Healthcare News of Note: UnitedHealth Group can proceed with Change Healthcare purchase after a favorable decision in an antitrust case

• UnitedHealth Group has been cleared to complete its acquisition of Change Healthcare, with a federal judge saying the government did not prove the transaction would violate antitrust law.
• An inability to gauge whether patients have experienced discrimination during their treatment or received culturally competent care is a major drawback of most standard patient satisfaction surveys.
• Homebound older adults use more hospital-based care and less outpatient care than the non-homebound, contributing to higher levels of Medicare spending.

Over the last few weeks, I have found these industry news stories that should be of interest to healthcare finance professionals.      

1. Judge says antitrust arguments against UnitedHealth Group/Change Healthcare combination aren’t compelling

UnitedHealth Group’s $7.8 billion acquisition of Change Healthcare can move forward after a federal judge ruled against the U.S. Department of Justice (DOJ) in an antitrust suit. 

“The court concludes that the government has not met its burden of proving that the transaction is likely to substantially lessen competition in the relevant markets,” Judge Carl J. Nichols of the U.S. District Court for the District of Columbia stated in a Sept. 19 written opinion.

Change Healthcare will be integrated with Optum Insight, a UnitedHealth Group (UHG) subsidiary company that offers first-pass claims-editing services. In a court filing, UHG said Change will bring “a scaled transaction network built on extensive payer and provider connections, which complements Optum’s advanced payment integrity analytics and content, as well as Optum’s revenue cycle management solutions.” 

Among other benefits to the industry, UHG said providers would experience fewer claims denials as a result of the deal.

DOJ had sought an injunction to stop the combination, arguing, in part, that it could create a monopoly in the market for first-pass claims-editing solutions.  

The court noted that UHG previously had reached a formal agreement to divest ClaimsXten, Change’s first-pass claims editing product, to a private-equity firm for a reported $2.2 billion after completing the Change acquisition. Evidence at the trial established that the firm will invest substantially in the ClaimsXten business, wrote Nichols (a Trump appointee).

“The evidence demonstrates that the divestiture will restore the competitive intensity lost because of the acquisition,” he wrote. 

Another aspect of the government’s argument was that UHG’s acquisition of Change’s electronic data interchange (EDI) clearinghouse would give UnitedHealthcare prohibitive advantages over other health plans.

However, Nichols wrote, “The evidence adduced at trial established that, for it to be likely that the proposed acquisition would substantially lessen competition, United would have to uproot its entire business strategy and corporate culture; intentionally violate or repeal longstanding firewall policies; flout existing contractual commitments; and sacrifice significant financial and reputational interests. 

“The government has failed to show that United’s post-merger incentives will lead it to take such extreme actions. Nor has the government put forward real-world evidence that United’s rivals are likely to innovate less out of fear that United will poach their data. No payer witness made that claim; in fact, all the payer witnesses testified to just the opposite.”

DOJ has not said whether it will appeal the ruling but did say it’s “reviewing the opinion closely to evaluate next steps,” according to a statement attributed to Jonathan Kanter, assistant attorney general for the Antitrust Division. 

— Nick Hut, HFMA senior editor

2. Most healthcare customer satisfaction surveys fail to address racial and ethnic inequities

An inability to gauge whether patients have experienced discrimination during their treatment or have received culturally competent care is “a major oversight” of most standard patient satisfaction surveys, according to a Sept. 8 KHN article.  

In the story, author Rae Ellen Bichell shares insights from several experts, including Kevin Nguyen, a health services researcher at Brown University School of Public Health, “who parsed data collected from the government-mandated national surveys in new ways, [and] found that — underneath the surface — they spoke to racial and ethnic inequities in care.”

“Digging deep, Nguyen studied whether patients in one Medicaid managed-care plan from ethnic minority groups received the same care as their white peers,” Bichell wrote. “He examined four areas: access to needed care, access to a personal doctor, timely access to a checkup or routine care, and timely access to specialty care.”

According to the article, Nguyen noted that “worse experiences across the four measures” were reported by Black, Asian American, Native Hawaiian and Pacific Islander, and Hispanic or Latino beneficiaries.

What can healthcare organizations do?

In the article, Nguyen suggested ways for healthcare organizations to accrue and report data that meets “the needs of all versus some patients,” including via the following recommendations:

• Consumer Assessment of Healthcare Providers and Systems surveys should ask “why it was more difficult to get timely care, or why they don’t have a personal doctor.” 
• CMS should not only publicly post aggregate patient experience scores but also show “how those scores varied by respondents’ race, ethnicity, and preferred language.” 

3. Higher levels of overall Medicare spending are incurred by homebound adults, study says

“Understanding the healthcare needs and costs of homebound older adults is vital to health policy priority setting and shaping the future of long-term care,” according to authors of study results published Aug. 9 in the Journal of General Internal Medicine.

The authors wrote: “Homebound older adults use more hospital-based care and less outpatient care than the non-homebound, contributing to higher levels of overall Medicare spending.  

“Overall, homebound observations incurred $21,923 in Medicare spending per year on average, in comparison to $10,577 for non-homebound observations.” 

Study results

Results of the study show that compared with non-homebound individuals, homebound people are more likely to have higher annual rates for:

• An inpatient admission (39.8% versus 19.8%)
• An ED visit (54% versus 32.6%)

Also, compared with the non-homebound, homebound individuals had lower annual unadjusted rates of: 

• Accessing primary care (60.9% versus 71.9%)
• Accessing specialist care (61% versus 74.9%)  

The authors’ calculations were based on the 2011-2016 National Health and Aging Trends Study linked with Medicare fee-for-service claims data for adults 70 years and older. Homebound status was defined as not leaving home more than one day per week in the last month.

HFMA bonus content

Read the Sept. 23 article “Surprise-billing arbitration updates include a lawsuit and new context on rate-setting approaches” by Nick Hut, senior editor.

Read the articles in the online version of the September issue of hfm magazine.