McKesson Corp has reportedly been conducting talks regarding a merger of its health information technology unit with Change Healthcare Inc., sources familiar with the company told Reuters.
According to three sources, a merger with Change Healthcare would result in a market-dominating health IT company worth nearly $10 billion including debt.
Such reports confirm what was speculated earlier this month in a Wall Street Journal article, which stated that McKesson may be considering the idea of selling their IT unit, Technology Solutions. McKesson would reportedly sell that business unit in an effort to focus on their pharmaceutical business.
The WSJ report also indicated that McKesson may turn to a merger for Technology Solutions, just as Reuters suggests.
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McKesson has been working to pare down its health IT units since March of this year after selling several of its EHR technologies to e-MDs. According to Reuters, the company also sold its care management unit to Comvest Partners.
“The McKesson team supporting these products is passionate about the same thing we are helping doctors maintain focus on the patient,” e-MDs CEO Derek Pickell said in a public statement. “All of us at e-MDs look forward to aligning this team with ours to bring e-MDs’ full suite of solutions to thousands of new providers across the country.”
McKesson has also been seeing a waning market share, according to a June Kalorama Information report. The report shows that Cerner Corporation has maintained its spot as the largest EHR vendor by market share, followed by McKesson.
This may signal a shifting market trend that favors mid-sized health IT vendors, rather than those with multiple different products.
“The trend over the past four years has been an increasing amount of revenue going to mid-size EMR specialist companies and away from IT companies and diversified healthcare companies,” Bruce Carlson, Publisher of Kalorama Information, said in a public statement.
Date: June 22, 2016