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Morning Keynote Address: John H. Hammergren,
Chairman, President, CEO, McKesson Corporation
Presentation Title: “Full Potential Healthcare: Prescription for Success in Post-Reform World”
Mr. Hammergren began the presentation introducing his company, McKesson, and its broad footprint in multiple areas of health care. He described McKesson as the largest healthcare services company in the world and noted that it is also the oldest US health care company, dating back to 1833.
He gave a broad assessment of the status quo of the United States healthcare system describing the current state as the “circle of economic plight” marred by the “uninsured, under-insured, and the under-reimbursed.” The system perpetuates a cycle in which there is constant cost shifting from the insurers to the providers to the patients. When the cost becomes too high for the patients, they drop out. This shifts the burden back to insurers and providers.
Mr. Hammergren broke down the system into its major entities: hospitals, physicians, payers, pharmacies, and consumers, describing the challenges facing each category. Physicians are tasked to do too much, dealing with decreasing reimbursements, and accordingly focused on throughput. Pharmacies are facing staffing challenges. Payers are being forced into administrative roles, are not as involved in care process, and are dealing with an increasing complexity of being the gatekeeper. Consumers are becoming more informed and are demanding transparency as they are currently “fumbling through the system.”
His solution to the current system is developing full connection between all aspects of the healthcare value chain primarily through information technology. According to him this connection will allow the system to deliver “full potential health care.” He used the following organizations as examples of industry innovators:
- Vanderbilt implemented computerized physician order entry system and a clinical decision support system, allowing them to get real time decision support as compared to resorting to a post care delivery review. This system allows evidence based medicine to be developed and better structured quality metrics to be implemented. Finally, it will lead to cost savings.
- John Muir implemented a bar coding system which improved efficiencies leading to fewer hospital days. In addition, they implemented an automated prescription process. The combination of these efforts led to cost savings.
- Urology San Antonio implemented a system with coordinated electronic medical records, financial management system, and scheduling system.
- CVS Caremark is an example of how integrated health services leads to better counseling.
- Humana has utilized information technology to implement a progressive Med D system, individual insurance policies, improved consumer education, and clinical forecasting.
- Access Plus uses information technology to help 290,000 Medicare recipients manage chronic care.
He stated that the four pillars of healthcare are access, quality, cost, and innovation. He went on to give a “call to action,” encouraging participants to be at the table, be proactive, and continue to innovate. He said that profit is good for healthcare as it promotes innovation. He emphasized that the industry should focus on consumers, keeping them involved. Finally, he encouraged participants to collaborate and support collaboration across the country.
The Q&A Session
Q: What are your takeaways from your experiences in other systems globally?
A: The biggest issue outside the United States is resource allocation. Countries have environments with too much demand and too little supply, and their legislatures are faced with how to pay to meet the demand; there are no economic/market driven ways to get the resources. Taxpayers feel they are not getting what they deserve as they believe that the government owes them healthcare.
Q: What are the phases and timeline of reform?
A: The first focus will be on the access issue, particularly how to get the uninsured into the system and how to get them out of the ER and into primary care.
Q: What are the biggest challenges at McKesson?
A: The breadth of scope of what McKesson does provides a significant challenge. There are many silos internally and there is a need to connect the different projects and departments. This can be done by embracing more platforms for connectivity.
Q: It appears the healthcare system continues to get more fragmented – specialty clinics, hospice – everything is moving away from the hospital. How do you integrate?
A: This is not necessarily worse for the system; it just makes it harder to navigate for patients. The solution is going to be information technology and virtual connectivity leading the way to personalized health records.
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