UnitedHealth's EMIS acquisition could lead to higher costs for NHS: CMA
US insurer's planned $1.2bn purchase of UK health software firm could breach competition rules, says watchdog, which has launched an investigation
UnitedHealth's proposed $1.2 billion acquisition of British data management firm EMIS could potentially decrease competition in the UK health sector, leading to adverse outcomes for the NHS, patients, and UK taxpayers, an initial investigation into the deal by the UK's Competition and Markets Authority has found.
UnitedHealth is widely recognised in the US as a supplier of healthcare insurance and operates in the UK as Optum Health Solutions (UK) Ltd.
Optum provides software used by GPs within in the NHS for prescribing medication to patients.
Additionally, Optum's data analytics and advisory services are employed by the NHS to enhance healthcare and health service delivery, commonly referred to as Population Health Management.
British firm EMIS is a well-established and prominent provider of data management systems to the NHS, which includes supplying the electronic patient record system used by a majority of NHS GPs throughout the UK.
In June last year, UnitedHealth agreed to purchase EMIS in an all-cash deal, which valued EMIS at approximately £1.24 billion.
Earlier this year, UnitedHealth said it anticipates the deal to be concluded in late Q1 or early Q2.
On 20th January, the CMA launched a phase one investigation to assess the potential impact of UnitedHealth's acquisition of EMIS on competition between digital and data analytics providers to the NHS.
Throughout the investigation, the CMA received a significant number of concerns regarding the merger.
The investigation determined that the merger of the two firms could significantly diminish competition, particularly in the markets for Population Health Management and medicines optimisation software.
The CMA has expressed concern that the deal may affect services offered by Optum's competitors.
Optum and its rivals depend on digital connections to access the data that EMIS stores, as well as integrations with EMIS's electronic patient record system.
If the merger were to proceed as intended, Optum could opt to restrict these connections, and the CMA believes that this could unfairly impede competing companies.
As a result, the NHS, as the recipient of these services, could have fewer choices, and consequently higher prices or less attractive offerings.
The CMA said EMIS has five working days from Friday to provide legally binding proposals that address the concerns the CMA has identified.
Following this, the CMA will have an additional five working days to evaluate whether the response satisfies its concerns or if the case warrants a Phase 2 investigation.
Under UK law, if the CMA determines that a merger is likely to substantially diminish competition, it has the authority to either prohibit the merger or impose remedies to address the identified concerns. This is intended to safeguard the competitive market and protect the interests of consumers.
"We note the announcement today by the CMA following the conclusion of their initial review of our proposed acquisition of EMIS plc," Optum UK said in a statement.
"With the full support of EMIS, we look forward to working with the CMA to agree upon suitable undertakings in lieu of reference to Phase II and obtaining the clearance necessary to successfully close our acquisition of EMIS. A further update is expected to be provided on or around 31 March 2023."