Change Healthcare, McKesson unit complete merger

McKesson and Change Healthcare Holdings have completed a merger agreement announced last June, which will combine the majority of McKesson Technology Solutions with substantially all of Change Healthcare's business.

The combined company will be known as Change Healthcare.

The new company is jointly owned by Change Healthcare stockholders and McKesson, which has a 70 percent stake in the company. Plans call for the merged organization to soon become a publicly owned company through an initial public offering of stock.

Under the agreement, McKesson has moved the majority of its Technology Solutions products into Change Healthcare Holdings, which was known as Emdeon until it changed its name through a rebranding initiative in September 2015.

Change Healthcare is a major claims clearinghouse and revenue cycle management vendor. The products under McKesson's Technology Solutions division include medical imaging, workflow, business performance services, health information exchange, analytics and the Relay Health unit.

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Over time, the new company will offer significant value to providers and payers, but the next year could be challenging for clients, with tremendous change in customer support levels, predicts John Osberg, a merger and acquisition specialist at Informed Partners, a consulting firm. Conducting an IPO also could be distracting for the combined company.

“In the long run, they will be in a very strong position,” he adds. “They have the potential to be the de facto standard for healthcare electronic data interchange transactions.” On the upside, Change Healthcare will be able to combine a treasure trove of claims and clinical data from its EDI transactions and use the data to aid providers in analyzing data to improve population health and patient safety initiatives, Osberg predicts.

Change Healthcare issued the following statement to Health Data Management:

“Change Healthcare is committed to meeting our customers and partners’ needs with the highest quality products, support, and services. Together, we will create a stronger, increasingly collaborative, and more efficient healthcare system that enables better patient care, choice, and outcomes at scale.”