A merger between United Health and EMIS worth £1.2bn could drive up costs of digital services for the NHS and hit the pockets of the taxpayer, the UK competition regulator has warned. An investigation by the Competition and Markets Authority (CMA) has found that UnitedHealth could foreclose on competitors in the market, reducing access to the electronic patient record system and pricing competitors out of contracts.
A phase one investigation by the CMA commenced on 20 January. It explored how the purchase of data management company EMIS by UnitedHealth could impact competition between digital and data analytics providers to the NHS.
The CMA has found that competition could be “substantially reduced” specifically in the population health management and medicines optimisation software markets. The reduction could result in contract costs going up for the NHS for “lower quality offerings” putting further strain on the health service’s budgets.
US giant acquisition could spell trouble for the NHS’s digital goals
The CMA says that during its investigation a large number of concerns about the merger were received, including from NHS Digital, which has since been merged with NHS England.
UnitedHealth Group is known in the US for healthcare insurance and operates in the UK as Optum. It currently supplies software used by GPs within the NHS to prescribe medicines to patients. Its data analytics and advisory services are also used in the NHS to improve healthcare and health service provision, also known as population health management.
The EMIS IT system allows patients to contact their GP for advice and support, order repeat prescriptions, view their health records and make appointments. Apps such as the NHS App, Doctorlink, MyGP and Patient Knows Best are all integrated with this system.
UnitedHealth and EMIS merger could limit competitor access to patient and GP software
While both companies supply the NHS with software, concerns have been raised relating to the merger providing an opportunity for Optum to foreclose its competitors, which rely on data from or integration with EMIS. Their access to EMIS Web could be limited if the deal goes through, the regulator says.
According to the summary document, the CMA found that evidence from internal documents and third parties showed that integration with GP electronic patient record systems was essential to offer medicine optimisation software. Medicine optimisation is when a GP is offered alternative prescription medicines in order to increase effectiveness and reduce cost.
The CMA concluded that there would be a low rate of GPs switching over to other electronic patient record systems, meaning that EMIS had market power.
“Both Optum and its main rival use custom APIs to integrate with EMIS Web, as they require functionality that is not available through the APIs must offer as mandated by the NHS,” explained CMA in its investigation summary. “This means the provision and commercial terms of the integration are negotiated directly between the medicine optimisation supplier and EMIS.”
The CMA concluded that there was a range of “feasible mechanisms” available to UnitedHealth and EMIS’s potential merger that could impact Optum’s competitors, including reducing the quality of the custom API through fewer updates and less cooperation and worsening the user interface EMIS Web, resulting in patients not wanting to use it.
Merger could create higher costs for low-quality products, says CMA
Sorcha O’Carroll, senior mergers director, CMA, said in a statement that the deal between UnitedHealth and EMIS could mean the NHS loses out on the benefits of competition.
“The NHS and the millions of patients under its care depend on critical behind-the-scenes technology to ensure people are looked after and receive the treatment needed to get better,” she said.
“This deal could see the NHS lose out on the benefits of competition, including innovation in these products and services and getting better value for money.”
O’Carroll continued that UnitedHealth has the opportunity to address CMA’s concerns before the government organisation moves to a more in-depth investigation, known as phase two.
“UnitedHealth and EMIS have five working days to offer legally binding proposals to the CMA to address the concerns identified,” she explained.
The CMA will take another five working days to consider whether the proposal addresses its concerns or if it should be referred to phase two investigation.
A spokesperson for Optum UK said: “We note the announcement today by the CMA following the conclusion of their initial review of our proposed acquisition of EMIS plc. 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 March 31.”