Professors Gowrisankaran and Handel testified at trial regarding this proposed $13.8 healthcare industry merger.
The U.S. Department of Justice retained Cornerstone Research to support Gautam Gowrisankaran of Columbia University and Ben Handel of the University of California, Berkeley, in a proposed $13.8 billion merger between UnitedHealth Group’s Optum unit and Change Healthcare, a healthcare technology company. Both experts testified at deposition and at trial and rebutted the merging parties’ experts.
The U.S. Department of Justice sued to enjoin the planned merger alleging that it would give UnitedHealth Group, which owns the largest health insurer in the United States, access to a vast amount of its rival health insurers’ competitively sensitive information.
Professor Gowrisankaran analyzed the likely competitive effects of the merger, opining that anticompetitive harm was likely to result both horizontally and vertically and as to the vertical side, through two channels. First, the acquisition would give UnitedHealth Group access to a substantial amount of its competitors’ data, which could give it insight into their strategic actions. Second, the acquisition would allow UnitedHealth Group to control innovations that operate through claims clearinghouses, thereby restricting or delaying other health insurers’ access to these innovations.
Professor Handel explained the types of information contained in healthcare claims data. He showed how this information could be used to infer valuable information about UnitedHealthcare’s rivals if the merger were completed. In particular, he opined that the data available to Change Healthcare differed from commercial data vendors and from public sources (such as through transparency rules). He also demonstrated how a variety of analytical techniques from basic (summary statistics, simple regression) to advanced (machine learning, artificial intelligence) could be used to derive important insights.