McKesson 2008 Annual Report Download - page 6

and practice management software, to outsourced billing and
collections services.
A portion of the assets we acquired from Per-Se helped us
form RelayHealth, McKesson’s “connectivity” business, which
provides powerful capabilities to each one of our customer
segments. In the physician segment, RelayHealth facilitates
ePrescribing and online patient-doctor consultations known
as webVisits®, innovations that provide cost and effi ciency
benefi ts to physicians and improve patient care.
Strengthening our position in the fast-growing specialty
pharmaceutical market, the OTN acquisition expanded our
physician customer base by almost 6,000 oncologists, rheu-
matologists and other providers. We also gained OTN’s
state-of-the-art Lynx® technology platform that automates
practice management for oncologists and other physicians.
Helping payors provide their members
with the best, most cost-effective care
In our payor business, we offer a range of services to the public
and private sectors that help manage the cost and quality
of care. We are the largest provider of disease management
programs to state Medicaid agencies, helping millions of people
with chronic diseases lead longer, healthier lives. In the private
sector, we provide clinical decision support tools to health plans,
employers and large medical groups that help create better
health outcomes for their members.
We renewed all expiring disease management contracts in fi scal
year 2008, a strong validation of the value we deliver to both
payors and patients. For example, working with the Illinois
Department of Healthcare and Family Services, we helped
the state of Illinois achieve nearly $34 million in net savings in
one year.
On the software side of our payor business, the contracts we
signed with Aetna and CIGNA were the two largest in the
history of that business. Altogether we serve more than 85% of
payors and continue to sell these customers new products and
services that strengthen the relationships we have with them.
Hospitals also use these products. Last year, 300 hospitals
signed contracts to use InterQual® Criteria, our suite of industry-
leading clinical decision support tools. This represents a 40%
increase over the previous year.
Executing our strategy for stockholder
value creation
Our strong operating performance has produced signifi cant
cash fl ow from operations, strengthening our balance sheet
and enabling us to pursue a more aggressive strategy for
stockholder value creation. Taking a portfolio approach to
capital deployment over the past three years, we have spent
$8 billion to reshape the organization in a manner that is
consistent with our evolving strategy.
From fi scal year 2006 through 2008, we completed a total of
$3.1 billion in strategic acquisitions. Many of these were smaller
acquisitions that enhanced our value proposition to customers
in both distribution and information technology. Our larger
acquisitions, including D&K, OTN and Per-Se, created opportu-
nities for us to broaden our portfolio of innovative solutions and
deliver them to an expanded customer base.
Recently, we announced two new acquisitions that advance
our long-term strategy. In May, we acquired McQueary
Brothers Drug Company, a regional distributor to more than
400 independent and regional chain pharmacies in the
Midwest. This acquisition expands McKesson’s distribution
footprint in the independent pharmacy segment and provides
fertile, new ground for growing the Health Mart franchise and
expanding the McKesson OneStop Generics program. And in
Technology Solutions, we acquired Rosebud Solutions (Rosebud),
a provider of software to track and manage instruments, endo-
scopes, tissue implants and other hospital assets. Rosebud’s
“As we move into fi scal year 2009 and beyond, McKesson has never been
stronger or more capable.”