Why McKesson might sell its health Information Technology business

As reports surfaced previous week about McKesson considering the possible sale of its technology solutions unit, industry observers recommend that few factors may be aligning for the healthcare giant to reassess its stake in the healthcare information technology business.

To a degree, such assessments are a proposed part of the general course of business for industries in today’s economical world, claims John Osberg, managing partner at Informed Partners, a consulting firm that gives strategic business development services for healthcare industries. It is usual for huge companies to consider their portfolios and make strategic decisions, he emphasizes.

Few reports have recommended that McKesson may think about a sale now due to the present investment requirements needed to remain competitive in healthcare IT. Osberg, a mergers and acquisitions consultant, stated that he considers that McKesson for various years has not adequately funded research and development by the unit and may be recognizing that it would have to increase R&D considerably to sustain competitive.

“It has been a ignored asset to certain degree for a while now, and that compounds things,” he asserts. He likens the situation to Siemens Healthcare selling its products in the time of early 2015 to Cerner because upgrading would charge too much.

McKesson isn’t commenting on its policies or reacting to comments from industry insiders; a spokesman late Friday stated that the company doesn’t comment on rumors and speculation.

Initially this year, McKesson agreed to sell its small physician practice EHR and practice management systems to e-MDs, appreciating the purchaser could better service the clients. The acquired software involved the Practice Choice, Medisoft, Medisoft Clinical, Lytec and Practice Partner product lines.

In the time of accountable care and value-based compensation, vendors are under the gun to empower investments and come out with latest product features. In specific, McKesson’s competitors, like Epic and Cerner, have been investing hundreds of millions of dollars into their products, claims the Ken Kleinberg, managing director of the research and insights at the institute of Advisory Board Company, a consultancy.