The American Antitrust Institute on Thursday asked the Department of Justice to apply "careful scrutiny" to UnitedHealth Group's proposed acquisition of Change Healthcare, warning that the move could reduce competition in health IT services, offer the country's largest health insurer an unfair advantage against other payers and raise healthcare prices for patients.
UnitedHealth Group's fastest-growing subsidiary, Optum, announced in January that it would pay $13 billion to acquire Change Healthcare. Analysts predicted that the acquisition would allow Optum to expand its OptumInsight provider business, inform its value-based care initiatives and increase patient engagement.
The American Antitrust Institute worries that the buyout would raise the price of health IT services for other payers and providers and lower the quality of digital healthcare technology, particularly when it comes to protecting consumers' private data. The not-for-profit said the buyout could also allow UnitedHealth Group, which owns the largest insurance company in the nation, to consolidate much of the country's healthcare data and use it to process and deny claims. The organization voiced concern about how the UnitedHealthcare insurance affiliate would use this data to undercut startup competitors.
"Optum could deploy algorithms that create advantages for UnitedHealthcare and disadvantages for rival health insurers," the organization wrote in a letter. "Such an anticompetitive strategy would be very hard for rivals to detect and make it more difficult for them to compete. [The American Antitrust Institute] urges the antitrust division to investigate this possibility that, in addition to harming competition and consumers, would create even higher barriers to entry and stymie growth and innovation."
But Optum and Change Healthcare claim that combining the two firms would improve health outcomes and lower costs.
"Optum and Change Healthcare share a vision for better health outcomes and experiences for everyone, at a lower cost. With distinct and complementary capabilities, this combination will help healthcare providers and payers better serve patients by more effectively connecting and simplifying key clinical, administrative and payment processes to the benefit of the health system and the people we serve," an Optum spokesperson wrote in an email.
The letter follows a March SEC filing by Change Healthcare that said the DOJ had requested more information from both companies about the transaction. The so-called second request will give regulators more time to review the buyout beyond the standard 30-day period.
That same month, the American Hospital Association also sent a letter to the federal agency urging antitrust regulators to investigate the merger over concerns the buyout would reduce competition in health IT services and result in higher prices for providers.
In a letter sent to the DOJ, AHA said that UnitedHealth Group and Change Healthcare sold off hundreds of millions of dollars worth of assets to ward off scrutiny from antitrust regulators. A Change Healthcare SEC filing from early March noted the company may sell off assets if required for antitrust approval. It added that divestitures worth more than $650 million in annual revenue for UnitedHealth Group would represent a "burdensome condition" for the Minnetonka, Minn.-based healthcare giant, potentially threatening the proposed deal
The Biden administration has recently said that it plans to take a more critical eye toward corporate mergers, including in healthcare.
