American Antitrust Institute expresses concern about proposed Optum-Change Healthcare deal

The American Antitrust Institute (AAI) is warning that UnitedHealth Group's planned acquisition of Change Healthcare could stifle competition.

The nonprofit, which advocates for more aggressive antitrust enforcement from the feds, wrote in a letter (PDF) to the Department of Justice (DOJ) that the deal is "likely to harm competition and consumers."

For one, the merger would eliminate a key rival to UnitedHealth's Optum, which operates an analytics arm of its own, OptumInsight. The deal could also lead UHG to favor its own health plan, UnitedHealthcare, over other insurers that may contract with Optum for technology services.

"UHG’s acquisition of Change Healthcare raises a panoply of competitive concerns," AAI wrote. "These include eliminating an important rival in the digital healthcare technology market, but also extending UHG’s market power to other markets in its healthcare ecosystem."

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The companies unveiled the acquisition plan in January, in a deal valued at nearly $13 billion. UnitedHealth said it would purchase Change for nearly $8 billion in cash and $5 billion in debt, which expectations for the deal to close in the second half of this year.

The American Hospital Association also urged DOJ to take a closer look at the acquisition, saying that it would create a "massive consolidation" of healthcare data. DOJ said in late March that it would probe the deal.

AAI added in the letter that while UnitedHealth and Change argue that the merger would lead to increased efficiency and cost savings, similar efficiencies could be realized if Optum reorganized its operations without the acquisition.

"In light of the foregoing concerns, AAI urges the Antitrust Division to scrutinize any claimed benefits surrounding how UHG’s acquisition of Change Healthcare will enable better data analytics, better predictive capability, and enhanced clinical decision-making," the group wrote.

"UHG and Change Healthcare bear the substantial burden of showing that their deal will not only generate such benefits but that those benefits will overwhelm adverse effects on consumers from the loss of vital competition," the organization said.