Welcome back to EconWorks.

While much of our recent focus has been on the digital platform dynamics of FAANG companies, the exact same economic friction—steering, network foreclosure, and monopsony power—is actively reshaping the U.S. healthcare system.

In our latest deep dive, we break down the antitrust economics behind the U.S. Department of Justice’s (DOJ) challenge to UnitedHealth Group’s (UHG) $3.3 billion acquisition of Amedisys.

This isn't just another healthcare merger. It is a textbook application of the 2023 U.S. Merger Guidelines and a clear signal that regulators are aggressively targeting "stealth consolidation."

Here is what you need to know:

In healthcare, distance dictates the market. The DOJ successfully argued that a hypothetical monopolist could profitably raise prices on local home health and hospice care because vulnerable patients cannot simply drive 50 miles away to a different type of facility. Competition in post-acute care is hyper-local.

This case highlights a shift toward prioritizing unilateral effects. Because traditional Medicare rates are fixed, local home health providers don't compete on price—they compete on quality. By absorbing its closest rival, UHG threatened to eliminate the "pure competition" that keeps patient care standards high.

Antitrust isn't just about consumer prices anymore; it’s about worker leverage. Activating Guideline 10, the DOJ proved that combining two of the largest employers of home health nurses in 24 states would create a monopsony—giving UHG the unchecked power to suppress wages, degrade benefits, and trap specialized workers with nowhere else to go.

UHG initially tried to appease regulators with a minor divestiture. The DOJ rejected it entirely. To save the deal, UHG was ultimately forced into the largest divestiture of outpatient healthcare services in U.S. history (164 locations across 19 states).

The Bottom Line: Large healthcare conglomerates are increasingly operating like digital platforms, using their scale to steer demand and extract rents. The Amedisys settlement proves the DOJ is now actively using the 2023 Guidelines as a litigation playbook to stop them.

Read the Full Economic Analysis Here: The Governance of Referrals: An Economic Analysis of the UnitedHealth/Amedisys Merger

P.S. — Check out the full article to see our new custom comic strips illustrating the economic theories, including the SSNIP Test and Labor Monopsony!