UnitedHealth's buyout of UK's EMIS could reduce competition: UK watchdog

NHS could also be hit with higher prices as a result of the merger, CMA argues in initial investigation

The UK's market watchdog has warned that US health insurer UnitedHealth's £1.24 billion ($1.5 billion) bid to buy UK health records software supplier EMIS could lead to worse outcomes for the NHS.

The Competition and Markets Authority's (CMA) initial investigation has found competition could be substantially reduced, specifically in the market for software which enables the safe and effective use of medicines.

Under UK law, if a merger is deemed likely to reduce competition substantially, the CMA has the power to block it or impose remedies to address those concerns, as it did with Meta and Giphy, for example.

Today, the CMA pointed out that EMIS is a large and established supplier of data management systems to the NHS. Within its portfolio are electronic patient record system used by the majority of NHS GPs in the UK.

Meanwhile, Optum, a UnitedHealth company, supplies software used by GPs when prescribing medicines, as well as data analytics and advisory services that the NHS uses to help improve overall healthcare and health service provision, also known as population health management.

In a statement, CMA senior mergers director Sorcha O’Carroll said: “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.

“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. UnitedHealth has the opportunity to address our concerns, otherwise it will progress to a more in-depth investigation,” she added.

In a statement sent to The Register, UnitedHealth's Optum UK said of the probe:

"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 31 March 2023."

In June last year, the US health insurance company agreed to buy EMIS in an all-cash deal valuing the UK tech biz at around £1.24 billion and — according to a January statement — expects to close the deal late Q1 or early Q2.

The CMA said EMIS had five working days from Friday to offer legally binding proposals addressing the concerns it identified. The CMA would then have a further five working days to consider whether the response addressed its concerns or if the case merits further investigation.

The CMA said it was concerned the deal could impact services provided by Optum’s competitors because they rely on digital connections to the data that EMIS holds and integrations with EMIS’s electronic patient record system. The CMA argued that Optum could limit these connections if the merger went ahead. The result could mean less competition among tech providers and higher prices, it said. ®

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