The leaders of UnitedHealth Group think they’ll wrap up their $8 billion deal to buy health technology giant Change Healthcare, which has drawn scrutiny from regulators and industry groups, early next year.
President and COO Dirk McMahon on Thursday told analysts and investors that his team is still working with regulators on the big deal, which will add Change’s evidence-based medicine, analytics and revenue cycle services to the range of offerings under United’s Optum umbrella. Announced in January, the planned cash transaction caught the eye of the antitrust division of the U.S. Department of Justice, which requested more details from the companies in the spring and in August was rumored to be recruiting private attorneys to lead a lawsuit opposing the combination. Earlier this year, the American Antitrust Institute and the American Hospital Association went public with letters to regulators that said the proposed deal is likely to stifle competition and harm consumers.
McMahon’s remarks Thursday – which included an affirmation of the additional profits Change would bring to United – suggest those concerns have waned or that the companies are amenable to proposed conditions they’d need to meet to complete their deal. United’s purchase agreement allows for the divestiture of businesses with up to $650 million in annual revenues before it can back out.
“We’re highly energized about the positive impact we can have,” McMahon said. “We believe this combination will make the healthcare system work better for everyone and bring exceptional value to everyone we serve.”
McMahon made note of the Change deal timeline as part of his team’s conference call discussing United’s better-than-expected third-quarter results, which had the company’s shares (Ticker: UNH) up nearly 5% in midday trading Thursday. Also on the call, executives said they have recruited about 8,000 providers to their OptumCare unit, for which they’re targeting growth of 10,000 doctors this year.
United leaders also outlined progress they’re making on the company's virtual and digital-first care offerings, which they called ‘Version 2’ of their telehealth push. United now has more than 7 million of its members under plans that more tightly integrate virtual primary care services with behavorial health specialists and its growing urgent-care platform should in-person care be required. That combination, coupled with United’s focus on cost controls, is giving the company a price advantage of about 15% versus rival offerings, executives said.
“It’s one of the more important initiatives we’re building,” McMahon said.