UnitedHealth EMIS Merger: CMA concerned of Population Health Management dominance by UnitedHealth

Exec Summary:

The proposed merger between UnitedHealth Group and EMIS has raised concerns from the Competition and Markets Authority (CMA) about the impact it could have on competition in the market for population health management services in the UK.

Population health management is the use of data and analytics to improve the health of a population, rather than just treating individual patients. It can involve things like identifying people who are at risk of developing chronic diseases, providing them with preventive care, and monitoring their progress.

EMIS is a leading supplier of population health management services to the NHS. Its products include EMIS Web, which is an electronic patient record system used by GPs, and EMIS Insight, which is a data analytics platform. UnitedHealth is a large healthcare company that also provides population health management services.

The CMA is concerned that the merger could lead to UnitedHealth becoming too dominant in the market for population health management services. This could lead to higher prices for NHS patients and reduced innovation in the sector.

In March 2023, the CMA provisionally found that the merger could substantially reduce competition in the market for population health management services. The CMA is now considering whether to refer the merger to a phase 2 investigation.

If the merger is referred to a phase 2 investigation, UnitedHealth and EMIS will have the opportunity to offer undertakings to address the CMA's concerns. These undertakings could include selling off part of their business or agreeing to certain restrictions on their activities.

The CMA's decision on the UnitedHealth-EMIS merger is expected to be made in August 2023.

Here are some of the potential impacts of the merger on the NHS:

• Higher prices for NHS patients: UnitedHealth could use its market power to raise prices for its population health management services. This would increase the cost of care for NHS patients.

• Reduced innovation: The merger could lead to reduced innovation in the population health management sector. UnitedHealth may be less likely to invest in new technologies and services if it does not face competition from other providers.

• Reduced choice for NHS patients: The merger could reduce choice for NHS patients. If UnitedHealth becomes the dominant provider of population health management services, patients may have fewer options to choose from.

The CMA is carefully considering the potential impacts of the merger on the NHS before making a final decision.

The timetable for the UnitedHealth Group EMIS merger is as follows:

• January 20, 2023: The Competition and Markets Authority (CMA) in the UK launches a Phase 1 investigation into the merger.

• January 20 to February 3, 2023: The CMA invites third parties to comment on the merger.

• March 17, 2023: The CMA announces that it has completed its Phase 1 investigation and is referring the merger for an in-depth Phase 2 investigation.

• April 27, 2023: The CMA publishes a Notice of Extension, extending the deadline for its Phase 2 investigation by 40 working days.

• May 17, 2023: The CMA publishes its Phase 2 decision, finding that the merger is likely to substantially lessen competition in the market for population health management services in the UK.

• August 12, 2023: The CMA's deadline for making a final decision on the merger.

If the CMA does not approve the merger, UnitedHealth and EMIS would need to offer undertakings to address the competition concerns. These undertakings could include selling off part of their PHM businesses or agreeing to certain pricing and access terms.

The CMA's decision on the UnitedHealth-EMIS merger is expected to be made in August 2023.

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Background to the UnitedHealth Group EMIS merger:

• In January 2023, UnitedHealth Group announced that it would acquire EMIS Group Plc for £1.2 billion.

• EMIS Group is a UK-based healthcare software company that provides a range of products and services to healthcare providers, including electronic health records (EHRs), patient management systems, and clinical decision support tools.

• UnitedHealth Group is a US-based healthcare company that provides a range of healthcare-related products and services, including health insurance, healthcare management, and health data analytics.

• The merger was met with opposition from some patient groups and healthcare providers, who argued that it would reduce competition and lead to higher prices.

• The Competition and Markets Authority (CMA) in the UK is currently investigating the merger to determine if it will reduce competition in the market for healthcare IT services.

• The CMA has until July 12, 2023 to make a decision on whether or not to approve the merger.

Here are some of the key issues that the CMA is likely to consider when making its decision:

• The impact of the merger on competition: The CMA will consider whether the merger will reduce competition in the market for healthcare IT services. If the CMA believes that the merger will reduce competition, it is likely to block the merger.

• The impact of the merger on consumers: The CMA will also consider the impact of the merger on consumers. If the CMA believes that the merger will lead to higher prices or lower quality of service for consumers, it is likely to block the merger.

• The views of third parties: The CMA will also consider the views of third parties, such as patient groups, healthcare providers, and other businesses in the healthcare IT sector. If the CMA receives a lot of negative feedback from third parties, it is more likely to block the merger.

Arguments for and against the UnitedHealth Group EMIS merger:

Arguments in favour of the merger:

• The merger would create a more comprehensive healthcare IT platform: UnitedHealth Group and EMIS are both major providers of healthcare IT solutions. The merger would combine their strengths and create a more comprehensive platform that could better serve the needs of healthcare providers and patients.

• The merger would allow UnitedHealth Group to expand its reach into the UK market: UnitedHealth Group is a major player in the US healthcare market. The merger would allow it to expand its reach into the UK market, which is a growing market for healthcare IT solutions.

• The merger would create jobs: The merger would create jobs in the UK. UnitedHealth Group has said that it plans to invest £1 billion in the UK over the next five years. This investment would help to create jobs in the healthcare IT sector and other sectors of the economy.

Arguments against the merger:

• The merger would reduce competition: UnitedHealth Group is a large player in the healthcare industry. The merger would give it a larger market share in the healthcare IT sector. This could lead to higher prices and lower quality of service for consumers.

• The merger would give UnitedHealth Group too much power: UnitedHealth Group is already a large and powerful company. The merger would give it even more power. This could lead to concerns about patient privacy and data security.

• The merger would not be in the best interests of patients: The merger would be driven by profit, not by the needs of patients. This could lead to higher prices, lower quality of care, and less choice for patients.

Overall, there are both pros and cons to the UnitedHealth Group EMIS merger. The CMA will need to weigh these factors carefully before making a decision on whether or not to approve the merger.

3 key factors in the CMA's decision on the UnitedHealth Group EMIS merger

• The impact of the merger on competition: The CMA will consider whether the merger will reduce competition in the market for healthcare IT services. This will depend on a number of factors, including the size and market share of the merging companies, the number of other competitors in the market, and the barriers to entry for new businesses.

• The impact of the merger on consumers: The CMA will also consider the impact of the merger on consumers. This will depend on a number of factors, including the prices of healthcare IT services, the quality of service, and the choice of providers available to consumers.

• The views of third parties: The CMA will also consider the views of third parties, such as patient groups, healthcare providers, and other businesses in the healthcare IT sector. These parties may provide evidence to the CMA about the potential impact of the merger on competition and consumers.

Overall, the CMA's decision on the UnitedHealth Group EMIS merger will depend on a number of factors, including the impact of the merger on competition and consumers.

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