What if there was an opportunity to make the biggest health insurance conglomerate in the United States even more powerful by equipping them with boatloads of sensitive health data?
Imagine no more. In January 2021, UnitedHealthcare (United) subsidiary Optum announced its intention to purchase the tech company Change Healthcare (Change) for $13 billion. For background, Change Healthcare is an enormous administrative network that processes claims and medication requests for physicians and pharmacies. In other words, it’s a “whole lotta data.” With the acquisition of the tech company, United gains access to a significant store of providers’ financial and clinical data, accelerating and supporting the expansion of its provider business.
The purchase was not without a lot of scrutiny, however (and rightly so). By spring of 2021, the Department of Justice (DOJ) was already looking into the acquisition after the American Hospital Association (AHA) raised concerns over antitrust behavior.
There have been several concerns flagged since then:
- The AHA worried this purchase could squelch competition for the sale of healthcare IT services to other providers. The AHA was also concerned that the acquisition would put a sizable portion of the country’s healthcare data into the hands of a single entity. (Umm, we agree.)
- The DOJ asserted that UnitedHealth Group’s most recent conquest would raise costs and harm competition in not only health insurance markets, but also technology used by health insurers to process insurance claims and reduce healthcare costs.
As expected, providers are also expressing concerns. The reason? Change owns InterQual, a clinical decision-making tool that leverages artificial intelligence (AI) to help providers and clinical staff determine the right level of care and most appropriate resources. Because United has a reputation for being in the business of denying claims (like mental health care) and making seemingly arbitrary calls about what constitutes medical necessity, some worry that they will manipulate the InterQual algorithm.
In other words, once United owns Change, they may no longer have to wait until care is delivered to deny the claim; they could move further upstream and ensure that the care isn’t delivered in the first place.
It’s all a lot of “mights” and “maybes,” but a recent article in ProPublica gets a little more grounded –
United’s own internal documents showed that the consultants they hired to evaluate the deal admitted “that UnitedHealth could ‘utilize transactions intelligence’ from Change’s claims data to ‘optimize benefit design’ for UnitedHealthcare.”
In addition, “Change’s data could yield ‘improved medical policy and benefit design’ for UnitedHealthcare, the deal team wrote in a subsequent memo.”
But even after being presented with evidence that United had discussed using Change’s data to gain a competitive advantage, the judge accepted United’s claims that the company would never do such a thing.
The judge more or less said, “I’ll take your word for it…” and the deal is moving ahead.
All despite the fact that United’s CEO Andrew Witty made it clear that data analytics are central to a sweeping vision to place United at the center of almost any healthcare transaction in the U.S.
Looks like United’s ‘evil empire’ is getting some more guns in its arsenal, but when the consequences come back on consumers, don’t say we — and the DOJ, and the AHA, and providers everywhere — didn’t warn you.
