H.I.S.-tory

by Vince Ciotti

© 2013 by H.I.S. Professionals, LLC, all rights reserved.

Episode #121:

McKessonPart 9 = More

M & As

More Major Mergers• After last week’s coverage of the McKesson/HBOC meltdown, it’s

nice to pick up the story of how McKesson rebounded from the 1999 lawsuits and scandals to get right back into M & As again.

• Here’s some of their bigger ones over the next few years:– 2000 = MED-Solution, an RX system developed by Health Care

Systems, Inc, renamed “Pathways Meds Manager.” Like every other HIS product seems to have been at one time or another, it was rated by industry consultant KLAS Enterprises as the #1 in terms of performance, value, customer satisfaction, and the amount of money that they spent over the years buying KLAS’ market research reports. Within days, Pathways Meds Manager was integrated with other McKesson/HBOC clinical solutions’ proposals, contracts, PowerPoints, brochures, ads, and demos. Then over many subsequent years, interfaces were slowly built between the products themselves…

A Picture-Perfect Deal• Kidding aside, the next deal was a quite a coup in the PACS world:

– 2002 = ALI – In May acquired Vancouver, BC-based ALI Technologies for $340 million. McKesson now expanded its flagship Horizon Clinicals, to include data, documents, voice, and medical images via ALI’s medical image management and PACS. ALI’s high-profile client base included such notables as:

• Cedars-Sinai Medical Center• Johns Hopkins University Hospital• St. Luke's Episcopal Hospital, and • Kaiser Permanente.

A good deal for ALI, as McKesson had ≈40 times more sales staff than ALI (500 versus 12) with systems installed in about half of all U.S. hospitals larger than 200 beds...

A Banner Year• 2007 was a major merger year for McKesson with three big deals:

– 1. Per Se – at “only” $1.8B, this deal may not have been that big per se, compared to the $14B McKesson spent for HBOC, but Per Se was a series of acquisitions…, oh well, per se:

• NDC Health's revenue-cycle management business, bought that same year, gave McKesson an entrée into RCM.

• Previous acquisitions by Per Se over its HIS-tory included:– Health Data Services– Rapid Systems– Atwork– Medaphis– Consort– Medical Consult– GFS, etc, etc, etc.

RH Positive• 2. Relay Health – Acquired

by McKesson in June of 2007, over the previous 3 decades RH had turned HIPAA privacy regulations into the lucrative business of providing secure communications between patients, providers, pharmacies, payors and pharmaceutical manufacturers.

• It’s a shame Target never knew about them…

How Do You Get To Carnegie Hall?• 3. Practice Partners – I

must confess that even I get confused with the differences between Practice Partner and Practice Point Plus, which McKesson had acquired earlier, let alone the recently announced “integrated” ambulatory solution for Paragon!?

• Ah well, practice makes perfect…

Recap of All the Deals• Anyway, here it is: a visual recap of the biggest HIS vendor that

acquired the most vendors/products over its 50 years of HIS-tory:

So?• So what that McKesson was built from scores of mergers &

acquisitions over the past 50 years? These M & A roots explain what is easily the most complex product line in HIS-tory, to whit:

AccessHealthAcuDose-RxAdvantage CatalogAlliance PartnersAnesthesia CareAnesthesia-RxANSOS One-StaffApplication HostingApplication ServicesAR ProcessingAsset ManagementANSOS One-StaffAutomation Decision Support Bar-Code Medication PackagingBehavioral CoachingBiometric Identity ManagementBrand for Surgery CentersBusiness Consulting ServicesBusiness FolderBusiness Improvement Services

Capacity PlannerCardiology ManagementCareEnhance Review ManagerCentral FillClaimCheckClaimsXtenClear Claim ConnectionClear CoverageComplyScanComputing SolutionsConnect-RxContract ManagerControlled Substance OrderingDisease Management ProgramsDistribution ExcellenceED Benchmarks CollaborativeEducation and TrainingEmployed Physician ServicesEMR and ePrescribingEnterprise Content Managementr

Enterprise Image RepositoryEnterpriseRx AREquipment for Surgery CenterseShifteSig CapturePLUSExpert HelpFiscal ManagementFreight PaymentFrontEdgeFulfill-RxGift Card MallHealth & Wellness ProgramsHealth Buddy ApplianceHealth MartHealthcare Perf BenchmarksHealthy Valu$HomecareHorizon Blood BankHorizon Lab

But Wait, There’s More:Imaging Link EngineIndustry LeadershipInfrastructure ServicesIn-Office DispensingIntelligent CodingInterQual Behavioral HealthInterQual Care PlanningInterQual Clinical EvidenceInterQual Content CustomizationInterQual Coordinated CareInterQual Behavioral HealthInterQual Learning SourceInterQual Level of Care CriteriaInterQual Molecular DiagnosticsInterQual OnlineInterQual Specialty Rx CriteriaInterQual TransparencyInterQual ViewInterRater Reliability SuiteInvestiClaimIT Help Desk ServicesIVRxLab Order ManagementLoyaltyScriptLynx MobileLynx TotalViewLytec and Lytec MD

Managed ServicesMAX ImpactMcKesson 340B ManagerMcKesson Advantage CatalogMcKesson Anesthesia CareMcKesson Biometric IdentityMcKesson Business FolderMcKesson Capacity PlannerMcKesson CardiologyMcKesson Content ManagerMcKesson Image RepositoryMcKesson Fiscal ManagementMcKesson Home HealthcareMcKesson HospiceMcKesson Intelligent CodingMcKesson Mobile ManagerMcKesson OneStop GenericsMcKesson Patient FolderMcKesson Performance AnalyticsMcKesson Pharm OptimizationMcKesson Point of Use SupplyMcKesson Population ManagerMcKesson Practice CareMcKesson Practice FocusMcKesson Practice PlusMcKesson Preferred Rewards

McKesson Quality MonitorMcKesson RadiologyMcKesson Revenue ManagementMcKesson Risk ManagerMcKesson ScanManagerMcKesson Strategic SupplyMcKesson Study ShareMcKesson Supply ChainMcKesson Surgical ManagerMcKesson Telehealth AdvisorMcKesson Time and AttendanceMcKesson Unsaleable ReturnsMcKesson VITAL Business InsightMedCarouselMedical Imaging WorkflowMedication Safety CabinetMedisoftMedShelf-RxMolecular DiagnosticsMoney ManagementMy Care PlusNarcStationNational Consumer OutreachOneStop GenericsOnmarkOR Benchmarks CollaborativeOTC Consumer Products

And Finally:PACMEDParagon Pathways Healthcare SchedulingPatient Assistance ProgramsPatient FolderDeficiency CompletionPatient Satisfaction SurveysPerformance AnalyticsPerformance VisibilityPharmaceutical DistributionPharmacy Decor and FixturesPharmacy Engagement ProgramsPharmacy Management SolutionsPharmacy Optimization ServicesPharmacyRx HardwarePharmacyRx SuitePharmaserv Physician Resources and InfoPlasma and Biologics DistributionPlayMaker CRMPoint of SalePoint of Use SupplyPoint-of-Sale for Pharmacy RxPopulation ManagerMcKesson Practice CareMcKesson Practice ChoiceMcKesson Practice Complete

Practice FocusPractice Man. TechnologiesPractice PartnerPrefer RxMcKesson Preferred RewardsPrescriber-Pharmacist InterfacePricing ServicesPrinting ServicesPriority ExpressProcessing ServicesProfessional CertificationPROmanager-RxProvider ManagerPurchasing ToolsQuality MonitorRadiology Reimbursement ManagerReprocessing ServicesRetail ExpansionRetail Independent Pharmacy Revenue Cycle Management Review Manager EnterpriseRisk Evaluation and MitigationRisk ManagerROBOT-RxRxPak

ScanManagerSecure Data ProtectionServiceFirst Customer RelationsSIM plusSKY Unit Dose PackagingSpecialty DistributionStrategic OutsourcingStudy ShareSunmark Private BrandSupply Chain ManagementSurgery Center EducationalSurgical ManagerSurgical Scope RepairTechnology and IntegrationTelehealth AdvisorThird-Party ContractingTime and AttendanceTraining and Education ServicesTrialScriptUnsaleable Returns ProgramVIP GoldVITAL Business InsightVITAL Consumer PortalWeb Reporting for ANSOS Wellness ProgramsWorld-Class LogisticsYour Pharmacy Online Website

Interesting Questions• Over 200 different products! Makes one wonder:

– How much would it cost to buy all of them?• Say, an IDN a with hospital, physician practice,

home health care, retail pharmacy, etc?– How long would it take a the Atlanta HQ to prepare

a proposal and contract to buy all 200 products?• How many pages printed on paper for signing?

– How long does it take to train a new sales rep in all of these products’ many features & prices?

• How many reps does it take to sell them?• And when I joined SMS in 1969, I thought their SHAS

system was complicated with 5 distinct products: – Census, Billing, AR, GL and Cost Allocation…