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Biotech / Medical : McKesson HBOC (MCK)
MCK 591.07+1.1%Jun 13 4:00 PM EDT

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To: Rob Pierce who started this subject1/11/2001 8:14:12 AM
From: Paul Lee   of 165
 
TWST: Could you give our readers an overview of
iMcKesson (NYSE:MCK)?

Mr. Mahoney: iMcKesson is a six-month-old subsidiary
of McKesson HBOC Inc. that provides a combination of
both Web and legacy IT solutions for physician offices
and medical management tools a nd services for payors.
iMcKesson has leading positions in a number of market
segments within the payor and provider markets. We are
the leading provider of clinical appropriateness criteria.
We are the leader in decision support and clinical
resource management software. We are the leader in
outsourced phone-based care center telephone support
in medical management, and iMcKesson has the
industry’s second largest medical claims clearinghouse,
which processes more than 100 million medical claims
per year. Everything we do starts from a rigorous clinical
base with a focus on patient outcomes.

TWST: Do you have an international presence?

Mr. Mahoney: We have a large presence in the US with a presence in Canada,
the UK, Australia and New Zealand. So, for example, in Australia and New
Zealand, we provide medical management services for 8 million people.

TWST: What do you see as your most distinct competitive advantages?

Mr. Mahoney: A couple of things. First, and probably most important, is the
breadth of our offering. There are very few e-health companies that can address
as broad a range of needs that our customers have as well as we can. Second is
the broad scale of our customer base, and importantly, the scale of our installed
customers is unique. Third is our domain expertise. We are talented technologists
who really know health care. We are not trying to learn health care from a
technology base. We are bringing a very deep knowledge of health care to focus
on the problems our technology can solve today. Lastly, I would highlight that we
have a very strong clinical focus that comes from that healthcare expertise with
defensible intellectual property that backs up our products.

TWST: Will your strategy for growth also include mergers and
acquisitions?

Mr. Mahoney: Absolutely, because of the strength of our service and product
offering right now, we think that we will have a lot of opportunities to grow by
acquisition.

TWST: What do you see as the potential rate of gain in sales and earnings
for iMcKesson over the next year or so?

Mr. Mahoney: Our goals going forward, without putting a specific number around
them, are to maintain the leadership position that we have established in the core
medical management and claims processing markets. I think it is going to be very
important for us to make that leadership position more visible to both the customer
markets and to the capital markets. In addition, we will leverage the Internet to
expand upon our core triage medical management services capabilities, as well
as the opportunity created by HIPAA to increase the volume of medical claims
processed through our Transaction Solutions Hub. Additionally, we will be focused
on establishing PracticePoint Connect as the premier tool for Web-based
provider-patient communications.

CEO is concerned about the health of iMckesson's customer base
David Mahoney, iMcKesson
DAVID MAHONEY is the Chief Executive Officer of iMcKesson, business unit of McKesson HBOC, Inc.


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TWST: Where will most of your potential revenue growth come from in the year?

Mr. Mahoney: About two-thirds of our current revenue comes from sales of our medical management solutions, and one-third from the physician office market. We are accelerating our growth in these segments, leveraging our re-focused, expanded medical management sales force and on the provider solutions side, our installed base in 20% of the nation’s largest physician practices. We anticipate the fastest growing pieces will be the services part of medical management and the claims clearinghouse part of the physician office solution.

TWST: What do you see as the most significant industry trends that will be taking place in the next year?

Mr. Mahoney: I think a couple of things. First, the increased need for health plans to focus on medical management effectiveness, responding to the trends of high premium rate increases, concerns by both employers and consumers about inappropriate utilization management, and the increasing empowerment of patients all leading, if you are a health plan, to be more focused on medical management effectiveness. The second key trend, and there has been a lot of emphasis on this, is the connectivity strategies between payors and providers, particularly physicians, but also hospitals and patients. This is being driven by regulatory changes, such as HIPAA, and by changes in the basic demographics of the US population, which is leading to more and more older people prone to chronic disease. Finally, of course, there is the trend of increasing utilization of the Web, both for delivering basic information to patients as well as to solve some of these medical management and connectivity issues.

TWST: What do you see as the most significant risks and challenges that iMcKesson (NYSE:MCK) will be facing?

Mr. Mahoney: The healthcare system as a whole is under pressure so that we are always concerned, and I think we need to be concerned going forward, about the health of our customer base. Whether you are talking about reimbursement pressures being put on our provider customer base or the regulatory and other pressures put on our health plan or payor customer base, that’s clearly something we worry about. Additionally, any business today needs to be quite concerned about a continued ability to attract and retain talent in a highly competitive market.

TWST: What are your thoughts and comments on the current stock prices for iMcKesson?

Mr. Mahoney: iMcKesson is a subsidiary of McKesson HBOC, which is traded on the NYSE under the symbol MCK.
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