CMA: £1.2bn deal with data and software firms will push UP NHS costs and reduce competition

A £1.2 billion deal between two data management and software companies could push up costs for the NHS by reducing competition, a regulator has found.

The Competition and Markets Authority (CMA) gave UnitedHealth and Emis five days to come up with a plan to mitigate some of its concerns – or risk the watchdog blocking the deal.

UnitedHealth announced its plan to take over Emis last June. The deal would combine its subsidiary Optum with Emis in the UK.

This comes as the government is locked in a fierce union battle over pay for nurses, doctors, and other NHS staff members. Yesterday strikes were paused as negotiators considered the proposals.

The new company would have an “enhanced ability to deliver important benefits for patients, clinicians and the NHS”, the firms said at the time.

The health service has recently been increasingly turning to digital and data solutions to help improve care in the UK.

Emis already supplies it with data management systems, including the electronic records of patients used by most GP practices.

GPs also use software from Optum when prescribing medicines, among other things.

After the first phase of its investigation, the CMA is worried the deal could reduce competition for two types of software.

Optum’s competitors rely on using the data the Emis systems holds. If the deal goes ahead, the watchdog said, Optum would be able to limit how much of this data its competitors can use and unfairly undermine them.

That would leave the NHS with fewer options to shop around and potentially drive up prices or reduce the quality of the services it gets, the CMA fears.

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.”