2012 north american enterprise imaging informatics growth leadership award

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2012 North American Enterprise Imaging Informatics

Growth Leadership Award

2012

BEST PRACTICES RESEARCH


Growth Leadership Award

Enterprise Imaging Informatics

North America, 2012

Frost & Sullivan’s Global Research Platform

Frost & Sullivan is in its 50th year in business with a global research organization of 1,800

analysts and consultants who monitor more than 300 industries and 250,000 companies.

The company’s research philosophy originates with the CEO’s 360 Degree Perspective™,

which serves as the foundation of its TEAM Research™ methodology. This unique approach

enables us to determine how best-in-class companies worldwide manage growth,

innovation and leadership. Based on the findings of this Best Practices research, Frost &

Sullivan is proud to present the 2012 North American Growth Leadership Award in

Enterprise Imaging Informatics to McKesson Provider Technologies.

Key Industry Challenges

The North American radiology PACS and RIS markets have reached such high levels of

market penetration and maturity, that the historical double-digit revenue growth rates

have given way to a much slower growth pattern. In this context of slow growth, the

financial stability and operational performance of PACS vendors have moved to the

forefront of vendor selection criteria in the mind of customers. In fact, the vendors that

have demonstrated unwavering reliability in their customer support and sustainability in

their business model are being favored by customers in the PACS replacement market.

During the last three years, healthcare IT enterprises and CIOs have been widely

absorbed by the HITECH legislation, dedicating most of their efforts and budgets to

evaluating and implementing EMR-related projects in order to best align their enterprise

with the first-stage requirements of Meaningful Use. During this period, much attention

has been driven away from radiology and imaging informatics purchasing decisions to

focus on more pressing needs. This prioritization scheme is one of the factors that is

contributing to further lengthening PACS replacement cycles. In this low-key environment

for imaging over the last few years, the only PACS vendors that were able to continually

strengthen their foothold in the market and tighten their ties with their existing customers

are those that were able to deliver effectively on workflow optimization, enterprise

communication and IT integration solutions.

Like their radiology counterparts, cardiology providers are being targeted by severe

reimbursement pressures particularly for cardiovascular imaging procedures. Similar to

radiology, historically sustained procedure volumes growth rates have declined to the low-

single-digit range, and have even reversed to negative growth rates for certain modalities.

This additional economic strain has made the business case for cardiovascular image and

information management systems (CIIMS) even more difficult to make for providers.

However at the same time, cardiology providers are in dire need for effective solutions



that ensure best-of-breed functionality for each cardiovascular modality, enable

consolidation of growing amounts of patient data, allows integration of an increasingly

complex enterprise, and provides thorough reporting on more clinical and business

metrics. In such challenging market conditions, only select CIIMS vendors have succeeded

in maintaining their business organization upon a healthy growth path.

Impact of Growth Leadership Award on Key Stakeholders

The Growth Leadership Award is a prestigious recognition of McKesson Provider

Technologies’ accomplishments in the medical imaging informatics industry. An unbiased,

third-party recognition can provide a profound impact in enhancing the brand value and

accelerating McKesson Provider Technologies’ growth. As captured in Chart 1 below, by

researching, ranking, and recognizing those who deliver excellence and best practices in

their respective endeavors, Frost & Sullivan hopes to inspire, influence, and impact three

specific constituencies:

• Investors

Investors and shareholders always welcome unbiased and impartial third-party

recognition. Similarly, prospective investors and shareholders are drawn to

companies with a well-established reputation for excellence. Unbiased validation is

the best and most credible way to showcase an organization worthy of investment.

• Customers

Third-party industry recognition has been proven to be the most effective way to

assure customers that they are partnering with an organization that is leading in its

field.

• Employees

This Award represents the creativity and dedication of McKesson Provider

Technologies’ executive team and employees. Such public recognition can boost

morale and inspire your team to continue its best-in-class pursuit of a strong

competitive position for McKesson Provider Technologies.



Chart 1: Best Practices Leverage for Growth Acceleration

Best Practice Award Analysis for McKesson Provider Technologies

The Frost & Sullivan Award for Growth Leadership is presented to the company that has

demonstrated excellence in capturing the highest annual compound growth rate for the

last 3 years.

McKesson Provider Technologies’ Performance in Medical Imaging Informatics

Based on the independent research findings from two recent Frost & Sullivan studies of

the North American radiology and cardiology informatics markets, McKesson Provider

Technologies is the vendor that has achieved the highest market share gains in the

medical imaging informatics market during the last three years.

Frost & Sullivan’s competitive benchmarking shows that in radiology informatics,

McKesson has continued to consolidate its position in the North American market,

narrowing down the gap with its only larger competitor and gaining more market share

points than any other vendor. McKesson captured 17.9 percent of total market revenues

including service in 2011, the second highest share in the North American market. In this

highly competitive space, this share represents a significant gain over the company’s

estimated share of 15.6 percent back in 2008, while the trend forward is also on the

increase. McKesson continues to succeed in the replacement market by winning new large

customers and thereby moving up-market. At the same time, McKesson is also

experiencing success in the mid- and the small-scale market, currently two very dynamic

customer segments.



In cardiology informatics, McKesson has witnessed an unprecedented success story over

the last few years. The company has grown its share of the North American market rapidly

and constantly since its acquisition of Medcon Inc. in 2005. McKesson captured 14.1

percent of market revenues in 2011, making it the third largest vendor in the North

American market. In effect, McKesson has evolved from a minor market presence only a

few years ago, to become a top-three contender in the cardiovascular image and

information management systems (CIIMS) arena in the span of six years, surpassing in

the process many long-standing competitors in the field.

Key Performance Drivers for McKesson Provider Technologies

Factor 1: Maximizing Medical Imaging Customer Value

The growing number of facilities utilizing its radiology and cardiology informatics products

and services has validated an extremely robust value proposition for McKesson in the

North American imaging informatics marketplace. The brand name has become

synonymous with industry-leading reliability and performance of vendor service and

technology. McKesson’s flexibility and commitment as a true partner to its customers

allow it to meet varying customer needs by leveraging leading-edge technology from its

own portfolio as well as from its industry partners’. Its track record demonstrates that

McKesson’s foremost goal is to provide best-of-breed solutions that optimize workflow

productivity and generate immediate as well as long-term operational efficiencies at

customer facilities.

Frost & Sullivan’s competitive benchmarking shows that the company’s outstanding

operational performance makes it easier for McKesson than for many other PACS vendors

to deploy and support its IT solutions over the long-term. In addition, while many other

vendors had to constrain their research and development budgets during the phase of

market slowdown between 2008 and 2010, McKesson was able to pursue its continual

product development tracks during these challenging years. The recently launched PACS-

independent Enterprise Image Repository exemplifies McKesson’s alignment with the

needs of the marketplace. The company’s high financial stability also allow it to maintain

the highest degrees of price performance and customer service excellence, which explains

the fact that McKesson is the most often considered vendor in radiology and cardiology

imaging IT replacements.

Factor 2: Demonstrating Leadership in Enterprise Integration

Perhaps the most impactful success factor in McKesson’s imaging informatics

implementations is the tighter enterprise integration these deployments yield within

customer organizations. McKesson has demonstrated leadership in the delivery of

products and services that enhance communication between the various stakeholders

scattered across the medical imaging and healthcare enterprise. The vendor’s proactive



involvement with its customer organizations manifestly leads to increased adoption of its

imaging informatics solutions by the physician referral base, as well as by enterprise

stakeholders acting in various IT, clinical and business roles.

The recent acquisition of PeerVue in February 2012 is a good illustration of McKesson’s

commitment to enterprise value generation within customer sites. According to Frost &

Sullivan’s research, this strategic acquisition provides McKesson a leading edge in clinical

workflow and emergency department communication around imaging. Indeed, the solution

has a proven track record of optimizing the use of diagnostic imaging in the emergency

department by improving workflow efficiency, communication, quality of care and patient

safety.

Factor 3: Aligning with the Future of Enterprise Imaging Informatics

A few years ago, McKesson started to build on a business strategy that consists of

promoting the adoption of add-on solutions and services by clinical and IT departments

within its large customer base, in a way that would increase key performance indicators

such as customer penetration, customer retention and customer satisfaction rates. In

doing so, McKesson has aligned its business operations well with the trends affecting

imaging providers’ technology adoption and financing models. This strategy has started to

pay-off for the company in the last two years, as McKesson is now driving more significant

recurring revenue streams from its customer base while securing long-term customer

retention and achieving industry-leading customer satisfaction rates.

In Frost & Sullivan’s opinion, with its recent successes in cardiology informatics

complementing its exemplary performance in radiology informatics, McKesson is ideally

positioned today to deliver effectively on the promise of integrated, enterprisewide

imaging informatics solutions. McKesson’s deep entrenchment in the North American

healthcare IT arena further strengthens the company’s ability to partner with customers

on comprehensive IT solutions, and to assist them proactively in their meaningful use

strategies within and around the medical imaging specialty.

Conclusion

McKesson has been highly successful during the last five years in achieving multi-faceted

and sustainable growth in all of the saturated radiology informatics market, the complex

cardiology informatics market and the fragmented enterprise imaging market. This

achievement further demarcates McKesson from the competition and consolidates its

position within the top-tier enterprise imaging informatics vendor group. Frost & Sullivan’s

analysis for the Enterprise Imaging Informatics Market clearly shows that McKesson is a

reliable PACS vendor whose solution enhances productivity and enterprise integration.

Based on these market share advances and the success factors underlying this growth,

McKesson is the well-deserving recipient of the 2012 North American Growth Leadership

award in Enterprise Imaging Informatics.



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Chart 2: The CEO's 360 Degree Perspective™ Model



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Chart 3: Benchmarking Performance with TEAM Research

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2012 north american enterprise imaging informatics growth leadership award

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