McKesson Provider TechnologiesBusiness Update

Pamela PurePresidentMcKesson Provider Technologies

Pamela PurePresidentMcKesson Provider Technologies

9/29/2006 2

Leadership

112,000 users log on to the Physician Portal 3.4 million times per month

112,000 users 112,000 users log on to the Physician Portal log on to the Physician Portal 3.4 million3.4 million times per monthtimes per month

9/29/2006 3

1,500,000 clinicians rely on automated clinical documentation1,500,000 clinicians1,500,000 clinicians rely on rely on

automated clinical documentationautomated clinical documentation

Leadership

9/29/2006 4

114,000 physicians view and sign medical records in the document

imaging system every day

114,000 physicians114,000 physicians view and sign view and sign medical records in the document medical records in the document

imaging system every dayimaging system every day

Leadership

9/29/2006 5

300 million exams are stored in the medical imaging system

300 million exams300 million exams are are stored in the medical imaging systemstored in the medical imaging system

Leadership

9/29/2006 6

McKesson bar-code scanning systems issue

650,000 warnings each week

McKesson barMcKesson bar--code scanning code scanning systems issuesystems issue

650,000 warnings650,000 warnings each weekeach week

Leadership

9/29/2006 7

Last year, McKesson processed274 million claims worth

$148 billion

Last year, McKesson processedLast year, McKesson processed274 million claims274 million claims worthworth

$148 billion$148 billion

Leadership

9/29/2006 8

Business updateBusiness update

Preparing for the future –The role of ITPreparing for the future –The role of IT

Who will take the lead?Who will take the lead?

9/29/2006 9

Employee Satisfaction “World Class”Competitive positionCustomer focusTeamworkTraining

Employee Satisfaction Employee Satisfaction ““World ClassWorld Class””Competitive positionCompetitive positionCustomer focusCustomer focusTeamworkTeamworkTrainingTraining

9/29/2006 10

Customer Satisfaction is SolidCustomer survey results at 5.72Support satisfaction at 96%Customer loyalty index at 84%

Customer Satisfaction is SolidCustomer survey results at 5.72Support satisfaction at 96%Customer loyalty index at 84%

9/29/2006 11

Customer Loyalty IndexCustomer Loyalty Index

FY03

FY04

FY05

83%

80%Cases per FTE/Mo. Cases per FTE/Mo.

FY03

FY04

FY05

96%

94%

98%

Satisfaction with SupportSatisfaction with Support

Customer View Productivity

FY03 FY04 FY05

0

39.7

42.3

47.185%

65

FY06

84% FY06

96% FY06

Customer Satisfaction:World-Class Support

9/29/2006 12

Accountability:Implementation Success

Behind the trends…– All project managers are PMP-certified– Technical employee certifications are 50% complete– Product-level certification under way

4

4.5

5

5.5

6

6.5

Q2'06 Q3'06 Q4'06 Q1'07

Svcs OverallPost Impl

Customer Sat (SatMetrix)

432 405

568672

0

100

200

300

400

500

600

700

800

2004 2005 2006 2007

Horizon Clinicals Go-Lives

9/29/2006 13

Accountability:Accelerated Time to Value

1 2 3 4 5 6 7 188 9 10 11 12 13 14 15 16 17

Traditional Pharmacy AutomationPharmacy Automation

Packaging/Bar codingPackaging/Bar coding

Medication Admin at BedsideMedication Admin at Bedside

Solution Suite Medication Safety Suite

The Model

Concurrent/Stacked implementations

Pre-staged hardware and application with shrink-wrapped clinical content

Linux

Results

30-50% faster time to value

30-50% lower implementation costs

20-40% lower hardware costs

9/29/2006 14

Cerner Meditech Eclypsis Siemens

Acute Care CDR, Orders & ChartingPACS * -- --

Cardiology Reporting -- -- --

Emergency Department Systems -- --

Document Management & Imaging

-- *

Surgery Management -- --

Financial/ERP -- * -- --

Acute Care Registration, Scheduling & Patient Acctg *Community HIS -- --

McKessonMcKesson

Top 20: KLAS Mid-Year Report Card, June 2006©2006 KLAS Enterprises, LLC. www.healthcomputing.com

©All rights reserved

= KLAS Ranked= KLAS score lower than McKesson

= Not KLAS Ranked -- = No Product*

KLAS Top 20: Mid-Year Report Card

9/29/2006 15

KLAS Clinical Market Share Report: Raw Hospital Count (200+ beds) New CIS Contracts by Year per Vendor – Additive 2002 – 2006 June ‘06

0

20

40

60

80

100

120

2002 2003 2004 2005 2006

Cerner Millennium Eclipsys SCM EpicCareGE Centricity IDX Carecast McKesson HCDMeditech C/S Misys CPR QuadraMed AffinitySiemens Soarian

Num

ber o

f Con

trac

ts

McKesson

CernerEpic

EclipsysSiemens

GE/IDXMeditech

QuadraMed

Misys GE Cent.

Clinical Market Share Report, KLAS, June 2006 www.healthcomputing.com © 2006 KLAS Enterprises, LLC. All rights reserved

9/29/2006 16

MPT Well Positioned In Core Markets

Market share*Percent Market Share

Position

5-7%

17%

18%

20%

22%

AmbulatoryEMR

Automation

MedicalImaging

RevenueCycle

Clinicals

Trajectory

Improving

#2

#1/2

#1

#1/2

9/29/2006 17

Poised To Capitalize On Revenue Cycle Replacements

12%

15%

21%

21%

32%

38%

0% 10% 20% 30% 40%

IDX

Cerner

EPIC

Meditech

Siemens

McKesson

100%

50%

0%

Cerner Eclipsys McKesson

Avoidance Rate within Existing Customer Base

KLAS Survey Question for Vendors’Installed Base:“Which vendors to avoid if looking for new revenue cycle solution?”

Vendors To Look At FirstPercent

Source: Revenue Cycle Management – Software, March 2006, www.healthcomputing.com, © 2006 KLAS Enterprises, LLC. All rights reserved

9/29/2006 18

Preparing for the future –The role of ITPreparing for the future –The role of IT

9/29/2006 19

Reduced visits

Improved outcomes

Fewer re-hospitalizations

Lower per-episode costs

Increased referrals

Improved morale/staff retention

Higher patient satisfaction

Telehealth - Return on Investment

26%38%

52%

22%17%

21%

35%

Source: Success in Home Care, July/August 2006

Where Is Healthcare Going?

9/29/2006 20

=

Phone graphic is a created representation

Where Is Healthcare Going?

9/29/2006 21

50,000 health savings accountsare opened each month

50,00050,000 health savings accountshealth savings accountsare opened each monthare opened each month

Where Is Healthcare Going?

20% of accounts receivable will be self-pay

20%20% of accounts receivable of accounts receivable will be selfwill be self--paypay

10% discount if you exercise and don’t smoke10%10% discount if you exercise and dondiscount if you exercise and don’’t smoket smoke

9/29/2006 22

What is the Role of Healthcare IT?

“The Basics”– safe, efficient care in the hospital1

Drive physician connectivity2

Engage consumers in managing their own health3

Manage business of healthcare4

9/29/2006 23

The Basics - Safe, Efficient Care in the Hospital

Automated physician order entry and clinical decision support

Bar-code scanning at the bedside

Medical imaging tools for advanced diagnostics

Clinical analytics for quality reporting

1

9/29/2006 24

Bar-Code Scanning for Safe Care

“From the bedside back”“From the bedside back”

Unit-dose deliveryUnit-dose delivery

BedsideBedsidePharmacy verificationPharmacy verification

InventoryInventory

9/29/2006 25

50

60

70

80

90

100

Jan Feb Mar Apr May Jun Jul Aug

Bar

codi

ng C

ompl

ianc

e %

Scorecard

Daily presentation of scorecard results

Clinical Analytics – Linking IT and Quality

25%25%improvementimprovement

Workflow RemindersWorkflow Reminders

9/29/2006 26

Drive Physician Connectivity2

Connect the PhysicianCommunity

Connect the PhysicianCommunity

StrategicPhysicians

HospitalsHospitals

AffiliatedPhysicians

Physician-physician messagingAdministrative communicationClinical communication

9/29/2006 27

Full EHRFull EHR

E-PrescribingE-Prescribing

2

Connect the PhysicianCommunity

Connect the PhysicianCommunity

StrategicPhysicians

HospitalsHospitals

AffiliatedPhysicians

Drive Physician Connectivity

StrategicPhysicians

9/29/2006 28

– 75% of MDs plan to implement EHRs, 91% will do so within 3 years

– 71% are receptive to leveraging hospital IT resources and buying power to deploy the hospital’s ambulatory EHR in their practice

2 Drive Physician ConnectivityHarris Interactive Survey, June 2006

16%16%

13%13%

71%71%

16%16%

13%13%

71%71%

16%16%

12%12%

72%72%

Receptive (Top 3)Receptive (Top 3)

ModerateModerate

Unreceptive (Bottom 3)Unreceptive (Bottom 3)

100%

Total PCPs SpecialistsTotal PCPs Specialists

9/29/2006 29

Engage Consumers in Managing Their Own Health: The Patient Experience

CollaborationCollaborationPhysiciansPhysiciansCare managersCare managersPatientsPatients

Secure exchangeSecure exchangeOnline care Online care coordinationcoordination

Request Request appointmentsappointmentsPay billsPay billsCheck eligibilityCheck eligibility

WebVisitWebVisit®® --between patients between patients and providersand providersResultsResultsPharmacy refillsPharmacy refills

Chronic care supportChronic care supportInIn--home monitoring home monitoring servicesservices

3

9/29/2006 30

Consumer PayorFinancial Institution

Manage the Business of Healthcare4

9/29/2006 31

Healthcare Leadership Strategy

PayorPayor

PatientPatientHospitalHospital

PhysiciansPhysiciansPhysiciansConnected Community

Financial InstitutionFinancial Institution PharmacyPharmacy