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August 14, 2023

CMA gives provisional green light to £1.2bn UnitedHealthcare EMIS merger

The regulator is satisfied the deal probably won't harm competition in the market.

By Sophia Waterfield

US-based UnitedHealthcare has been given the green light to progress with its £1.2bn acquisition of electronic patient record company EMIS, despite concerns that the deal may increase costs for the NHS. But UK antitrust watchdog the Competition and Markets Authority (CMA) says it will continue to seek evidence on potential harmful impacts of the deal.

CMA has provisionally found that the UnitedHealthcare and EMIS merger would not create competition reduction. Photo courtesy of Shutterstock

The CMA has been investigating the proposed acquisition of EMIS following concerns that the purchase could reduce competition and result in more cost for the NHS. EMIS is a leading supplier to NHS GPs across the UK for electronic patient record systems, and integrates with other companies that provide population health management services and medicines optimisation software. The acquisition was announced in 2022.

Will the UnitedHealthcare EMIS merger hinder competition?

The CMA said that while the merging businesses did not supply competing services, UnitedHealthcare’s UK arm, Optum, has competitors that used the EMIS system. As reported by Tech Monitor, the regulator was concerned UnitedHealthcare could reduce access to the EMIS system for these companies, as well as pricing the competitors out of contracts with the NHS.

It was also feared the NHS may end up with higher bills for “lower quality offerings” as a result of the deal, which the CMA said could put further strain on the health service’s budgets. The regulator started its Phase 1 investigation in January and referred it to a Phase 2 investigation on 31 March.

However, an independent panel for the CMA concluded its Phase 2 investigation this month and provisionally found that while EMIS held a “particularly strong market position”, the merged business would not be able to use the EMIS business to harm the competitiveness of rivals. CMA says this is primarily because of the NHS’ oversight role.

NHS England could take “effective action” against potential competition strategies

In its findings, the CMA said that the health service could use its buying power to ensure that negative impacts of the deal on competition were minimised.

“Our provisional view is that the position of the NHS in this market, including its ability to influence market outcomes (such as by updating frameworks and standards) and its seeking (or the threat of its seeking) to take a broad approach to interpreting and enforcing the existing frameworks and standards would be likely to negate any potential gains and reduce the incentive of the merged entity to engage in partial foreclosure,” it said.

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Kirstin Baker, chair of the independent inquiry panel, said that because of the role Optum and EMIS technology services play in healthcare, it was important for the deal to be investigated thoroughly.

“We want to ensure the NHS continues to benefit from innovation and efficiencies brought about by technology services competing for its business,” she said. “After carefully considering a broad range of evidence, we have provisionally found that this deal is not expected to harm competition or adversely affect patients.”

Provisional findings are welcomed by Optum

According to its announcement, the CMA said that it had gathered and assessed a “wide range of evidence”, including internal documents from EMIS and Optum. It also had evidence from competitors, customers across the health service and from NHS England itself.

In its response to the concerns, UnitedHealthcare and EMIS said they had “no incentive to partially foreclose.” It said any gains from the alleged strategies would be short-lived and would risk EMIS and Optum’s UK business.

An Optum UK spokesperson told Tech Monitor: “We welcome the CMA’s provisional findings from its Phase 2 investigation of Optum UK’s proposed acquisition of EMIS and will continue to engage cooperatively with the CMA until its investigation concludes.” The spokesperson added that the company remains “focused on supporting the long-term success of the NHS. Our aim is to help make the UK health care system work better for GPs and patients alike”.

The acquisition is far from a done deal, however. CMA’s findings are not open to consultation, with further views being welcomed until September 1. The regulator’s final report is due in October.

Read more: Why can’t the NHS quit Palantir?

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