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AAI says UnitedHealth Group’s acquisition of Change Healthcare could harm competition

Press releases may be edited for formatting or style | May 10, 2021 Business Affairs
The American Antitrust Institute sent a letter to the U.S. Department of Justice Antitrust Division outlining concerns that the proposed acquisition of independent digital healthcare technology rival, Change Healthcare, by UnitedHealth Group (UHG) is likely to harm competition and consumers. Such harm could result from the effects of eliminating competition between UHG’s information and technology-enabled health services subsidiary, Optum, and Change Healthcare. AAI’s letter also states the concern that a larger and more powerful Optum could enhance UHG’s incentives to favor its dominant health insurer, UnitedHealthcare, to the disadvantage of rivals. This letter highlights important issues that arise from the unique characteristics of competition in digital technology markets and, more specifically, in digital healthcare technology markets.

The substantive issues of competition and antitrust analytics raised by UHG’s proposed acquisition of Change Healthcare are summarized below. In light of these concerns, AAI’s letter urges the Antitrust Division to apply careful scrutiny. The U.S. healthcare system is under siege by consolidation and concentration. The current matter provides an important opportunity for the Antitrust Division to move the ball forward on protecting competition in critically important healthcare markets, but also in leveraging its knowledge of digital technology markets and the unique challenges they pose for competition.

1. The proposed acquisition is a takeover of an independent, disruptive digital healthcare technology company by the largest, vertically integrated health insurer in the U.S. Consolidation in the digital technology sector more broadly has flown under the antitrust “radar” for two decades, including significant and rapid consolidation involving data analytics and cloud infrastructure that is at the heart UHG-Change Healthcare acquisition. The Antitrust Division has an opportunity here to address the problematic accretion of market power in digital healthcare technology markets.

2. The timing of the acquisition occurs at the intersection of COVID-19 disruption, rapid growth in digital healthcare technology markets, and high and rising concentration in critical healthcare markets. This confluence of factors highlights the high stakes nature of the Antitrust Division’s investigation into the proposed acquisition of Change Healthcare by UHG/Optum that, among other adverse effects, could stifle innovation in a critical sector.

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