Why would the biggest health insurer in the nation buy a health care data analytics company? More knowledge, more power, more ability to drive profits its way. So, unsurprisingly, UnitedHealth plans to buy Change Healthcare. Will the US Department of Justice allow it and give UnitedHealth even more control of the US healthcare system?
The American Hospital Association wants the Justice Department to stop the purchase because UnitedHealth will have too much “sensitive data.” In this instance, the public should be squarely aligned with the AHA because UnitedHealth will have even greater ability to drive up costs and restrict access to care if this merger goes through.
Krista Brown and Olivia Webb report for The American Prospect that if the Justice Department permits UnitedHealth and Change to merge, it would have serious consequences for doctors, patients and the US health care system. UnitedHealth would have “access to all its competitors’ business secrets.” The merger would allow UnitedHealthcare to steer more people to its own doctors. It could create inequities among people who wanted to buy insurance. It’s likely to undermine the public health further.
UnitedHealth already has over 70 million members in the US, and it has contracts with 6,500 hospitals, and 1.4 million health care providers. Among other things, it owns Optum, a data analytics subsidiary, Optum Rx, a pharmacy benefit manager, and Optum Bank, which gives patients loans. It also owns DaVita’s dialysis doctors.
Through its Optum subsidiary, UnitedHealth is on a path to taking over the US healthcare system single-handedly. UnitedHealth could literally establish a private single-payer entity over time, with the purchase of Change Healthcare.
So what exactly does Change Healthcare do that is so valuable? It is the insurers’ middleman. It reviews the claims doctors submit for payment to determine whether they are legitimate and accurate. Claims they reject are money in the insurers’ pockets. To do its job, Change’s employees know exactly what each entity with which it contracts covers, what each provider bills, and what each insurer pays. In short, Change has mountains of data between doctors and insurers and pharmacies and insurers.
Optum currently performs these services for UnitedHealth. But, a merger with Change would mean that the company that has been independent of UnitedHealth–the only other large company that performs these services–would be owned by UnitedHealth and no longer independent.
Right now, there is a “firewall” between Optum and UnitedHealth to protect against anti-competitive practices. But, as the American Hospital Association argues, it easily could be the case that “sensitive and strategic information sharing” goes on between Optum and UnitedHealth. After all, Optum’s employees work for UnitedHealth and not for its competitors, and they know that.
If Optum merges with Change Healthcare, UnitedHealth will be able to prioritize its physicians and otherwise design its health insurance to look better than its competitors. There’s no evidence that costs would come down; if history and experience are considered, there’s lots of reason to be concerned that costs will go up. Moreover, there is a legitimate fear that Optum’s racially biased data–discovered in 2019 as leading to the possible undertreatment of Black patients– would lead it to discriminate against people of color and poor people and charge them more for their health care.
Let’s hope that the Department of Justice decides that the dangers of allowing this merger outweigh any possible benefits.
Here’s more from Just Care:
- Ten ways Medicare Advantage plans differ from traditional Medicare
- Corporate health insurers profit by condoning fraud
- Billing fraud pervasive in Medicare Advantage
- The wrong choice of Medicare Advantage plan could kill you
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
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