states.
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Both organizations' initial filings said the deal is expected to occur within the second quarter of this year. The Massachusetts Health Policy Commission is still reviewing the deal's potential impact.
Massachusetts representatives and senators said in a letter to the FTC and Justice Department on Friday that Dallas-based Steward's possible closure of nine hospitals across the state is not a reason to let the deal go through. Steward Health recently sold five hospitals in Utah and announced plans to close hospitals in Texas and Massachusetts following the exit of its private equity owner from the system in 2020.
Allowing UnitedHealth Group to have a potential monopoly in Massachusetts "may do more harm than good in the long run," according to the letter.
"The company has amassed a bevy of vertically-integrated companies across all segments of the health care system, including owning the nation’s third largest pharmacy benefit manager, the largest claims processor, a revenue cycle management company, chart review companies, a bank, and numerous home health care facilities," the letter said. "But of particular concern in this case is UnitedHealth’s physician group, Optum, which employs or maintains affiliations with 10 percent of all physicians in the United States."
The lawmakers said the deal could hurt the quality of care if physicians have to limit their network participation, cut services and see more patients per day as a result.
The FTC's update to its merger guidelines from December should be the lens through which the agencies conduct a close inspection of the deal and step in to block it if necessary, the lawmakers said.
Lawmakers have argued more federal oversight over Steward's previous private equity transactions may have prevented its ongoing debts to vendors and rent, and they pushed back on private equity's role in the healthcare industry. The lawmakers argued more private equity involvement could lead to more hospitals closing due to financial instability, meaning a substantial loss of access to care.
The health system declined to comment, and UnitedHealth Group and Optum did not respond to interview requests.
