Health Plan Weekly

With UnitedHealth Group poised to battle the U.S. Dept. of Justice in court over the fate of its proposed purchase of Change Healthcare, Inc., there’s still a host of unknowns about how that legal case will play out. However, one thing does appear to be clear to industry observers: UnitedHealth will be just fine no matter how the fight to salvage its transaction plays out.

In the credit rating world, “if the deal is ultimately stopped by the DOJ, it would be credit positive for UnitedHealth” because it would require the company to take on less debt, “but long-term growth prospects would be incrementally diminished,” Moody’s Investors Service wrote in a Feb. 28 report.

With the cost of hospital-based services rising ever higher — and sometimes varying dramatically between different institutions — the concept of regulating prices has become a perennial political issue. However, a new study suggests that certain markets are much better suited for price regulation than others: namely, those where there is little hospital competition.

In those concentrated markets, higher hospital prices do not appear to lead to lower patient mortality, meaning cost isn’t correlated with quality, according to a new working paper published by the National Bureau of Economic Research (NBER). But in hospitals in less concentrated markets, pricier hospitals are indeed associated with increased health care quality — and as a result, patients are 47% less likely to die than if they attended lower-priced facilities.

Virtual care has become a mature industry during the COVID-19 pandemic, with insurers and investors pouring money into telehealth startups. But the telehealth boom has changed how practitioners deliver care in ways that they don’t necessarily like, according to a new survey from McKinsey & Co. Though telehealth is here to stay, much remains unsettled about the way physicians use virtual care tools — and how they are paid to do so.

Nearly every physician now uses telehealth, according to McKinsey, and the change happened fast: 83% of physicians that the consulting firm surveyed in 2021 offered virtual services, versus 13% in 2019. The survey also found that by May 2021, 88% of consumers had used virtual care since the start of the pandemic.

The U.S. Dept. of Justice (DOJ) on Feb. 24 sued to block UnitedHealth Group’s proposed $13 billion acquisition of Change Healthcare Inc., arguing that the deal would stymie competition not only in commercial health insurance markets but also the market for technology that allows insurers to process claims and reduce health care costs.

UnitedHealth has already indicated that it will challenge the legal action taken by the DOJ and attorneys general from Minnesota and New York — setting the stage for the first legal fight to save a major deal involving a health insurer since the failed Anthem/Cigna and Humana/Aetna tie-ups.