McKesson to create new health IT company
- McKesson and revenue cycle management firm Change Healthcare Holdings have completed a deal to create a new healthcare technology company, the companies said Wednesday.
- The new company, called Change Healthcare, combines a majority of McKesson Technology Solutions with virtually all of CHC. McKesson has a 70% ownership stake in the enterprise versus CHC’s 30% stake.
- McKesson announced the plan last June, ending weeks months of speculation about the drug distributor’s plans for its IT business.
As part of the deal, Change Healthcare raised $6.1 billion in debt, which was used to fund cash payments of roughly $1.25 billion to McKesson and $1.75 billion to CHC shareholders. It also covered transaction costs and about $2.8 billion in existing CHC debt.
The new company has nearly 15,000 employees and could generate more than $150 million in annual synergies by the second year following the close of the deal, McKesson said at the time of the announcement. The move signaled a decision by McKesson to step back from health IT and focus its resources on its growing drug distribution business.
With a suite of end-to-end payment and claims solutions, as well as clinical capabilities, the company could be positioned to compete in areas like workflow, healthcare analytics and patient engagement. Those things are important as the healthcare industry shifts to value-based care and more patient-centric models of care delivery.
Neil de Crescenzo, CEO of Change Healthcare, said in a statement that the new company will leverage its data, analytics and ideas to improve healthcare efficiencies and patient outcomes.