McKesson Corp. will stop development of its Horizon Enterprise Revenue Management product and invest $1 billion over the next two years in research and develop of its other products. Some of that money will go toward enhancing its Paragon clinical/financial hospital information system to be the "go-forward" product for hospitals of all sizes.

The investment in Paragon will be "dramatic," according to a McKesson spokesperson, as the company is shifting its strategy to build advanced applications to be delivered on the Paragon platform. Paragon customers typically are hospitals with fewer than 300 beds, though several larger facilities are using the product.

McKesson will move its handful of Horizon Enterprise Revenue Management customers to its Star, HealthQuest or Series revenue cycle products, and continue to make investments in the applications.

The future of McKesson hospital applications as it moves to make Paragon its "go-forward" product is unclear, but the company sees significant growth and demand for its analytics, performance management and other products that enable financial and operational improvements. The company says it is fully committed to supporting the needs of Horizon Clinicals customers as they prepare for meaningful use, ICD-10 and health care reform initiatives. Asked about the future of the legacy systems, the spokesperson says the strategy is still being developed, but adds, "There's nothing that's been said about stopping sales of Star, HealthQuest, Series and Horizon Clinicals."

But the strategy going forward is to have a fully integrated clinical/financial/administrative hospital information system, with ambulatory and emergency department capabilties, for any size facility or delivery system on the Paragon platform.

The new strategy behind the $1 billion I.T. investment is Better Health 2020, which covers all of McKesson's technology businesses, including McKesson Provider Technologies. The investment for hospitals and delivery systems will focus four areas, according to a McKesson e-mail to Health Data Management:

* Improving patient safety and delivering better clinical and financial outcomes through fully integrated core clinical and revenue cycle IT systems with a highly competitive total cost of ownership;

* Cost reduction in customer operations through best-of-class pharmacy automation, supply chain, analytics and performance management solutions;

* Better care coordination through connectivity across the ecosystem of diverse stakeholders and IT systems; and

* Managing increasing complexity and risk, bundled payments and changing structural relationships through superior payment solutions.

The company adds: "The convergence of our core clinical and revenue cycle health I.T. solutions for the Horizon and Paragon product lines onto Paragon's contemporary Microsoft platform addresses the first of these four factors. It will enable us to expand on Paragon's integrated architecture, low total cost of ownership and proven execution by leveraging the Horizon team's deep clinical expertise. Today, the vast majority of McKesson's solutions operate on Microsoft architecture, and this percentage will increase in the future."

Asked about the future of the Practice Partners ambulatory suite of software, the spokesperson said it is still actively marketed and will not be going away.


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