On May 9, the Department of Justice’s (DOJ) Antitrust Division announced the creation of a new task force, the Task Force on Health Care Monopolies and Collusion (HCMC), focusing on antitrust enforcement in the healthcare industry. In an interview following the announcement of the task force, Assistant Attorney General Jonathan Kanter stated that the task force will “elevate the importance of health care antitrust enforcement,” and noted that healthcare “is among our highest priorities.”
The task force will address a wide range of competition concerns, including the following:
Payer-Provider Consolidation
The task force will focus on vertical integration between health insurance companies and healthcare providers, which, Kanter stated, has resulted in “multi-sided giants that are accumulating assets at an alarming rate and are becoming the new intermediaries and gatekeepers of our health care system.” This continues a trend of close scrutiny of the effects of vertical integration in the healthcare industry. DOJ has launched multiple investigations into deals between payers and providers in recent years, including its ongoing investigation into UnitedHealth’s proposed acquisition of Amedisys Inc. It has also been widely reported that UnitedHealth’s purchases of physician practices through its Optum subsidiary are the focus of an ongoing DOJ antitrust investigation.
Serial Acquisitions
Serial acquisitions and roll-up strategies have been a focus for both the Federal Trade Commission (FTC) and the DOJ and will likely continue to be under the new task force. In an apparent reference to UnitedHealth’s lengthy list of serial acquisitions in recent years, Kanter spoke to the threat that can be posed by entities buying their way into a dominant position in the healthcare market, stating that serial acquisitions can create “very strong entities with deep incentives to put profits ahead of people.” This follows several high-profile agency actions targeting private equity in the healthcare industry. DOJ may seek to bring similar actions.
Labor Issues
The task force will study labor competition and quality of care. Labor competition and wage suppression in the healthcare industry have been a particular concern for both the DOJ and the FTC, and this was a key issue in the FTC’s investigation into UnitedHealth’s Optum acquisition of LHC Group last year. Beyond scrutinizing labor issues in a deal-making context, the DOJ has also brought several criminal cases against companies accused of labor market collusion in the healthcare industry, including the high-profile criminal indictment of Surgical Care Affiliates in 2021.
Data Sharing & Billing Practices
The task force will also focus on a number of competition issues relating to technology, billing practices, and access to and misuse of healthcare data. In 2022, the DOJ unsuccessfully attempted to block UnitedHealth’s acquisition of Change Healthcare, a healthcare technology company and information exchange, alleging, among other things, that the acquisition would give UnitedHealth access to competitively sensitive information that it could use to harm competition. Notably, Change Healthcare suffered a massive cyber-attack earlier this year that caused widespread disruption and crippled large swaths of the healthcare industry—resulting in losses exceeding $1 billion by some estimates. Alluding to the cyberattack, Kanter stated that consolidation in the healthcare industry is both an economic threat as well as a national security threat, creating “central points of failure” that are “sitting ducks for cyber risk.”
The task force underscores the importance of healthcare providers, insurers, and healthcare private equity firms staying informed about the evolving antitrust enforcement environment.
