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Sale of McKesson healthcare IT assets sparks wary reaction

McKesson Corp.'s spinoff of much of its health IT portfolio has raised concern among some users about the future of its medical imaging and EHR systems.

McKesson Corp.'s spinoff of the bulk of its health IT portfolio has sparked concern among some users and medical imaging professionals about the future of the healthcare giant's IT systems.

The sale of the McKesson healthcare product lines -- including its radiology picture archiving and communications systems (PACS), imaging software and population health, analytics and other programs -- is part of McKesson's intent to consolidate its disparate health IT offerings.

McKesson user muses on future

One user of McKesson healthcare imaging technology, Evan Kaminer, M.D., director of imaging at Nyack Hospital in New York, said he is concerned about the long-term future for McKesson's radiology workflow intelligence system, Conserus.

"I think we'll get the same support in the short-term, but I don't know what the transition will be like," Kaminer said. "Whenever transitions like this happen, we get nervous."

Used in conjunction with a McKesson PACS, Conserus enables radiologists to flag the most critical cases that need attention.

"They've done a great job stewarding this," Kaminer said. "Hopefully, in the future it will continue to be a great product."

Nyack Hospital uses Paragon as its electronic health record and just upgraded to the latest release of McKesson's hospital EHR, Paragon Version 13. The Rockland County, N.Y., hospital was recently acquired by Montefiore Medical Center in the Bronx, N.Y., which recently installed an Epic Systems Corp. EHR.

Sale seen as positive for core business

Most observers, however, said the move would help the giant McKesson healthcare company focus on its core pharmacy and lab system businesses.

The new entity, Change Healthcare, would merge Change's existing revenue cycle management systems with most of the rest of McKesson's Technology Solutions division, which includes its RelayHealth pharmacy IT system and health information exchange, and imaging, analytics and population health products.

McKesson healthcare officials positioned the spinoff as one that would take advantage of both companies' strengths and offer a suite of compatible technologies that could help customers navigate the changeover to value-based care.

"An independent company unlocks value for our shareholders by creating a company focused on healthcare technology that will be valued in line with healthcare technology peers, as opposed to being part of a larger organization whose primary focus is on distribution solutions," John Hammergren, McKesson chairman and CEO, said in a statement.

Healthcare conglomerate's deal still pending

Under the deal, yet to be finalized, McKesson would own 70% of the stock, before putting out an initial public offering; McKesson would then depart from the company, which is expected to have $3.4 billion in sales.

With some $137 billion in annual revenues, the McKesson healthcare company is a diversified conglomerate of which its EHR, part of its Enterprise Information Solutions division, is only a small part.

In recent years, McKesson's EHR market share has been dwarfed by the two biggest EHR-only vendors, Epic and Cerner Corp.

While the company is for now holding onto Paragon and its RelayHealth pharmacy IT systems, it said it would seek to also divest itself of the hospital EHR, an expected move that has the potential to strand existing customers.

Earlier this year, McKesson sold off its ambulatory EHR technology to e-MDs Inc., a physician practice management system vendor.

Joe Marion, a Milwaukee-based imaging and PACS expert, said the move made sense for McKesson, as does the prospective divestiture of its EHR business.

"McKesson is looking at it going forward, whether it's a synergistic market with respect to the rest of their business; perhaps it's not," Marion said of the Technology Solutions division. "As a business unit, they've done quite well, but no matter how well you do, if you're not a good fit in the long-term strategy of an organization then you've got to look at alternatives."

Next Steps

Alliance for interoperability between McKesson and Cerner

McKesson's EHR behind Epic's and Cerner's

McKesson healthcare technology includes EHR-radiology interoperability

Dig Deeper on PACS (Picture archiving and communication system)