Loretta Cecil – Change Healthcare

When Loretta Cecil faced the U.S. Department of Justice in federal court in 2022, the COVID-19 pandemic was still raging.

Change Healthcare—a healthcare technology company where Cecil was executive vice president and general counsel—was in the process of a $13 billion acquisition by UnitedHealth Group when the Justice Department sued both companies to prevent them from closing the transaction. UHG is a healthcare company with insurance, pharmacy and software subsidiaries.

Justice Department lawyers argued various antitrust concerns, including that the merger would create an illegal monopoly in the technology used to process healthcare claims. They also said it would give UHG access to its competitors’ confidential information, and thus reduce competition and innovation in the healthcare industry.

Loretta Cecil | Executive Vice President and General Counsel | Change Healthcare

The discovery phase of the trial, which took place over Zoom in 2021 and early 2022, included depositions and meetings with Justice Department attorneys. Working with outside counsel, Cecil and her team managed the production of millions of documents in response to Justice Department requests.

The trial, which took place in August 2022, stretched beyond two weeks and included more than 1,200 exhibits, with more than 30 witnesses testifying. Because of the COVID-19 pandemic, Cecil had to prep her team, including outside counsel, remotely. Likewise, during an 18-month period, she kept the Change board apprised by conducting more than 20 board meetings.

In the end, U.S. District Judge Carl J. Nichols, a Trump appointee and former Justice Department lawyer, ruled in favor of Change and UHG. He found that a proposed divestiture and other protections offered by the companies would address the antitrust concerns.

The case was seen as a consequential antitrust decision. The Associated Press described it as a key testing ground for antitrust regulation, and the Wall Street Journal called the ruling a setback for the Biden Justice Department’s enforcement strategy.

“We were on the right side from the very beginning, and it’s just unfortunate that we were not able to convince the Justice Department of that during their Hart-Scott-Rodino review,” Cecil says. “We feel very vindicated and are happy to have closed the transaction.”

From IPO to acquisition

Change Healthcare was created in March 2017 as a joint venture between McKesson Corporation and the Blackstone Group. From then until June 2019, Cecil led the company through preparations for an initial public offering.

“We had to build everything from scratch in terms of corporate governance,” she says. “A good analogy would be if you buy a 1000-piece puzzle, and you see the photo of the completed puzzle on the outside of the box. We knew the type of governance we wanted, or photo on the outside of the box, and worked very hard to put all the puzzle pieces together. It was a monumental undertaking requiring significant support from our Change board.”

Cecil developed the entire corporate governance function; she had to support the board of directors and the executive team, and at the same time, identify risk and put mitigation plans in place. It was a bit of a gamble, starting from scratch—the decision was not without costs in time and expense.

But Cecil says their gamble paid off. In June 2019, Change became a public company listed on NASDAQ. And it was not long after that when UHG approached Change about the acquisition.

“I was very determined that every governance program we created would be best in class,” Cecil says. “Whether we stayed a public company or were acquired in a transaction, I knew risk mitigation would be fundamental given Change’s critical role in healthcare. Best-in-class governance is fundamental to mitigating risks.”

Complex compliance

Early on, Cecil convinced the rest of the executive team of the need to expand Change’s legal and compliance functions. She explained how risks impacted the company’s bottom line and participated in decisions on critical infrastructure investments. For example, because Change had access to patient information, the company’s infrastructure had to comply with state, federal and international data privacy laws.

But Change also had more than 60 different healthcare technology products, making Cecil’s task—privacy risk mitigation and maintaining the integrity of patient information—all the more complex. She had to create a privacy compliance program that was comprehensive yet flexible.

“You have to be able to tailor things, but at the same time, at the top level, you’ve got to have pillars of value and integrity in terms of how you’re going to run your privacy program,” Cecil says.

So, she and her team built out a program that was structured carefully at a high level but could be changed as needed for a particular product’s use of patient information. And it worked well, with Change successfully navigating risks.

She took the same approach with the many other compliance risks, too.

“The healthcare industry has access to the most private information about each of us, and healthcare companies must be able to safeguard it,” Cecil says. “At Change, we took that responsibility seriously. There wasn’t a day that went by when we weren’t focused on privacy obligations.”

A career built on courage and curiosity

Over the course of her career, Cecil has worked in three different industries with one common thread: complex regulation. She started out in the telecommunications industry, then worked in retail technology, then moved into the healthcare space.

“I developed an appreciation for how complex regulations can impact a business, and the need to translate and explain them so that boards and businesspeople can figure out how to deal with them in an appropriate, complaint way,” she says.

Cecil launched her legal career as an in-house counsel at AT&T in 1984, staying there nearly 18 years before leaving for a large law firm specializing in telecommunications.

In 2003, Cecil became general counsel and chief compliance and ethics officer for NCR Corporation’s retail cash register business, which provides digital banking software to retailers. Then, in 2006, she signed on as senior vice president and general counsel for McKesson’s healthcare technology business before joining the Change joint venture with Blackstone in 2017.

“As I look back on my career, I made a very good decision early on, and that was to maintain my curiosity and to be willing to go into areas that I did not have expertise in,” Cecil says. “And it was that courage combined with curiosity that really built my career.”

View this feature in the Vanguard Spring II 2023 Edition here.