UnitedHealth / Change Healthcare Merger: Could This Time Be Different?
This month the Department of Justice (DOJ) meets UnitedHealth Group in court in an attempt to block the latter’s planned acquisition of Change Healthcare, not so much a healthcare company as a healthcare software company, whose value lies in its claims transmission and payment information services. Change Healthcare would ostensibly fold into UnitedHealth’s smaller data division, OptumInsights.
It can sound pretty ho-hum if you’re not one to play in the weeds of healthcare claims transmission, but what it basically means is this: if UnitedHealth were to take ownership of the largest patient data claims company in the U.S., it would own and have access to millions upon millions of patients’ claims data — and that of its competitors. It would own what it shouldn’t — your data, ours, and that rightfully belonging to its competition.
Why would UnitedHealth want Change’s data? For competitive advantage, of course. $13.8 billion is not too much to pay in an industry where consumers’ healthcare care expenditures totaled nearly $4 trillion in 2020.
So of course UnitedHealth is going to fight for this acquisition, saying it won’t do anything insidious with the data and that purchasing Change is really for the good of everyone everywhere.
Like other corporate giants attempting to fill an insatiable hunger for shareholder value and world domination, UnitedHealth promises to “increase efficiency”, “reduce friction in healthcare”, “(produce) a better experience” and “lower costs” (for whom we’re not sure, but we’re just one trope away from winning business bingo). They’ve condescendingly and patronizingly explained in court that the DOJ’s case is built on a “limited understanding” of the healthcare underwriting business and that they can be trusted to do what’s right.
What’s different this time is the DOJ does seem to understand the implications of allowing the largest health insurer in the U.S. to purchase the largest claims processing conduit, and appears to be making a strong case for why the acquisition shouldn’t go through. Unlike the CVS — Aetna merger, in which the judge vociferously claimed the trial wasn’t a rubber stamp process and then allowed the merger to happen at the pace of a rubber stamp process, the DOJ has done a remarkable job of making its case.
Now we await judgment. And we hope, as always, that this time consumers will prevail and one less vertical integration will take place in the healthcare sector.