Home » News » Currently Reading:

News 6/29/16

June 28, 2016 News 5 Comments

Top News


McKesson will divest its Technology Solutions business into a new joint venture company that it will co-own with Change Healthcare (the former Emdeon), with plans to take the new company public sometime in 2017. McKesson will own 70 percent of the new company and Change Healthcare will own 30 percent.

McKesson will retain its RelayHealth Pharmacy business as well as its Enterprise Information Solutions division, but will “explore strategic alternatives” for the latter, which includes its remaining go-forward hospital information system Paragon along with less-attractive products like Star, HealthQuest, and OneContent. McKesson seems to have lost most of its Horizon customers to Epic or Cerner after they declined to move to Paragon under McKesson’s Better Health 2020 program, so this latest move will likely cause more defections.

The new company will take on up to $6.1 billion in debt to fund the transaction.

Blackstone Group bought publicly traded Emdeon, which operated under the WebMD name through 2005, for $3 billion in 2011 and took it private in a leveraged buyout. It renamed the company Change Healthcare in September 2015 after January 2015 plans for a $5 billion IPO never materialized.

McKesson struggled from the beginning with its $14.5 billion acquisition of HBOC in 1998, dogged by a massive accounting scandal, the resultant firing of several executives who were involved, aging product lines, and a lack of corporate focus. The company, like several before it, dabbled in health IT dispassionately but with the added baggage of having wildly overpaid for an immediately impaired asset. MCK share price dropped and didn’t recover for 12 years under John Hammergren, who was quickly promoted to co-CEO in the leadership void in 1999, eventually becoming the country’s highest-earning CEO.

This transaction, along with the eventual disposition of Enterprise Information Solutions, will once again remove McKesson from the software business.


… but not the day after the transaction closes.

Your trivia questions for today:

  • Who was named as Hammergren’s co-CEO in the 1999 announcement that McKesson Chairman Charlie McCall and CEO Mark Pulido had been fired over HBOC’s accounting irregularities?
  • What was the name of McKesson’s short-lived online business that was launched in the heady dot-com days of 2000 and led by Hammergren’s former co-CEO, giving Hammergren full control?
  • What accounting company failed to detect widespread fraud as the auditor of both McKesson and Enron?

Reader Comments

From ProGoogler: “Re: Change Healthcare. Blackstone finally dumps Healtheon / WebMD / Emdeon / Change onto McKesson? Surprising that Change would dump all assets into a company they’ll only have a 30 percent stake in. HIStalk followers–what’s the take on this?”

From Silly Boy: “Re: McKesson and Change. Throwing their trash into a doomed-to-fail company, ridding themselves of all liability, and getting $1.5 billion each in cash out of it? Wow.” You forget to mention the advantageous tax accounting McKesson will use to walk away.

From Robert Higgins: “Re: dress while traveling. See this LinkedIn post, which says everybody should dress up while traveling on business because they represent the company and you should be extraordinary rather than ordinary.” I can’t imagine anything more mind-numbingly ordinary than a bunch of mid-level company hotshots wearing suits everywhere they go hoping to impress strangers who apparently value cloth over character. Real power players wear whatever they want (see: Mark Zuckerberg, Steve Jobs, etc.) while their un-creative, lemming-like underlings choke on ties. I’ve attended venture capital sessions at the HIMSS conference and my biggest takeaway was that the real money guys looked like they had just dropped by after a family cookout, while back at work my fellow IT management team members would illogically don their always-handy suck-up jackets for internal meetings or restroom trips.

HIStalk Announcements and Requests


The Tennessee elementary school students of Mrs. Jones have shown “amazing growth” in benchmark assessments, she reports, after practicing reading and math on the the three Kindle Fires we provided in funding her DonorsChoose grant request.

I don’t really do anything with LinkedIn except look up people’s job histories, but you are welcome to join the 2,477 people who have connected with me there, of which 351 have written me really nice recommendations. There’s also the HIStalk Fan Club created by Dann many years ago, now up to 3,617 members, many of them CEOs, CIOs, CMIOs, etc. I might tell my mom about it just to see her puzzled double take since surely she views me fondly and accurately as her low-profile ne’er-do-well.


July 13 (Wednesday) 1:00 ET. “Why Risk It? Readmissions Before They Happen.” Sponsored by Medicity. Presenter: Adam Bell, RN, senior clinical consultant, Medicity. Readmissions generate a staggering $41.3 billion in additional hospital costs each year, and many occur for reasons that could have been avoided. Without a clear way to proactively identify admitted patients with the highest risk of readmission, hospitals face major revenue losses and CMS penalties. Join this webinar to discover how to unlock the potential of patient data with intelligence to predict which admitted patients are at high risk for readmission.

Contact Lorre for webinar services. Past webinars are on our HIStalk webinars YouTube channel. Ask Lorre about her “Summer Doldrums Special” sale.

This Tuesday’s webinar by West Healthcare Practice drew nearly 500 registrants and will no doubt generate many YouTube page views after the fact. I always give my first-pass critique of our webinars and rarely have any change suggestions for West. Lots of readers are apparently interested in what Henry Ford is doing with contact centers (including me).

Acquisitions, Funding, Business, and Stock


Allscripts acquires RealCost.io — a decision support company founded by former EPSi executives Tim Rutledge, Ralph Keiser, and John Gragg – and will put the three men back on the Allscripts EPSi financial planning product line to serve as chief product architect, CEO, and COO of Allscripts EPSi, respectively. Eclipsys acquired EPSi in 2008 for $53 million in cash, followed by the acquisition of Eclipsys by Allscripts for $1.3 billion in 2010. All three left Allscripts from 2008 to 2011.


VistA vendor Medsphere and ambulatory PM/EHR vendor ChartLogic will merge.


EHR data sharing vendor Medal raises $3.8 million. Co-founder and CEO Lonnie Rae Kurlander is a 27-year-old medical student at Boston University.


MedAssets-Precyse renames itself nThrive. Pamplona Capital Management bought MedAssets for $2.7 billion in November 2015 and combined its RCM business with Precyse, another of its recent acquisitions.



Mercy Technology Services adds three clients: Riverview Health (IN) for Epic hosting, McLeod Health (SC) for data analytics, and Peninsula Regional Medical Center (MD) for Epic implementation support.



Medical informaticist Harris Stutman, MD (MemorialCare Health System) returns as “Jeopardy” champion Tuesday night following his wins on the Friday and Monday programs that earned him $39,700.

image image

Premier promotes Leigh Anderson to SVP/CIO, replacing the departing Keith Figlioli.


Microsoft promotes Simon Kos, MBBS to chief medical officer. It appears he went to work for industry (InterSystems, then Cerner) directly out of residency without actually practicing medicine.

Announcements and Implementations

Analysis by TransUnion Healthcare finds that patients experienced a 13 percent increase in their deductible and out-of-pocket maximum costs in 2015 at $1,278 and $3,470, respectively. “Patients are becoming the new payer,” the report concludes.

Vital IMages launches its application-neutral archive that connects proprietary data sets for interoperability and workflow.

Government and Politics


In England, Health Secretary and “Remain” supporter Jeremy Hunt calls for additional Brexit referendum votes or other “democratic endorsement of the terms” by which the UK will extricate itself from the European Union. He is considering running for Conservative leadership as prime minister, urging full trading access but with immigration restrictions. Hunt said previously that NHS would face budget cuts and staff shortages should the UK exit from the European Union, a statement pro-Brexit supporters characterized as fear-mongering. Meanwhile, “Leave” campaigners appear to be backtracking on their assertion that withdrawing will free up $467 million each week, of which they had promised that a large portion would be sent directly to NHS to improve healthcare services.

Privacy and Security


A hacker offers for sale the records of 655,000 patients from three unnamed US provider databases and reports that some of the information in them has already been sold. DeepDarkOverlord says he or she exploited an unstated vulnerability in RDP (remote desktop protocol) to take control of the provider computers and steal their patient data, after which he or she offered to return the data for a ransom that the providers elected not to pay. The prices range from $100,000 to $411,000 for each of the three databases:

  • An Access database of 48,000 patients from an unnamed healthcare organization in Farmington, MO.
  • A plain text database of 210,000 patient records stolen from a Midwestern provider
  • A plain text database of 397,000 patient records retrieved from an unnamed Georgia provider.


Apparently one of the hacked providers uses the SRS EHR, based on the hacker’s screen shot of  him or her taking over a Windows 2008 server at the unnamed Georgia site.

The same hacker is also offering a 9.3 million patient record database from an unnamed insurance company, stolen using the same RDP exploit. Security researchers tested sample data and believe it’s an old database since many of the telephone numbers and email addresses it contains are no longer valid.


Comcast Business creates its largest Eastern US network in providing 100 Gbps Ethernet connectivity between the campus of Penn State Health Milton S. Hershey Medical Center (PA) and the university’s data center.



A survey finds that EHR-using physicians are less satisfied and more burned out, with physician satisfaction low for performing both EHR documentation duties and CPOE. Family medicine, ED, and orthopedic surgery are big trouble spots, while surgeons and ever-affable pediatricians are happier. Interestingly, the method of documentation didn’t affect the burnout rate much – it was about the same for dictation, voice recognition, handwriting or typing, and using scribes. Only 36 percent of respondents said the EHR has improved patient care and just 23 percent said it has increased their efficiency.


Bob Wachter, MD cashes in on the success of his book “The Digital Doctor” in hiring himself out as a thought leader and video star to malpractice insurer The Doctors Company, a role he describes as, “My partnership with The Doctors Company will provide its 78,000 members and other physicians nationwide with the tools and information needed to thrive in today’s rapidly changing digital landscape.”

Sponsor Updates

  • FormFast publishes a new white paper, “Delivering ROI: The Case for Electronically Capturing Patient Signatures.”
  • FujiFilm will exhibit its Synapse product line at SIIM 2016 June 29-July 1 in Portland.
  • A study finds that hospitals that use Nuance’s clinical documentation improvement solutions score better in patient mortality ratings.
  • Meditech held its Nurse and Home Care Forum June 15-17 in Foxborough, MA.
  • Glendora Community Hospital (CA) goes live on electronic forms from Access and signature pads from Wacom in the ED and admission areas.
  • Bernoulli CIO John Zaleski will speak at the IEEE Chase 2016 Conference on Connected Health June 29 in Arlington, VA.
  • Besler Consulting wins a B2B Marketer Award for Best Contribution to Sales Account-Based Marketing.
  • Carevive Systems shares its latest poster presentation, “Implementation of Survivorship Care in a Network Hospital Setting.”
  • CTG and Catholic Health Systems will co-host a symposium, “Exploring the Impact of Security Threats: Is Your Organization Prepared,” June 29 at CTG headquarters in Buffalo, NY.

Blog Posts


Mr. H, Lorre, Jennifer, Dr. Jayne, Lt. Dan.
More news: HIStalk Practice, HIStalk Connect.
Get HIStalk updates.
Send news or rumors.
Contact us.


View/Print Text Only View/Print Text Only

HIStalk Featured Sponsors


Currently there are "5 comments" on this Article:

  1. Co-CEO of McK was Graham King,previously with SMS.
    CPA was Anderson of Enron fame!

    [From Mr H] Incorrect on #1, correct on #2. King was named president of the IT business that day, but not co-CEO of the whole company.

  2. Christine Sinsky continues to write the same paper with multiple different co authors and many different corporate and research sponsors.

    Yet, we continue to respect it as news each time she does it?

    Same with Wachter.

    Self aggrandizing headline grabbers in it for personal profit.

    Mr. H – I could see it if you signed them up as proper sponsors, or let them do the ever biased “readers write” segment, but not as news any more.

Subscribe to Updates



Text Ads

Report News and Rumors

No title

Anonymous online form
Rumor line: 801.HIT.NEWS



Vince Ciotti’s HIS-tory of Healthcare IT

Founding Sponsors


Platinum Sponsors






















































Gold Sponsors

















Reader Comments

  • RevenueCycleRambo: I have good insurance and significant personal cash reserves. However, my main reason for avoiding hospitals that sue pe...
  • Brian Too: "If it is true that there is no cost too high for life saving healthcare ..." It isn't true though. We say things li...
  • Associate CIO: I believe they will be keeping HealtheIntent in similar fashion to what Geisinger is doing (Epic EMR/Cerner HealtheInten...
  • Chilly Illy: Will Advocate remain a showcase install for HealtheIntent or are they pulling the plug on that too?...
  • Mr. Natural: Only 25%? I thought the waste attributed to Administrative Overhead was found to be way larger in other studies? ...
  • richie: The aligned analogy may be "Factory authorized maintenance" (service) as "water" is an object. As if sizzle (stories) is...
  • Adnan Jamil: Hi, I am working as a virtual scribe with one of the vendors of Augmedix for the past 3 years and would like to throw...
  • ttrsld: It's not that relevant to the situation at hand and sort of wrong. You can say the same things about clean water for exa...
  • Employee341541432: Right, it is pushing you to eat at the company cafeteria, not giving you money for the best steak in town....
  • Ian Shakil: I'll provide the Augmedix point of view, which is probably relevant b/c we are by far the biggest in the space and we of...

Sponsor Quick Links