Mckesson Corporation is one of the largest health care service providers in the country. The company’s various operations span the health care spectrum and include enterprises such as pharmaceuticals, retail pharmacy automation, surgical supply management, and health care technology solutions. McKesson was founded in New York City’s financial district in 1833 by Charles Olcott and John McKesson.
From the beginning, the company had a history of seizing opportunities for growth and expansion. Although Mckesson began as a wholesaler of chemicals and therapeutic drugs, they took advantage of the increasing global trade market by establishing a reciprocal relationship with many companies in the growing shipping market.
“Through these relationships with the shipping industry, the company expanded and increased its distribution of pharmaceuticals to 17 states” (McKesson Corp, 2012). In 1855, Mckesson was one of the first wholesale houses to manufacture drugs. By the early 1900’s the company again expanded and became a leading distributor of pharmaceutical and drug products in the US. Mckesson soon became a national drug wholesale company, and began to expand its focus on areas of business outside of healthcare.
Mckesson has a long history employing mergers and acquisitions to gain access to novel products and increase its viability in new emerging markets. During the 1960’s, the merger with Foremost Dairies resulted in the formation of Foremost Mckesson Inc., which later became a multiregional distributor of hospital and laboratory supplies and equipment. Even today, acquiring other businesses and products is a large part of the company’s business approach. The following excerpt on this business approach comes from the San Francisco Business Times:
“Acquisitions have historically been part of our strategy, and will continue to be in the future,” stated President Brian Tyler, EVP of corporate strategy and business development. “We’ve probably spent $2 billion on acquisitions in the alternate site market in the past few years.”
“Some of McKesson’s other software acquisitions in the past year alone include but are not limited to: Med3000 in October 2012, MedVentive in September 2012, Portico Systems in June 2012, System C Healthcare (British software firm) in March 2011. System C makes the Medway software used in 40 National Health Service and private hospitals in the United Kingdom.
The software includes electronic medical records, business management, and online applications, among others” (San Francisco Business Times, 2011). During the 1980’s and 90’s, McKesson began to focus more on its healthcare division and started to move away from its un-related businesses. “They acquired automated healthcare and general medical, McKesson then became the largest distributor of medical-surgical supplies at that time” (McKesson Corp, 2012).
Betting that software sales would stimulate medical product and pharmaceutical sales, and vice versa, in October of 1998, McKesson Corp. merged with Atlanta-based HBO & Co., a developer of hospital information systems. In July of 2001, Vanderbilt University Medical Center sold the rights for commercial development of WizOrder, Vanderbilt’s computerized clinician order entry system (History of WizOrder at VUMC, 2012) and signed a strategic relationship with McKesson HBOC Inc. Back in the 1990s Dr.
Randy Miller, M.D. and Antoine Geissbuhler, M.D. developed Wiz Order (Govern), 2004) with the aim of improving clinical decision-making. This was in line with McKesson’s goal to deliver a world-class solution for advanced clinical decision support and expert physician order entry. McKesson’s newly acquired solution would later become known as Horizon.
Mckesson envisioned a product that would electronically tie together consumers, pharmacies, hospitals, distributors and manufacturers to “improve case management and disease management” and to give its vendors “information access to the flow of products across the continuum of care” (Repetoire, 2007). By the end of 2007, the company’s offerings included the following: Horizon Ambulatory Care, an electronic medical record system for automating the clinical functions of a group practice;
Horizon Expert Prescribing, a CPOE application; a practice analysis and reporting tool; a Home Care supply management system; and Practice plus, a communication tool designed to connect patients with their physician’s offices. On 9 December 2011, in a letter to clients, McKesson described its new Better Health 2020 strategy, part of which is designed to “improve patient safety and deliver better clinical and financial outcomes through a fully integrated core clinical and revenue cycle IT system” (San Francisco Business Times, 2011). The move to the Paragon solution suite addressed this new integrated path to health IT.
McKesson, now “the world’s largest health care services company,” has a combined customer base of about 5000 hospitals, 25,000 retail pharmacies, 35,000 physician practices, 10,000 extended care sites, 450 pharmaceutical manufactures, and 2000 medical-surgical manufacturers (Chicago tribune 1998). Mckesson has a 13.2% market share of the Health Information Technology industry and employs roughly 37,000 people.
Mckesson’s hospital information system solutions includes their electronic health record system (HER, Total Coordinated Care product suite, InterQual Decision support products, Advanced diagnostic management, Care Management services as well as the Business Intelligence and Claims Performance products. Collectively, these various applications allowed McKesson’s Healthcare IT division to serve diverse areas within the health care continuum. Regarding its management, McKesson’s Executive board is headed by John Hammergren, Chairman and CEO of Mckesson Corporation. Dave Souerwine is the current President of McKesson Provider Technologies.
As president, Souerwine has overall leadership responsibility for all of the company’s North American operations and leads product development, implementation services, customer support, and the sales and marketing functions for all products within the Division. Several senior executives help shape the business’s strategic direction including Jeremy Chandler, a Senior Vice President responsible for all hospital clinical solutions at McKesson Provider technologies, and Jim Pesce, the president of the Paragon solutions product” (Columbia University, 2012).
Paragon is in use by more than 100 hospitals and health systems across the United States and Puerto Rico. Community Hospitals and Wellness Centers (CHWC), a three-facility system based in Bryan, Ohio became the 100th hospital to go live with the integrated financial and clinical software system In December of 2010. The majority of the hospitals fall within the less than 200 bed range. Table 1McKesson Paragon Clinicals Hospital Bed Size Distribution| Bed Size| McKesson Paragon Clinicals|
0 – 200 Beds| 201 – 500 Beds| Over 500 Beds|80.8%| 17.8%| 1.4%|Note. ( KLAS Enterprises, LLC. All rights reserved., 2011)|
Mckesson has described their paragon system as an easy-to-use; comprehensive Microsoft Windows based clinical software application that contained intuitive, easy-to-use interfaces and functionality. “Something anyone could pick-up, figure out, and start using right away at a basic level with little or no training” (Mckesson Corporation, 2011). Table 2 shows end-user feedback scores for the Paragon Clinicals product. Table 2McKesson Paragon End-User Feedback on Functionality and Satisfaction| | McKesson Paragon| Software Average|
Product has needed Functionality| 58%| 70%|Ease of use| 7.1| 7.4|Functionality & Upgrades| 75.1| 79.3|Note. ( KLAS Enterprises, LLC. All rights reserved., 2011)|
These scores unfortunately placed Paragon below its top competitors 79.3 average score. Since its arrival, Paragon has generated mixed reviews. In a March 2012 industry article, it was reported that “Gaps and weaknesses in the Paragon suite do exist.” Gaps that require complementary McKesson tools, “i.e. (ambulatory, DMI) and weaknesses in the product (ED, lab) are a few examples” (Byers, 2012).
McKesson recently committed millions of dollars to Paragon’s development, moving resources away from Horizon Enterprise Revenue Manager to bolster implementation, support and development for Paragon—it is assumed that the added resources will result in a number of improvements. The lack of knowledgeable resources during go live was captured in the October 2012 Klas surveys by a number of responders:
The Interoperability between different electronic health record (EHR) systems is one of the most important requirements that hospitals and physicians must meet as they prepare their systems for attestation in Meaningful Use Stage II. The capability to exchange health information that is structured and coded in standard format must also be across vendor products for real interoperability and not just within single vendor EHRs within a large provider system.
McKesson’s literature suggests that Paragon is poised to addresses this issue of intraoperability. In their October 2012 Klas report, Paragon received a score of 7.0 on a 10pt. scale in the sup category for “supports integration goals. Siemens did slightly worse with a score of 6.8.
Table 3October 2012 KLAS Score Report for Integration Goal Support of Top HER Vendors| | Epic| Cerner| McKesson| Siemens| Meditech| Software Avg.| | 8.2| 7.5| 7.0| 6.8| 7.2| 7.2|
Note. ( KLAS Enterprises, LLC. All rights reserved., 2011)|
One of the shortcomings of Paragon’s predecessor Horizon was that it failed to facilitate this need. “As hospitals and clinics implement tightly connected communities of care, an interface engine will play a key role in the exchange of patient data between the different providers, and ultimately between the different EMR’s” (Byers, 2012). Paragon’s functionality was publicized as possessing mobile capabilities to support an “on the go” work style, integrated clinical guidance and content from trusted, credible sources.
“Tight workflow integration between Paragon HIS and other McKesson solutions improves collaboration and quality of care” (Mckesson Corporation, 2011). The real question is how well does paragon “plays’ with other EMR’s. That will be the real test for MU stage II.
Health Information Exchange (HIE) focuses on the mobilization of healthcare information electronically across organizations within a region or community. HIE provides the capability to electronically move clinical information between disparate health care information systems while maintaining the meaning of the information being exchanged. Each EMR or hospital information system has a slightly different data format or communication requirement, and an interface engine delivers the flexibility to handle the exchanges efficiently and securely.
Paragon’s functionality was publicized as possessing mobile capabilities to support an “on the go” work style, integrated clinical guidance and content from trusted, credible sources. “With Paragon, all patient data – lab, radiology, transcription, care planning, nursing and ancillary documentation – is available in one system. This eliminates the need to search for patient data in multiple places and systems and helps clinicians focus on providing the best patient care,” (Mckesson Corporation, 2011).
Paragon has received Complete EHR certification—this indicates the software is capable of enabling providers to meet the Stage 1 meaningful use measures required to qualify for funding under the American Recovery and Reinvestment Act (ARRA). It was also tested and certified under Drummond Group’s Electronic Health Records Office of the National Coordinator Authorized Testing and Certification Body (ONC-ATCB) program, the EHR software is 2011/2012 compliant in accordance with the criteria adopted by the Secretary of Health and Human Services.
In regards to Paragons ability to attest to MU stage II: “Meaningful Use Stage 2 measures will propel electronic healthcare communication from its current state of disarray toward the ultimate goal of nationwide health information exchange, according to National Coordinator for Health IT, Farzad Mostashari, MD, ScM.” (Gale, 2012) The goal of a national health IT system is to make sure information follows the patient regardless of geographic, organizational, or vendor boundaries.
Dr. Mostashari has also emphasized that in order to meet stage II MU, there has to be at least one instance in which providers exchange an electronic summary of care with all the clinical data elements between different EHRs (Gale, 2012) In 2014, Electronic health records will need to be able to perform a number of functions using standards that will make actual information exchange possible for transitions of care, throughout the health care delivery system, upon discharge from a hospital, and to be shared with patients as well.
While McKesson may be topping the FORTUNE 500 list, according to the midterm performance review of products and services, the company appears to be in the middle of the pack when evaluated against its top competitors in the arena of information technology services. In comparison to a year ago, McKesson Paragon Clinicals overall ranking has dropped from around an 81 to about 76 based on the October 2012 KLAS trending report. .
McKesson’s Paragon Clinicals Top competitors are as follows: Epic (EpicCare Inpatient EMR) Cerner (Millennium Power Chart), Siemens (Soarian Clinicals) and Meditech C/S (Enterprise Medical Record (v.5.x and lower). The applications were evaluated in five main areas: Sales and Contracting, Implementation & Training, Functionality & Upgrades, Service & Support, and General. In most subjects, McKesson’s scores are lower when compared to its top competitors. Although there were a few areas where they were not the lowest, McKesson continues to perform at a lower range in comparison.
There were 394 comments posted in the October 2012 KLAS survey by Paragon end users, of this number 184 were Negative, 170 were positive and 40 were neither negative nor positive. There are significant differences between the clinician user feedback versus the administration’s feedback. If we take a look at sheer numbers alone, out of 396 total responses, there are only 10 positive clinician reviews on the product. The clinicians are the actual users on a daily basis; therefore, those responses are more noteworthy.
“Paragon Clinicals doesn’t currently meet my expectations, and a lot of our providers are upset about the problems with dropped connectivity, with jumbled-up screens, with saving data in patient charts, and so forth,” stated an anonymous director in the most recent KLAS report.
Other comments pointed out a pervasive, “lack of continuity” and a “deviation from a suite of applications with similar technology,” stating that there is “no common framework that [the application is] working under. We went from a very standardized suite of applications in Paragon to several applications that appear to have been built in a vacuum with their own development teams.between the different screens,” commented a physician.
With, “constant crashes,” and constant “technology problems here and there that plague the system,” many users feel that that the system is “very difficult to work on.” All of these issues have resulted in a lack of confidence in the system, one physician going as far to say that they have “zero confidence in the system itself.”
Despite all of this, the biggest frustration seems to be that “they can’t tell me when that upgrade will be,” as stated by that same anonymous director. “We aren’t convinced that Paragon Clinicals was the right decision for our hospital.” ( KLAS Enterprises, LLC. All rights reserved., 2011).
Works CitedKLAS Enterprises, LLC. All rights reserved. (2011, September 17th ). Paragon Cliniclas Source. Retrieved from www.KLASresearch.com: www.KLASresearch.com Byers, J. (2012, march 2). Industry News. Retrieved from Health Care Technology Management:
http://www.healthcaretechnologymanagement.com/index.php?option=com_articles&view=article&id=32430:klas-report-dissects-mckessons-it-successes-challenges%20 Columbia University. (2012, october). Unit 1 – Common Commercial Electronic. Retrieved from
https://www.cirg.washington.edu/nmeth527/onc/Comp14/Comp14_Unit1/comp14_unit1_lecture_handout.pdf Gale, L. (2012, August 30). Government News. Retrieved from Healthcare Technology Management: http://www.healthcaretechnologymanagement.com/index.php?
option=com_articles&view=article&id=35021:mostashari-hard-to-meet-measures-will-move-data-exchange-forward Govern), N. H. (2004, summer). Informatics. Vanderbilt Medicine vol. 21 num. 11, pp. 11 – 12.
HIS TALKS. (2012, september 28). News 9/21/12. Retrieved from HIS Talks: http://histalk2.com/2012/09/20/news-92112/ HIStalk. (2012). Retrieved from http://histalk2.com/2012/09/20/news-92112/ History of WizOrder at VUMC. (2012, December). Retrieved from Vanderbuild Informatics Center: http://informatics.mc.vanderbilt.edu/archives/WizOrder Lewis, N. (2012, August 27). EHR Interoperability Key For Meaningful Use Stage 2. Information Week.
Retrieved from http://www.informationweek.com/healthcare/interoperability/ehr-interoperability-key-for-meaningful/240006244# McKesson Corp. (2012, October 17). McKesson Corp – About Us. Retrieved from Mckesson: http://www.mckesson.com/en_us/McKesson.com/About%2BUs/About%2BUs.html McKesson Corp. (2012). Our History.
Retrieved from http://www.mckesson.com/en_us/McKesson.com/About%2BUs/Our%2BCompany/Our%2BHistory.html Mckesson Corporation. (2011). Paragon Hospiotal Information System. Alpharetta: Mckesson/Paragon Practice Partners. Pesce, J. (2011, vol. 5 issue 1). ARRA and Reform – For Rural Hospitals Too. Retrieved from McKesson -Performance Strategies for Healthcare Leaders: