5 questions with Neil de Crescenzo, CEO of Change Healthcare

Change Healthcare and McKesson Corp. finalized their formation of a new company March 2. Their agreement, which was announced in June 2016, results in a new company with a familiar name — Change Healthcare. It now includes 15,000 associates, more than $3 billion in annual revenues and a broad portfolio of complementary capabilities for payers, providers and consumers.

With the merger cemented, Becker's caught up with Neil de Crescenzo, CEO of the new Change Healthcare, to discuss the work to be done, what immediate changes clients may notice post-merger and the advice he has for hospital and health system CEOs leading their organizations through a merger or acquisition.

Note: Responses were edited lightly for length and clarity.

Question: First, congratulations on the completion of the merger! Now, what's next? What do you foresee yourself spending the most time on in the weeks and months ahead? 

Mr. de Crescenzo: What's really exciting is the breadth of capabilities we have across the new company. I'm spending most of my time with customers or team members across the entire company. Since we announced the merger last June, I've had the opportunity to get to know many people from McKesson, but it's not the same as when you finish the merger and everyone is one family.

I'm traveling quite a bit to meet all of the different teams and understand the tremendous value McKesson has been providing its customers, and I'm also having a lot of discussions with customers of either company. A lot of the customers we shared are interested in sitting down with us given the breadth of everything we have to offer and the innovation we can provide them, from patient eligibility verification, decision management analytics and imaging solutions to revenue cycle and payments management, payment accuracy and value-based care solutions — a comprehensive portfolio of solutions. That is atypical in the healthcare industry, which has been called one of the largest cottage industries in America. Customers have long said that they want a larger breadth of solutions and more innovation than they have historically been able to take advantage of from companies in the industry.

Q: Will customers notice any changes in their business with Change post-merger? 

NdC: No matter what organization they had been dealing with, the main thing they will see is their trusted partner can now bring them a broader portfolio of solutions and more innovation than was historically the case.

Look at some areas we focus on, such as payment accuracy: We serve nine of the top 10 payers and more than 175 million covered lives. We now support 20 of the top 25 Medicare Advantage plans and all of the top five Managed Medicaid plans with a broad and substantial portfolio of value-based care solutions.

A capability that didn't exist in the legacy Change Healthcare is the evidence-based criteria called InterQual that were developed over the course of decades. They are used in more than 4,600 hospitals and care facilities, by health plans covering 100 million lives, as well as CMS. These are great capabilities brought to bear for customers that they previously would have had to go to different companies and where the capabilities are not integrated with other mission-critical systems, which is what we will do in the new Change Healthcare. That's exciting for us and exciting for customers.

We have continued our focus on member, patient and consumer engagement — I'd say that's a consistent theme and an area where we will continue to invest tens of millions of dollars. No matter what changes occur in Washington, D.C., that will be important for the future of healthcare.

Q: How, if at all, are your customers' revenue cycle management needs evolving? What are you seeing among hospitals, health systems or payers? 

NdC: As the replacement for the ACA gets finalized in Washington, we can expect a continued focus on new, innovative health plan models. Clearly a lot of the discussion in Washington now is about advanceable, refundable tax credits, expanding the use of HSAs and the evolution of Medicaid. But whichever payment models are ultimately most favored by the commercial insurers or CMS, or whichever changes are made to the Medicaid program, it seems that under any circumstances member, patient and consumer engagement, risk adjustment, quality management, financial management, measurement and reporting and analytics in general around alternative payment models, including bundles or other models, will continue to be necessary.

Q: You now head up a company with 15,000 team members. That's substantial, but the tech industry is competitive and finding top talent is always a challenge. Say another CEO called you up today to ask for an interview question that would distinguish the best candidates from the mid- to low-performers. What question do you suggest he or she ask?  

NdC: We encourage everyone in our company to determine whether the person we're looking at hiring truly has a passion for understanding and then solving customers' needs. This includes needs our customers may not even be able to fully articulate themselves, because they are emerging.

Some people spend quite a bit of time in the industry and want to solve problems, but because they have been in the industry for some time, they sometimes have their own preconceived notions of what problems they are trying to solve. We have people with decades of experience. We try to make sure they dig in deep with customers and understand their biggest challenges, but also think about innovative ways to solve those problems or take advantage of their opportunities using tools like design thinking, ethnographic research and jobs-to-be-done analysis.

That's an important attitude we look for in people we want to hire — it's also why we have a mix of thousands of people with decades of experience in areas we operate in and then a mix of people who have spent their careers in other industries or roles, but are excited about working in healthcare and inspiring a better healthcare system.

Q: You've just finalized a significant merger. Any advice for hospital or health system executives who may be going through the same process?

NdC: Having been involved with a fairly substantial number of mergers and acquisitions at Oracle and, before that, IBM — which were both impressive acquirers — it's this: Culture trumps all.

We spent a lot of time with the leadership across both McKesson Technology Solutions and the legacy Change Healthcare to understand how we did work, what types of leaders we had and how we would work together. Both companies have made big investments in nurturing customer relationships. It was exciting to see the mutual customer centricity of both companies as we spent time with people and understood each other's culture.

After announcing the acquisition last year, we spent a lot of time really understanding the strengths of each organization and how to take the best of both cultures and create a new culture based on existing tenets but appropriate for a company that is a leader in the field. Basically, culture trumps all. When you get involved in mergers or acquisitions, it's tempting to get caught up in the finances and regulatory approvals. All those things are incredibly important, but equally important is the focus on culture. What kind of new and exciting culture are you creating in a merger to get people excited about coming to work and serving customers at the new company?

Q: That's some timeless advice. Any final thoughts as we wrap up?

NdC: It's exciting to see the industry moving forward with a continued focus on patients and value. We have a business based on a more connected, consumer-centric, data-driven, value-based healthcare system. Those will be core principles of whatever changes we see in healthcare in the years ahead. It's an exciting place to be — for me, our team members, and most importantly our customers and their customers.

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