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Optum/Change Healthcare Merger
Customer Insights 2022
In January 2021, Optum announced their intentions to acquire Change Healthcare. The merger remains unfinalized, however, as the US Department of Justice blocked the deal in February 2022 due to anticompetition concerns—such a merger would give UnitedHealth Group, Optum’s parent company and the nation’s largest insurer, access to rivals’ sensitive data. The legal proceeding is ongoing and scheduled to go to trial August 1, 2022. This report shares Optum and Change Healthcare customers’ reactions to the merger and their perceptions of its impact. Between March 2021 and April 2022, KLAS interviewed 48 individuals from 46 unique organizations; of these respondents, 9% are Optum customers, 56% are Change Healthcare customers, and 35% are customers of both vendors.
Merger’s Impact on Healthcare Industry a Top Concern
45% of respondents (including 60% of interviewed customers who use Optum products) report an unfavorable initial reaction to the acquisition announcement. The most common concerns include the potential for Optum to monopolize the healthcare industry, create conflicts of interest with payer/provider partnerships, and access data that could be used to UnitedHealthcare’s benefit. One director (a Change Healthcare customer) said, “My initial reaction to the announced merger of Optum and Change Healthcare is that Optum is becoming a monopoly. Because Optum is part of UnitedHealthcare, I am not pleased because UnitedHealthcare is one of the payers that we have the most problems with. I feel like Optum is taking over. They have their hands in everything now, and that concerns me. The front-end scrubbing should be very separate from the back-end insurance. The front-end scrubbing should be the unbiased gateway in the middle and should only deal with facts.”
Only one interviewed respondent—a director whose organization uses Change Healthcare—had a favorable initial reaction: “My reaction to the merger is probably favorable because Change Healthcare and Optum are both long-term studies. They have good products, so I would hope that the merger would improve both vendors’ products.”
“We know quite a bit about the merger between Optum and Change Healthcare. We have business ties with Optum. My initial reaction to the merger is unfavorable, to be honest. My concern is that Optum will become too big and create a monopoly by buying everything. My other concern is the potential for Optum to dictate what Change Healthcare does. We want Optum to leave Change Healthcare alone. We don’t want Change Healthcare’s strategy or focus to be impacted. We realize that there could be positive things that come from the merger, but we want Change Healthcare to remain as autonomous as possible.” —Director (customer of both Change Healthcare and Optum)
“When Optum absorbed a previous vendor of ours, the performance got worse. After the Optum acquisition, they made some management changes. We use Optum products for a lot of things. Optum is a massive company, and we use their products all across our space. We find that our experience and the quality of service are really dependent on the individual team that we are working with; just working with Optum doesn’t guarantee good or bad outcomes. If I didn’t have to work with Optum, I probably wouldn’t. But then again, they are massive in the space and buying up lots of smaller players.“ —VP (customer of both Change Healthcare and Optum)
Most Customers Don’t Plan to Change Engagement
The majority of respondents feel the merger will not impact how they engage with Optum and Change Healthcare—partly because they feel they don’t have other options—or are unsure whether their engagement will change. In contrast, nearly one-quarter of respondents say the merger has made them less likely to increase engagement with the vendors in the future. Some of these respondents expressed strong feelings, including one senior director of revenue cycle (a Change Healthcare customer): “A clearinghouse owned by an insurance carrier is extremely dangerous. There is too much opportunity to steal data and use it nefariously. There is not enough separation.”
“I would suspect that we are going to do less with Change Healthcare because they backed us into a corner on some contracting things. Our legal department was not at all happy with that. I think our continued business with Change Healthcare is probably a thing of the past. I wouldn’t recommend them right now for anything, to be honest.” —CIO (customer of both Change Healthcare and Optum)
“I would ask Change Healthcare not to go forward with the merger. If I have better options, I will pursue them. For the clearinghouse and claims scrubber, there are other fish in the sea, and we will be pursuing them. One aspect of the Change Healthcare acquisition is that Change Healthcare owns InterQual. That is another thing that I would rather that the payer doesn’t own. I don’t like that they would be able to add and change necessity rules at their discretion.” —VP (customer of both Change Healthcare and Optum)
Customers Want Vendor Leadership to Improve Payer/Provider Relationships
Respondents advise leadership from Optum and Change Healthcare to follow through on promises to streamline the payer/provider relationship. Provider organizations feel that they often have to jump through hoops to fulfill payer requirements and that the current process is not aligned for optimal efficiency. One VP (a Change Healthcare customer) noted, “If I had to give the companies advice, it would be to make sure they are really serious about streamlining the relationship between payers and providers. Payers should stop all of their rules and things designed to deny claims. . . . We are just tired of keeping up with new authorization programs, new medical necessity rules, and new tier-to-tier physician reviews for admissions. The changes just go on and on.”
Some respondents feel that the vendors’ customer support representatives lack experience and knowledge and that a renewed focus on meeting customer needs would help improve service and relationships. Other interviewed customers want Optum and Change Healthcare to communicate more transparently about the merger—at the time of data collection, a few respondents had not yet received any information from their vendor. (Legal limitations may be a factor in this lack of communication. Optum and Change Healthcare have published what information they can.)
“The advice that I would give to Optum and Change Healthcare is twofold. First, they need to get back to their roots of customer service to make sure that they are meeting the needs of the organization and their customers. Second, Optum and Change Healthcare need to keep the value of their products or services in mind to make sure that those things are affordable and are translating into real dollars for the customer.” —Manager (customer of both Change Healthcare and Optum)
“I do not have an announcement email from Change Healthcare saying they have merged with Optum and telling us how it is going to impact us as an entity that uses their product. It would have been better if they had sent out something about how the merger will impact the front end, whether it should be seamless, and so on. But I don’t see anything like that in any of the Change Healthcare emails that I have. I would advise the vendor’s leadership to do a better job of keeping their constituents informed of their changes. The vendor should reach out and have some town halls or question-and-answer sessions so that we understand what the merger means.” —Director (customer of Change Healthcare)
Writer
Natalie Hopkins
Designer
Jessica Bonnett
Project Manager
Robert Ellis
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2024 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.