Minn. A.G. Ellison Sues to Block UnitedHealth Group Proposed Acquisition of Change Healthcare
Among other anticompetitive effects, United's acquisition of Change would create a "first pass" claims-editing behemoth with a market share of at least 75 percent -- an acquisition that is presumptively anticompetitive and, as the complaint alleges, would be a merger to monopoly. The proposed merger's monopolistic vertical market integration would hurt United's competitors, Change's current competitors, employers, providers, and ultimately consumers, who could see lower-quality service and higher costs from significantly reduced competition.
"My job is to help Minnesotans afford their lives -- and it's already tough enough to do that these days, especially with the rising cost of health care. This proposed merger would increase costs and decrease the quality of healthcare for Minnesotans and all Americans. It would put too much market power and data in the hands of one corporation at so many levels of the health care industry, and that would raise costs and decrease choice for consumers in an already deeply flawed system," Attorney General Ellison said. "Minnesotans and consumers everywhere should have full access to healthcare they can afford -- not have health insurance companies attempting to undermine that through monopolistic market dominance. I am joining the
Harms of the proposed acquisition
United's proposed acquisition of Change would cause significant harm to United's competitors in the healthcare insurance market, with harmful effects on providers, employers, and consumers as well.
The complaint alleges that the acquisition would allow United to use Change's enormous repository of claims data to give it an unparalleled competitive advantage to raise costs for its competitors, deny them the ability to compete fairly with United, and deny them access to innovations or information that could lead to innovations. United's proposed acquisition of Change would allow United to use the competitively sensitive data that Change holds to co-opt rival insurers' innovations and preempt their competitive strategies, reducing their incentives to pursue those innovations and strategies in the first place. It would also allow United to use its control over Change's technologies to disadvantage other health insurers by raising their costs, degrading the quality of their services, and denying or delaying their access to innovations and quality improvements.
According to the complaint (
84, pp. 28-29):
The Proposed Transaction would likely substantially lessen competition and harm consumers in the aforementioned relevant markets in three ways.
* First, by giving United broad access to its health insurer rivals' competitively sensitive information through Change's first-pass claims editing solution and EDI clearinghouse, the Proposed Transaction is likely to substantially lessen competition in the markets for the sale of commercial health insurance to national accounts and large group employers.
* Second, United's acquisition of Change's first-pass claims editing solution and EDI clearinghouse would enable United to raise the costs of its health insurance rivals, reducing their ability to compete with UnitedHealthcare. This would likely substantially lessen competition in the markets for the sale of commercial health insurance to national accounts and large group employers. Post-transaction, United could raise its health insurance rivals' costs through means such as denying or delaying their access to innovations that would provide greater efficiency in claims processing.
* Third, United and Change are the two most significant competitors in the first-pass claims editing solutions market, with a combined market share of at least 75 percent. The Proposed Transaction would eliminate head-to-head competition between United and Change and tend to create a monopoly in that market. The Proposed Transaction is presumptively unlawful under longstanding
Ultimately, the proposed merger would harm not only United's competitors: it would harm employers, healthcare providers, and consumers as well.
*
* Ultimately, these higher costs and lower levels of service would be passed onto
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Attorney General Ellison urges
N.Y. A.G. James Sues to Block UnitedHealth Group's Proposed Acquisition of Change Healthcare
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