Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 1 COMPETITORS ANALYSIS SEGMENTS INTRODUCTION This document analyzes the POMIS competitors’ environment of information technology solutions (ITS) vendor. The chapter focuses on administrative, financial, and clinical systems vendors, defined as: Inhouse Systems Vendors, Medical Billing Services Vendors, and Software as a Service Providers. At the end of 2009, The POMIS Report analyzed the performance of 591 vendors. The POMIS Report had revenues of $200,000 or more and an active business. These vendors include: traditional practice management system and EHR-EMR systems, as well as managed care information systems vendors in ambulatory care settings. Vendors of individual clinical software components are not included as a POMIS vendor in the analysis. A vendor is permitted to describe its EHR-EMR system as such. The total revenues consists of the sum of all 591 vendor estimated revenues. Some vendors offer hospital information systems (HIS) that were not included in the revenue analysis of this report. The primary format of competitive intelligence in this chapter is specific data and information rather than text. If any of our clients want to expand on information in this chapter, we would be happy to talking about it in length. Overall analysis of data/information in the 2010 Edition The POMIS Report indicates that a systemic change is occurring in the physician’s office management and medical information systems (POMIS) competitive environment for 2014. Information technology solutions will be benchmarked by certification based on integration, interoperability, and affordability. Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 2 LEADING MEDICAL GROUP PRACTICE VENDORS EXHIBIT CAS-2. LEADING GROUP PRACTICES VENDOR – 2009 Leading Ten Group Practice Vendors' Market Share - 2009; $8,510.5 Million McKesson, $427.4 Allscripts, $420.8 GE Heallthcare, $277.0 Sage, $265.0 Epic, $232.2 HealthPort™, $223.3 NextGen, $209.1 Athenahealth™, $171.5 MED3000, $152.8 Other Vendors, $5,999.9 CBIZ-MMP, $131.5 (Revenue Analysis - 2010, Chart 12) McKesson = McKesson Provider Technologies Allscripts = Allscripts, Inc. GE Healthcare = GE Healthcare ITS Sage = Sage Software Healthcare Division Epic = Epic Systems Corporation HealthPort = HealthPort, Inc. NextGen = NextGen Healthcare Information Systems, Inc. MED3000 = MED3000, Inc. Athenahealth = athenahealth, Inc. CBIZ-MMP = CBIZ MEDICAL MANAGEMENT PROFESSIONALS, INC. (MMP) Source: Jewson Enterprises™’ POMIS Knowledge Base 2 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 3 EXHIBIT EI-3. SELECTED VENDOR GROUPINGS MARKET SHARE – 2009 Vendor Market Share Groups POMIS Revenue Industry ($Millions) Penetration Top 10 Vendors $4,117.0 46.1% Top 25 Vendors $6,158.1 68.9% Top 50 Vendors $7,064.6 79.0% Top 75 Vendors $7,520.8 84.1% Top 100 Vendors $7,814.3 87.4% Top 200 Vendors $8,303.9 92.9% Top 300 Vendors $8,553.6 95.7% Top 400 Vendors $8,735.1 97.7% All 591 Vendors $8,939.0 100.0% (Revenue Analysis – 2010: Sheet Vendor Overview) Source: Jewson Enterprises’ POMIS Knowledge Base 3 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 4 Source: Jewson Enterprises™’ POMIS Knowledge Base EXHIBIT IA-3. TOTAL NUMBER OF ALL GROUP PRACTICES WITHOUT REMOTE SITES BY CONSOLIDATING MARKET SEGMENTS – 2008 HROUGH 2014 All Medical Group Practices Total Group Practices in Appropriate Segments 2008 2009 2010 2012 2014` 2009-2014 CAGR (%) 44,543 45,061 45,586 46,711 47,894 1.2% 34,261 34,879 35,510 36,803 38,129 1.8% Hospital-Based Practices 8,690 8,653 8,618 8,549 8,483 -0.4% Academic Medical Centers 1,592 1,528 1,458 1,358 1,282 -3.5% Medical Group Practices (Physician-Practice Totals-2010, Segmentations) Source: Jewson Enterprises™’ POMIS Knowledge Base 4 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 5 EXHIBIT PPD-2. SOLO AND 2-PHYSICIANS PRACTICES BY SPECIALTIES – 2008 THROUGH 2014 Selected Solo & 2-Physicians Specialties 2008 Total Solo & 2-Physicians Practices 2009 2010 2012 2014 2009-2014 CAGR (%) -0.3% 160,306 160,350 160,041 157,576 157,953 General/Family Practice 23,250 23,801 24,252 25,184 26,100 Internal Medicine 28,888 29,638 30,287 31,627 33,026 Obstetrics/Gynecology 10,316 10,583 10,704 10,949 11,200 Pediatrics 14,646 15,199 15,380 15,748 16,125 Primary Care 77,100 79,221 80,623 83,508 86,451 Anesthesiology 9,534 9,712 9,791 9,949 10,111 Cardiovascular Disease 6,045 6,137 6,189 6,293 6,400 0.8% Emergency Medicine 5,718 6,037 6,091 6,199 6,310 0.9% General Surgery 8,409 8,511 8,598 8,776 8,957 Ophthalmology 5,313 5,375 5,413 5,489 5,566 0.7% Orthopedic Surgery 5,325 5,432 5,481 5,581 5,682 0.9% Radiology/Radiation/Diagnostic 8,680 8,893 8,933 9,015 9,097 Urological Surgery 2,849 2,910 2,946 3,021 3,097 Other Specialties 31,333 28,122 25,976 19,745 16,282 -10.4% Total Non-Primary Care 83,206 81,129 79,418 74,068 71,502 -2.5% 1.9% 2.2% 1.1% 1.2% 1.8% 0.8% 1.0% 0.5% 1.3% (Physician-Practice Totals-2010: Solo-2 Specialties) CAGR = Compound Annual Growth Rate in percent; Figures have been rounded for convenience. * Includes diagnostic and therapeutic, as well as radiation oncology Source: Jewson Enterprises™’ POMIS Knowledge Base and state and local medical associations/societies 5 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 6 Exhibit T-1: Overview of the U.S. Health Care Industry – 2009 to 2015 GDP and NHE Comparison Billions of Dollars Percent of GDP $25,000.0 18.4% 18.2% $20,000.0 18.0% 17.8% $15,000.0 17.6% 17.4% $10,000.0 17.2% 17.0% $5,000.0 16.8% $0.0 2009 2010 2011 2012 2013 2014 2015 GDP $14,282.5 $14,853.8 $15,611.4 $16,563.7 $17,524.4 $18,488.2 $19,431.1 NHE $2,473.3 $2,600.2 $2,709.8 $2,851.6 $3,024.8 $3,302.4 $3,538.2 17.3% 17.5% 17.4% 17.2% 17.3% 17.9% 18.2% NHE Percent 16.6% Years Source: Jewson Enterprises™ POMIS Knowledge Base extracted from CMS, Office of the Actuary. See http://www.cms.gov/NationalHealthExpendData/03_NationalHealthAccountsProjected.asp#TopOfPage 6 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 7 Vendor ID VEN2390 Company Name McKesson Provider Technologies Parent Name MCKESSON CORPORATION Address1 5995 Windward Parkway Address2 City Alpharetta State GA Postal Code 30005 Country USA Year Started 1980 Ownership Publicly held Offices 12 Phone 404-338-6000 Toolfree 800-981-8601 FAX 404-338-5108 Website http://www.mckesson.com/en_us/McKesson.com/ E-mail http://infosolutions.mckesson.com Vendor Perspective McKesson provides services and products to health care providers and payors.From pharmaceuticals and medical supplies to sophisticated medical hospital workflow solutions, our offerings help customers reduce costs, streamline processes and, most importantly, improve patient care and medication safety. McKesson Provider Technologies relative to the POMIS industry offers a broadest products and services portfolio. The area that The POMIS Report investigates consists of ambulatory care EHR, PMS, RIS, EDIS, Physician Portal, Home health, and RCM. Their EDI processing business is excluded. During 2010, McKesson added U.S. Oncology to the family. This provides the company a leadership in the Oncology Information systems market. The unified company will deliver a best-in-class oncology program, clinical tools, guidelines and care pathways that will create a leader in evidence-based medicine backed by a deep team of clinical experts. With approximately 3,000 total physician customers, the new organization's expanded breadth will accelerate investments in integrated systems, process excellence, and clinical programs that will help drive productivity, efficient care delivery, and the best possible care experience for patients. McKesson Technology Solutions provides software, automation, services and consulting to hospitals, physician offices, imaging centers, home health care agencies and payors. We also provide interactive connectivity services that streamline clinical, financial and administrative communication between patients, providers, payors, pharmacies and financial institutions. Our solutions are designed to improve patient safety, reduce the cost and variability of care, improve health care efficiency and better manage revenue streams and resources. McKesson Automation McKesson Health Solutions McKesson Provider Technologies RelayHealth McKesson Provider Technologies automates health care delivery processes with a wide variety of clinical, financial and administrative software applications. Access management, revenue cycle and resource management solutions help organizations increase cash flow, maximize use of resources, and standardize, measure and monitor key performance indicators. Clinical solutions help to improve quality, safety and efficiency with point-of-care documentation, order management, clinical decision support, diagnostic imaging and secure access to the complete electronic health record, including data, documents and medical images. Automation solutions support hospitals' unique dispensing, inventory management and medication administration initiatives. Physician practice management solutions include software, revenue cycle outsourcing, connectivity services, and electronic health records (EHR) software for physicians of every size, specialty or geographic location. As a large Fortune-500 corporation with more than $100 billion in revenue, it serves more than 200,000 physicians, 750 home care agencies, and 600 payers. 7 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 8 Estimated POMIS Revenues: $651.0 (Millions of Dollars) Financial Stability: Financially stable and receiving funding from numerous sources and has a sustainable business model to compete in the future. Products Offered: Clinical and EHR Solutions McKesson empowers physicians with clinical solutions to help provide better, more efficient, care for patients. Practice Partner Patient Records Empower patients and staff with online clinical resources Implement EMRs for all patients Improve ease of patient care with in-office lab solutions Accelerate patient treatment with ePrescribing solutions ● Horizon Ambulatory Care Improve continuity of care with full integration to Horizon Clinicals® Increase efficiency with template-driven documentation Enhance patient safety and convenience with ePrescribing ● Specialty Distribution Receive specialty and oncology drugs through direct-to-provider wholesale distribution ● Medical-surgical supplies Order, use, and re-order medical-surgical supplies and equipment easily McKesson Revenue Management Solutions Increase cash flow, reduce accounts receivable days, and explore solutions that can help you fund future IT initiatives ● Management Solutions McKesson technology empowers practices to automate the processes that have typically required hours of administrative time, helping staff do more in less time. ● McKesson Supply Manager Manage supply inventory online in real-time ● McKesson Practice Complete™ Process claims more efficiently and accurately Speed reimbursements Streamline practice management and identify areas to reduce costs ● Lynx® Comply with government and insurance reporting demands Maintain electronic patient records Simplify ordering process for specialty pharmaceuticals Through web-based technology, not software, physicians are empowered to practice medicine and manage their practice— anytime, anywhere. ● RelayHealth webVisit® Monitor non-urgent issues conveniently and inexpensively, and promote patient adherence through personalized instructions Generate income through online patient visits Free up phone lines and reduce fax activity by shifting administrative tasks online Protect and access patient records ● RelayHealth Secure Colleague Messaging and e-Referrals Share knowledge and solve patient issues with colleagues Streamline approval, fulfillment, and billing for prescriptions Realize efficiency gains in lab results, appointment requests, and referrals ● HorizonWP® Physician Portal Access vital patient information securely—anytime, from any computer. Home Care McKesson homecare documentation tools and technology give you the power to succeed in a challenging environment—and bring the best healthcare home. Research and Development: Competitive R&D budget Scalability: Practice partner scalable from solo through about 20-physicians and the Horizon series thereafter. 8 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 9 t Success Assessment Market Shares: Based on high-growth market segments. These segments include health systems, physician offices and other ambulatory settings, medical imaging, automation, and consumer technologies. The new structure is designed to leverage McKesson's leadership position as an innovator in healthcare technology and workflow automation and accelerate the introduction of new products into strategic market segments. Extent of Brand Recognition: Very strong brand recognition among physicians Geographical Coverage: National Offices: GA, CO, NC, TX, IA, OR, FL, MN, PA, NJ, MO, IL Includes all states plus some international countries. Distribution Channels and Well-managed list of partnerships. Alliances: Inhouse Configuration: Yes Software as a Service (SaaS or ASP): Yes Medical Billing Services: Yes EHR System: Yes Managed Care Information System: No PMS: Yes Certified EHR System: Yes Hybrid Configuration: Revenue Cycle: Yes Direct Sales: Yes Value-Added Reseller (VAR): Yes Number of Customers 89,150 Number of Physicians 148,000 Number of Employees: 14000 Personnel Assessment: Contact Executive: David Henriksen Contact Title: Senior VP of McKesson Physician Practice Solutions Group Other Key Executives: John H. Hammergren, Chairman, President and Chief Executive Officer; Jim Pesce, president, McKesson Provider Technologies Completeness of Vision: McKesson's Mission Advancing the health of the health care system by advancing the success of our partners McKesson's Vision To bring together clinical knowledge, process expertise, technology and the resources of a Fortune 14 company to fundamentally change the cost and quality of available health care services Organizational Structure: Based on high-growth market segments. These segments include health systems, physician offices and other ambulatory settings, medical imaging, automation, and consumer technologies. The new structure is designed to leverage McKesson's leadership position as an innovator in healthcare technology and workflow automation and accelerate the introduction of new products into strategic market segments. Growth Plans: Excellent growth plans based on market share advantage that provides some economies of scale. Market Strategy: Support physician alignment and coordinated care. 9 Copyright 2010 Jewson Enterprises™ Base Year 2009 - Competitors Analysis Segments CAS - 10 Activity Total POMIS Physicians (MDs) AMA 2009 JE 2010 850,232 859,279 749,566 758,431 Office-based Practice 560,381 563,967 Hospital-based Practice Other POMIS Professional Activity 189,185 194,464 43,239 43,158 Administration 14,207 14,300 Medical Teaching 10,241 10,200 57,427 57,690 Patient Care Not Classified 10