February, 24 2022, 11:59am EDT
Government Takes Strong Action Against Harmful Consolidation by Opposing UnitedHealth-Change Merger
Joint federal-state lawsuit to block merger is important step forward to restore anti-merger law.
WASHINGTON
The Open Markets Institute applauds the Justice Department and the Attorneys General of Minnesota and New York for suing to stop UnitedHealth Group's (UnitedHealth) $13 billion merger of Change Healthcare (Change).
UnitedHealth is a diversified health care giant. It is, among other things, the largest health insurer in the United States, a major healthcare provider, an operator of a major pharmacy benefit manager, and an electronic data interchange that providers and insurers use to process claims. Change is the largest electronic data interchange in the country and, as the complaint states, "connects 5,550 hospitals, 900,000 physicians, and 2,400 government and commercial health insurers."
As the government suit alleges, UnitedHealth's acquisition of Change Healthcare is deeply concerning for multiple reasons. It represents a major data grab. Through the proposed acquisition, UnitedHealth would gain access to the claims data of rival insurers and give it an unfair competitive advantage in the health insurance market. Further, a bulked-up UnitedHealth would have a monopolistic position in the electronic data interchange market. It could use this enhanced power to raise claims processing rates to competing health insurers to boost its own bottom-line and to impede rivals' ability to compete against UnitedHealth's insurance plans.
In response to the joint federal-state action to stop this harmful merger, Open Markets' legal director Sandeep Vaheesan said:
"The Justice Department and Attorneys General of Minnesota and New York deserve great credit for seeking to block this harmful consolidation in healthcare. UnitedHealth and Change are already leading players in key healthcare markets. A combined United-Change would have extraordinary power to thrive at the expense of patients, providers, and rivals.
"Federal and state antitrust enforcers also deserve applause for reviving the Clayton Act's prohibition on mergers and acquisitions that "tend to create a monopoly" and the longstanding "structural presumption" against mergers among rivals that unduly concentrate markets. This case represents an important strike against corporate consolidation and a step forward in the ongoing federal effort to resurrect the strong anti-merger law that Congress enacted."
The Open Markets Institute works to address threats to our democracy, individual liberties, and our national security from today's unprecedented levels of corporate concentration and monopoly power. By combining policy, legal, and market structure expertise with sophisticated communications and outreach efforts, Open Markets seeks not only to hold today's monopolies accountable for abuse of power, but to rebuild an economic system where progress is easier to achieve, because power is far more widely and equitably distributed
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