Budrul Chukrut/SOPA Images/Sipa USA
If UnitedHealth and Amedisys merge, UnitedHealth would control 30 percent or more of the home health or hospice markets in eight states.
Back in 2021, Attorney General Merrick Garland was actively trying to get Facebook lawyer Susan Davies installed as the head of his department’s Antitrust Division. Google counsel Karen Dunn, whose wedding Garland officiated and who prepped Garland for confirmation hearings, was also up for that job. Neither of them got it, regardless of the interests of the head of the department. Instead it went to Jonathan Kanter, a leading Big Tech adversary and anti-monopolist. In other words, in the Biden administration, the attorney general himself was not seen as someone with the kind of power to dictate personnel decisions for his own agency.
That’s why I don’t have too much to say about Trump attorney general nominee Matt Gaetz, who apparently escaped the House right before a damaging Ethics Committee report was about to drop detailing sex with underage girls and illegal drug use. It’s just factually true that Gaetz has been part of the small faction of “Khan-servatives” supportive of Big Tech monopolization investigations (and new laws to advance these), bans on noncompete agreements, and an end to effective corporate immunity through arbitration clauses, excessive government surveillance, and executive declarations of war without government approval. I’m not the only one saying this, and there’s a long record. Even FTC chair Lina Khan said in an open meeting Thursday that she appreciated cross-aisle support from the likes of Gaetz, and that his ascension to attorney general “will be terrific for the bipartisan work to continue.”
I’m just unconvinced that it will matter much. The attorney general sets department strategy and prosecutorial discretion to a certain degree, but Gaetz (if he’s confirmed, or recess-appointed) will be there to do what any Trump AG pick would: weaponize the justice system to go after Trump’s enemies. That may overlap with some antitrust targets at times, but the vengeance is the point.
Moreover, Gaetz will likely be the figurehead for that effort, from the perch of conservative media. The work will take place in the bowels of the department. And who ends up running the Antitrust Division—which had a good degree of autonomy in the Biden years—has yet to be determined. It will not be Gaetz’s call alone, if history is any guide.
Trump’s antitrust enforcers started the cases against Google and Facebook, the latter of which got the go-ahead to go to trial this week. My general belief on Trump and antitrust is that cases will continue until he makes a deal with the participants, on his terms. There won’t be any internal philosophy or logic to it. And the general belief on Wall Street is that a merger wave is imminent. They are almost certainly correct.
Gaetz would be there to do what any Trump AG pick would: weaponize the justice system to go after Trump’s enemies.
However, that does not mean that enforcement will slither back into a hole, not to be seen until Democrats regain power in Washington. The Sherman and Clayton Antitrust Acts allow room for state attorneys general to use the statutes. And one of the first post-election cases on that front shows that Democratic state enforcers are likely to pick up where the neo-Brandeisians left off.
On Tuesday, the Justice Department and four attorneys general in Maryland, Illinois, New Jersey, and New York filed suit challenging medical leviathan United Healthcare’s acquisition of Amedisys. The case would pair two of the biggest three home health and hospice companies in America, with dire implications for prices, quality of care for patients, and wages for nurses. It was filed in district court in Maryland and not D.C., on the expectation that a change in power in the Justice Department could lead to an exit from the case. And it shares many of the qualities that Kanter’s Antitrust Division has been stressing for years, which will not fade away when he leaves the Justice Department.
In other words, it’s a hopeful signal that there is life after “Wu, Khan, and Kanter” for those who believe in aggressively targeting concentration in corporate America. And this can be applied to many other areas where Trump’s team will simply fail to enforce the law. Democratic governors want to take the lead on opposing the second Trump term, but Democratic AGs have an inside track, not only because they can sue the Trump administration directly, but because they can through filing cases exhibit their values of fighting for working people over big business.
THE FAST-GROWING HOME HEALTH SECTOR is poised to expand as baby boomers reach the age where they need help with basic activities and want to remain in their homes. Both UnitedHealth and Amedisys bought into the space. Amedisys spent $1 billion on acquisitions since 2019; UnitedHealth acquired LHC, which itself was a rollup of home health and hospice companies, with 44 acquisitions from 2020 to 2023. This is a typical move for UnitedHealth, which has spent $36 billion on acquisitions of practically every corner of the health system over the past three years.
Amedisys was trying to sell out to a company called Option Care last year, but UnitedHealth swooped in, agreed to pay Option Care its breakup fee, and offered $3.3 billion to Amedisys in a winning bid. The combined firm would have a presence in 37 states and D.C., with hundreds of locations and several thousand nurses in its employ. And the three largest home health providers would be owned by two big insurance companies: LHC and Amedisys by UnitedHealth, and Kindred, bought by Humana in 2021.
Humana and UnitedHealth happen to be the two largest Medicare Advantage insurers, which is where home health and hospice companies get about half of their revenues. This would enable these insurers to command higher reimbursement rates for home health services from rivals, since they have the most capacity.
State attorneys general are going to have to step up in the face of a pullback of enforcement at all levels of the federal government.
The biggest rationale for blocking the merger that the plaintiffs have is that UnitedHealth and Amedisys are demonstrably in competition with one another. The two firms “keep each other honest,” the current board chair of Amedisys is quoted as saying. Amedisys is obsessed with “stealing share” from UnitedHealth, and UnitedHealth desires to “put a dent in Amedisys.” A UnitedHealth document lists Amedisys among its “Main 3” competitors. And there is constant monitoring of each other’s earnings calls, financial performance, referrals from doctors, and so on.
If the two companies merge, all of that sparring goes away. In eight states, UnitedHealth would control 30 percent or more of the home health or hospice markets. In eastern Maryland, UnitedHealth would have 75 percent of home health; in Parkersburg, West Virginia, UnitedHealth would have 90 percent of hospice services.
This will have a direct impact on price and quality, since that’s what UnitedHealth and Amedisys competed over. There’s an advantage to bigger companies with the capacity to accept more patients; that reliability helps to get them referrals. As Amedisys’s board chair and former CEO has said, “The winners in our world will be those companies that have the capacity to fulfill the demand.” Bigger, in other words, is better.
But as with other antitrust cases in recent years, the impact on consumers is not the only focus. The case foregrounds the situation of home health and hospice nurses having fewer outlets for their craft. Nurses benefit from the direct competition between UnitedHealth and Amedisys, often leading to heavy recruitment, better wages and benefits, and retention bonuses of up to $10,000. Amedisys sent a mass email to LHC nurses after UnitedHealth bought them, hoping to grab staff away.
TO EASE CONCERNS WITH COMPETITION, UnitedHealth and Amedisys proposed a divestiture to VitalCaring, attempting to create new competition in the market. But VitalCaring, owned by two private equity firms, has seen plummeting value since being established in 2021, and would have to scale up in areas where it has no presence. Worse, VitalCaring CEO April Anthony, according to a Texas case from 2022 that the plaintiffs cite in the lawsuit, was found to have worked with the private equity firms to form the company while she was the CEO of a rival named Encompass. (Apparently, this was hidden in part by referring to Anthony as “Voldemort” in a draft presentation.) Then, when VitalCaring was set up, it poached employees from Encompass. There’s an active lawsuit from Encompass shareholders against VitalCaring over this conduct for breach of contract and fiduciary duties, seeking $500 million in damages.
Finally, the plaintiffs accuse Amedisys of some comical shenanigans. Merging parties must fill out a form with basic information about the company. Somehow, Amedisys claims, it forgot to archive emails between May and June of 2023, precisely when the negotiations with UnitedHealth were taking place. Those and other documents were not provided to authorities for eight months, despite Amedisys attesting that it had given a complete response.
So it’s a pretty comprehensive case that exemplifies several trends of the new school of antitrust: a focus on labor harms, disinterest in remedies like divestitures, and serious enforcement of nondisclosure of information or even deliberate scrubbing of data. The FTC’s successful blockage of fashion companies Capri and Tapestry, whose merger was abandoned this week, focused on labor harms to concentration. The Kroger-Albertsons merger challenge took a skeptical eye at a proposed divestiture. And the Justice Department’s successful monopolization case against Google went in hard on deliberate deletion of chats and other communications.
That Google case, by the way, had state partners, as do many of the high-profile lawsuits antitrust enforcers have brought, including Albertsons-Kroger, Ticketmaster, RealPage, Amazon, and Apple. And no matter what happens with Jonathan Kanter or Matt Gaetz or anyone else, those cases, along with this UnitedHealth-Amedisys case, will go forward.
State attorneys general are going to have to step up in the face of a pullback of enforcement at all levels of the federal government. This case shows they are up to the task.
