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United’s power play

An American Prospect April 5 story calls out how United/Optum’s acquisition of Change would upend the balance of power in healthcare.

As UnitedHealthcare continues to make bold moves—acquiring here, consolidating there—it’s managing to become the biggest health insurance entity in the known universe. As we’ve reported on several times, its health services subsidiary, Optum, recently made a bid to acquire Change Healthcare, a health tech company centered around data analytics.

The data that Change has access to is both confidential and extremely valuable. It encompasses not just information about patients, providers, and other insurers, but the myriad connections between them. If Change is folded into the Optum family, many are worried that this data would no longer be under the protection of a neutral, independent party (which Change currently is). Instead, it would be supervised by Optum, which includes the data analytics arm of the biggest health insurance entity in the known universe.

And there’s a bit more to the story. Optum also operates OptumRx, a pharmacy benefits manager (PBM), as well as Optum Bank, which provides patient loans. With all that and more going on under the hood at Optum, it’s not hard to see why the health data landscape would be fundamentally, um, changed, if the acquisition goes through. As the Prospect article says, “if the acquisition proceeds and Change is owned by UnitedHealth, the largest health care corporation in the U.S. will own the ability to peek into the book of business for every insurer in the country.”

Change’s board of directors is behind the merger, while, in the other corner, the American Hospital Association has broken its usual silence on such matters to come out against it. The AHA warns that the acquisition “will concentrate an immense volume of competitively sensitive data in the hands of the most powerful health insurance company in the United States, with substantial clinical provider and health insurance assets.”

The deal isn’t a lock. It still has to be approved by the Department of Justice, and there’s a new wrinkle that may sway the DOJ. An article in Bloomberg Law points out that a pension fund, which happens to be a Change shareholder, just sued Change, contending that execs were promoting the merger in order to line their own pockets while shortchanging shareholders. The suit contends: “While insiders are receiving significant and unique financial benefits from the proposed transaction, Change stockholders are being left with an unfair price for their shares that fails to reflect the company’s strong growth prospects.”

The voices speaking out against this deal are making a lot of good points. We hope the DOJ and others are listening.

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