Change Healthcare hack shows need for more competition


The turmoil and financial strain for physicians triggered by the massive cyberattack on the Change Healthcare business unit of UnitedHealth Group (UHG) in February is yet another cautionary tale of the dangers of unchecked consolidation across health care.

Your Powerful Ally

The AMA helps physicians build a better future for medicine, advocating in the courts and on the Hill to remove obstacles to patient care and confront today’s greatest health crises.

The AMA has consistently opposed large-scale mergers sought by health insurance companies and other major players in health care that undermine competition and tip the scales of power away from patients and physicians in favor of ever-expanding corporations.

In 2021, the AMA notified the U.S. Department of Justice (PDF) of several antitrust concerns regarding the proposed merger of Change Healthcare and Optum, a subsidiary of UnitedHealth Group. The ongoing Change Healthcare episode reminds us of the perils of consolidation and its potential for harm to patients, physicians, physician practices and our entire health care system. Our antitrust advocacy is a vital component of public policy for the AMA, the Federation of Medicine and both physicians and patients nationwide.

Change Healthcare is the nation’s largest processor of medical claims. Fallout from the cyberattack on its operations continues to disrupt physician practices across the country, with smaller practices absorbing the most severe financial impact. A new informal survey (PDF) of physician practices published this week showed that a shocking 62% of respondents are using personal funds to cover practice expenses, and more than a third are unable to meet their payroll obligations following the cyberattack. None of my own doctors have been paid for the six office and hospital visits I have received as a patient since the cyberattack.

In new testimony (PDF) the AMA provided in advance of the Congressional hearings on the cyberattack this week, we highlight the devastating financial impact on physician practices as well as the disruption of their operations, including electronic prescribing and electronic lab ordering. We also ask Congress to urge commercial payers to provide advance payments to physician practices impacted by the Change Healthcare situation, especially small independent practices.

The AMA responded quickly to mitigate the fallout from this debacle. Our Change Healthcare cyber outage resource page continues to provide regular updates on the incident, as well as advice on network protection, and information from the Department of Health and Human Services and other federal agencies on how to improve cyber resiliency and related topics. The AMA also offers an eight-part video training series focused on cyber security in clinical settings through the AMA Ed Hub, because we want to ensure physicians and health systems are taking steps to prevent cyber incidents at their practices.

We also remain strong advocates of reducing consolidation in health care while fostering greater competition as the right prescription for cutting exorbitant health care costs, improving outcomes and boosting the overall quality of care. The AMA is committed to antitrust advocacy and promotes robust competition in the health insurance marketplace so that consumers have plentiful choices at the lowest possible costs.

This is why the AMA strongly supports new merger guidelines issued in December 2023 by two federal agencies, the U.S. Department of Justice and the Federal Trade Commission. The new merger guidelines have the potential to subject health insurer mergers to greater scrutiny and potentially limit future mergers.

The merger guidelines offer an analytical framework for evaluating the risk that mergers or other consolidations pose in shrinking competition or creating a monopoly, including cautioning how further consolidation would impact the record-high levels of concentration that already exist.

Months after the Change Healthcare cyberattack came to light, significant disruptions persist. The scope of the damage became more clear in late April, when parent company UHG said files with protected health information covering “a substantial portion of people in America” may have been taken by hackers during the February attack.

Because some patient information stolen during the cyberattack has already appeared on the dark web, the AMA continues to urge UHG to keep patients and physicians fully informed and updated on the situation, while also providing both the financial assistance and administrative flexibilities that practices need to continue serving patients.

Over the long term, however, the focus must remain on correcting the issues triggered by high levels of concentration within our health care system. The problems that exist now were summarized succinctly by Barbara L. McAneny, MD, one of my predecessors as AMA president who leads the New Mexico Cancer Center. In an interview with New York Magazine, Dr. McAneny recounted how the Change Healthcare attack brought her practice to a halt, with some physicians on staff offering to stop drawing salaries until financial stability returned to ensure patients could continue their chemotherapy treatments.

“This is what happens when everything merges and you only have one option,” Dr. McAneny told the interviewer. “When we have one option, then the hackers have one big target that they know if they bring that down, they can grind U.S. health care to a halt.”