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McKesson’s CMO on Transitioning to Value

September 14, 2016
by Rajiv Leventhal
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Michael Blackman, M.D., the chief medical officer of McKesson Enterprise Information Solutions, discusses how industry stakeholders can best transition to the new healthcare

A survey earlier this year from physician staffing firm Merritt Hawkins & Associates found that roughly one-third of responding physicians were offered a production bonus based entirely or in part on “value-based” metrics last year compared to 23 percent the prior year. Meanwhile, according to a Forbes analysis of the report, just 6 percent of total compensation is now tied to “quality or value-based metrics,” compared to less than 5 percent in 2015. “We are moving in the direction of value-based compensation, but the reality just doesn’t match that aspiration yet,” said Travis Singleton, Merritt Hawkins senior vice president, said in an interview with Forbes.

The “aspiration” Singleton likely is referring to the goal set forth by the U.S. Department of Health and Human Services (HHS) last year when the agency announced a plan to tie 30 percent of traditional fee-for-service (FFS), Medicare payments to quality or value through alternative payment models such as accountable care organizations (ACOs) and bundled payments by 2016, and tie 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.

As such, the bar has been set by the federal government, who continues to look to curb rising costs and focus on quality. Key to much of this movement is the role health IT vendors play in being able to position providers for this rapid change. To this end, one of the most prominent health IT vendor players, McKesson, recently announced a joint venture with Nashville-based Change Healthcare, a provider of software and analytics, which will combine “substantially all of Change Healthcare’s business” and “the majority of McKesson Technology Solutions businesses” into a new company, according to a statement from both vendors.

As Healthcare Informatics reported on the merger, “The deal to merge McKesson's IT unit into a new company with Change Healthcare apparently does not include its Enterprise Information Solutions (EIS) business, a division of McKesson that provides core hospital information systems such as Paragon. This was a particularly noteworthy move as industry watchers have been speculating that McKesson might sell its acute care IT business since the company sold its ambulatory electronic health record (EHR) assets to e-MDs back in March. Following the series of moves, a Fortune report citied Morningstar analysts as noting about McKesson, “Management has not made any material investments within this business over the past several years, and to our understanding, the technology was two to three generations behind other major HCIT players.”

To discuss this, and much more about the biggest challenges and trends healthcare stakeholders are experiencing in their transition to value-based care, Healthcare Informatics recently interviewed Michael Blackman, M.D., chief medical officer of McKesson Enterprise Information Solutions, and formerly CMIO of Pittsfield, Mass.-based Berkshire Healthcare Systems. Below are excerpts of that discussion.

What are your main areas of focus these days at McKesson?

I spend most of my time on [figuring out] what we need to do to improve the strategy and direction for the clinical use of the core EHR and everything that surrounds that. And a big part of that is setting all this up in a way that enables the transition to value-based care. This probably sounds pie-in-the-sky, but the idea is to make the EHR a tool that clinicians want to use, or at least see value in using, as opposed to the general “I am forced to use it” that you hear. Doctors often roll their eyes about EHRs, and the general view of EHRs is that they are like cable companies in that “I have to have one but no one really likes any of them.” We really want to change that perception.

Michael Blackman, M.D.

How can you change that perception?

The biggest piece is to make sure that providers are educated and getting people on the same page, and understanding that the landscape is changing and that it needs to be a team effort going forward. The “good old days” in which a physician was solely in charge and you had a single person taking care of a patient is not the case anymore and hasn’t been for quite some time. It’s about enabling the system to truly support team care where you have a variety of people on the team taking care of the patient.