In both word and action, the Biden administration has ushered in an aggressive new era of antitrust enforcement. Less than a year in, administration leaders have rescinded previous antitrust guidelines, sometimes without explicit replacement, and stopped pending mergers dead in their tracks. It is difficult to cast judgment on so broad a policy shift, but in at least one recent case, antitrust’s new powerful backers seem to be fighting on the side of common sense.

The case in question involves the $13 billion acquisition of Change Healthcare by Optum, the fast-growing subsidiary of the healthcare and insurance monolith UnitedHealth Group. According to Citi, Change provides bill and payment processing services to more than 2,000 payers and 1 million providers, making it the biggest independent provider of health IT services for insurance reimbursement and revenue cycle management.

The U.S. Department of Justice (DOJ) threw up a roadblock in March concerned about the potential anticompetitive nature of the merger and put in a data request which the parties have just complied with, agreeing to a 120-day delay. For the parties involved, the rationale for the combination is clear: Change’s data and analytics platform will bolster Optum’s own data analytics capabilities, solidifying Optum’s dominance in that arena. The combined entity would be able to better serve providers and payers by enabling them to integrate key processes, giving Optum a clear advantage in revenue cycle and payment management services over existing competition.

The companies say that Change brings to the table “key technologies, connections and advanced clinical decision, administrative and financial support capabilities,” while Optum offers  complementary “modern analytics, comprehensive clinical expertise, innovative technologies and extensive experience in improving operational and clinical performance.” The result of the combination, in theory, would result in “better health outcomes and experiences for everyone, at lower cost.”

Like the DOJ, competitors, state attorneys general and other industry onlookers are understandably not so thrilled. An association representing 21,000 independent pharmacies claimed the deal would “create an unfair competitive advantage for a company that is already dominant.” The American Hospital Association noted earlier that the deal would give UnitedHealth Group a greater ability to favor its own UnitedHealthcare plans over those of competitors, an inclination to raise prices on patients, and the ability to use Change’s sensitive data sets to squeeze competitors.

To be clear: Change’s customers are both payers and providers. In the process of providing billing and payment management services, Change sees the rates that competing payers pay provider organizations and the premiums they charge to clients. That data, and the software platforms that Change has developed, would give UnitedHealthcare an upper hand over competing payers in negotiations with provider organizations and in competitive pricing for group and individual insurance policies.

Despite outward signs of cooperation, if the DOJ brings a lawsuit to block the merger, which wouldn’t surprise me, they will be able to build a strong case against the new anticompetitive entity. This is, after all, the largest payer in the U.S. seeking to acquire the largest provider of billing and payment management services U.S. Far from reducing costs for consumers, it’s hard to imagine that a reduction in competition for health IT and revenue cycle management services, combined with increased leverage for UnitedHealthcare in contract negotiations with hospitals, would do anything but cost consumers more money.

“The massive divestiture provision to which the parties have agreed,” the AHA’s general counsel added, “does not provide the pathway needed to remedy the transaction’s likely substantial illegalities; rather, it strongly indicates that the deal cannot be ‘fixed.'”

Despite both parties saying they have “certified substantial compliance” with the DOJ,  the case against this merger is still strong enough to require serious consideration, and maybe even an injunction. In a tightening antitrust environment, Optum will probably need to settle for smaller acquisitions, while growing any additional capabilities it wants organically.

Photo: Gearstd, Getty Images