McKesson War Games

By Cristina DeVito, Michelle Sullivan, Michelle Cox, Sarah Monickam, Theresa Osredker

Category:

Comedy

Tags:

• McKesson
• War
• Games

[DrAlemi]

From Kim D. Slocum, FHIMSS, President, KDS Consulting, LLC

(Continued from previous)

The team also identified that HIT is something of a sideline for the company (interesting query to the team: do you know how and why McKesson got into HIT in the first place?). The team also hit upon one of the absolutely key points of the HIT industry—that its fragmented. Their idea of using the firms size to become a consolidation player is excellent and may actually wind up happening in real life.

[HESY566]

Not aware why they got into HIT, will have to look that up...

We would remind our classmates that cellular and broadband were once a sideline business for AT&T, and Amex is currently becoming a bank holding vs cc company...might be a better future in HIT than in distribution. Suspect they will continue in both. Yellow Roadway turned a trucking company into a logistics firm with a huge global footprint (YRC Worldwide). McKesson may be on that path.

[DrAlemi]

From Kim D. Slocum, FHIMSS, President, KDS Consulting, LLC

(Continued )

Did the team also understand that many McKesson software products deal with the back office functions of health care in hospitals and thus would not qualify for funding under ARRA? I would suggest to the team that while it was accurate in its assessment of McKessons relatively weak standing with the government (thats a sector thats dominated by SAIC at present), this probably isnt McKessons biggest challenge.

[HESY566]

We think those back office functions, known for incorporating lean management, etc provide a good revenue stream while decisions freeze/delay in other areas; also those products help address the #1 concern of CEOs: finances in this stressed time.

[HESY566]

This is not to say that we are ignoring ARRA opportunities, the core of this war game exercise. Our point is that it may be slower to roll out than hoped, and we want to strategically add value to our clients so when it does roll out, we are on their minds.

[HESY566]

Of note: we looked at ARRA funding opportunities beyond that most identify with HIT. There's "hidden" money in the FCC, Commerce, and USDA to specifically drive broadband buildout with an eye towards health care and education. Opportunities here for some of McKesson's products, and it fits with the recent Community Health Systems project. Not massive, but worth pursuing, and links to the rural vet health projects as well.

[HESY566]

Re: SAIC--the firm everyone loves to hate, and GAO has been criticizing. There seems to be a move afoot to throw some contracts to others. We don't think we can displace SAIC (David vs Goliath) but perhaps, if we had a good fed partner, our rich applications could help win a bit of business. Our opportunity could lie with HRSA in products which advance EBM like Study Share/PACS. Govt programs with rural clinics and critical access hospitals could also benefit from our services.

[HESY566]

More than anything, offering PHR (cheaply or even free) is just a way to get our name out to the specialty providers who might run the websites we would use. Not sure the end patient cares who the EMR people are, but could further brand awareness, sense of ubiquity etc. Not a high priority in any case.

[HESY566]

Also, we are anxious to hear what you think McKesson's biggest challenge is!

[HESY566]

One of our slides had a bullet on leveraging the CHS sale. Not enough time to expand, and we should have. We see tremendous opportunity in the community clinic, critical access and ambulatory care sector. We're not fan of selling to the small physician--they are dying breed. We like the model where the hosp links HIT to the doc, with the doc making the min investment required by law. Docs will consolidate-bigger practices r mkt. U r right on PHR--we see limited mkt for us there. Continue.

[DrAlemi]

From Kim D. Slocum, FHIMSS, President, KDS Consulting, LLC

The team correctly identified that McKesson is a general health care supply firm (i.e. a wholesaler) rather than an HIT firm.

(Continued below)