United Healthcare (UNH) 13 months ago offered $8 billion for Change Healthcare, aiming to combine the Nashville company (CHNG) with its Optum unit to offer software, data analytics and services to the industry.
News reports, including from Bloomberg, at the time said the deal was to be one of the Minnetonka health-care giant's largest acquisitions.
The companies had said in a statement that the combination would "help make health care work better for everyone."
The U.S. Justice Department under President Joe Biden begs to differ. And UnitedHealthcare isn't happy about the agency's reaction.
The View From Minnetonka and Nashville
The deal as United Healthcare and Change envisioned it would "more effectively connect and simplify core clinical, administrative and payment processes, resulting in better health outcomes and experiences for everyone at lower cost."
United Healthcare and Change said in a January 2021 statement that with the deal, clinicians could "make the most informed and clinically advanced patient-care decisions more quickly and easily."
The companies said that "complexities across the health system result in significant level of administrative waste. ... A key opportunity is to enhance with insights drawn from billions of claims transactions using Change Healthcare’s intelligent health care network, combined with Optum’s advanced data analytics. This will support significantly faster, more informed and accurate services and processing."
And "Change Healthcare’s payment capacities combined with Optum’s highly automated payment network will simplify financial interactions among care providers, payers and consumers. ..." This, they said, would ensure that physicians get paid more quickly and accurately and at the same time help consumers simply and conveniently manage their health-care finances.
The Justice Department Says: Here's the Rub
In an effort to block the deal, the Justice Department, along with the attorneys general of Minnesota and New York, has filed a lawsuit in U.S. District Court in Washington.
The transaction, the authorities said in a statement, would "harm competition in commercial health insurance markets as well as in the market for a vital technology used by health insurers to process health insurance claims and reduce healthcare costs."
The deal would give United Healthcare, the largest health-care provider in the U.S., "control of a critical data highway through which about half of all Americans health insurance claims passed each year," Doha Mekki, principal deputy assistant attorney general in the justice agency's antitrust division, said in the statement.
“Unless the deal is blocked, United stands to see and potentially use its health insurance rivals’ competitively sensitive information for its own business purposes and control these competitors’ access to innovations in vital health care technology."
The deal "would eliminate an independent and innovative firm, Change, that today provides a variety of participants in the health-care ecosystem, including United's major health insurance competitors, with vital software and services."
In a statement quoted on Reuters and other outlets, United Healthcare said, "The department's deeply flawed position is based on highly speculative theories that do not reflect the realities of the healthcare system. We will defend our case vigorously."
The New York Times reports that the deal is the latest to be challenged by the Biden administration on antitrust grounds. President Biden last year signed an executive order to boost competition in different industries, the paper reported.
The president has named Jonathan Kanter, a lawyer who has represented large companies, as chief of antitrust efforts at the Justice Department; and he appointed Lina Khan, a prominent critic of big tech, to lead the Federal Trade Commission.
