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Cerner, athenahealth Report Success in Changing EHR Market

Cerner and athenahealth saw significant growth toward the end of 2017 in the ambulatory and community hospital EHR markets.

Cerner and athenahealth both experienced success in the EHR market.

Source: Thinkstock

By Kate Monica

- Cerner Corporation and athenahealth reported significant growth in the fourth financial quarter of 2017 after expanding their respective client bases in both the ambulatory and community hospital EHR markets.

For its part, Cerner experienced a 62-percent increase in fourth quarter bookings over the same time last year, according to Cerner CFO Marc Naughton in recent earnings call.

“Our bookings were at record levels across several key areas, including population health, Cerner ITWorksSM, and revenue cycle, and also included strong contributions from outside of the US,” said Cerner President Zane Burke in a press release. “We believe the strong bookings in the fourth quarter combined with our robust pipeline and strong competitive position sets us up for solid growth in 2018 and beyond.”

Cerner signed several significant contracts throughout the quarter.

“We signed six contracts that were greater than $75 million in Q4,” said Burke. “These included the expanded relations with Adventist Health, which was announced earlier this month.”

READ MORE: Cerner Appoints Brent Shafer CEO, Chairman of the Board

Burke also cited progress with its IT Works and population health management offering — HealtheIntent — as contributing to its successes in Q4. Additionally, Cerner saw success in the ambulatory EHR market with 15 percent growth in bookings over the same time in 2016.

The health IT company also added 29 new small hospitals to its client base through its CommunityWorks EHR deployment offering. CommunityWorks is designed to customize the Cerner Millennium EHR solution to meet the specific needs of community-based care providers.

While Cerner experienced significant growth in bookings, Naughton noted during the call that earnings came in slightly below Cerner’s expectations. The health IT company’s adjusted net earnings during the financial quarter ending on Dec. 30, 2017 were $195.7 million — down from $206.2 million at the same time in 2016.

All told, Cerner saw a 4 percent increase in revenue over the same period in the year prior.

“We expect traditional software revenue to be relatively flat due to the maturing EHR market and a shift to more SaaS models,” said Naughton.

Naughton also indicated earnings were below expected because Cerner had initially planned to sign the EHR implementation contract with VA by the end of the quarter.

READ MORE: athenahealth Overtakes Cerner in KLAS Physician Practice Rankings

“This was based on indications pointing to the signing by the end of November,” said Naughton. “Our plan assumed we’d begin working on initial task orders in Q4, and ramp up workforce quickly throughout 2018.”

Looking ahead, Burke stated Cerner plans to move forward with its Department of Defense (DoD) EHR implementation with a full deployment decision expected this summer.

This decision follows Cerner’s successful completion of its Initial Operational Capability (IOC) program at VA care sites across the Pacific Northwest.

“We remain on track to begin full deployment later this year,” he said. “The IOC sites represent the first successful deployment of a commercial off-the-shelf, comprehensive EHR system in the federal space.”

Burke also noted all four VA care sites already using Cerner EHR systems have advanced clinical decision support, care management, and secure messaging functionality. VA care sites are also capable of engaging in health data exchange with community-based EHR systems.

athenahealth also fared well during this most recent financial quarter, experiencing 14-percent growth in revenue over the same time in 2016.

READ MORE: athenahealth, eClinicalWorks, Epic to Launch Virtual Assistants

Furthermore, the health IT company saw a 13-percent increase in revenue throughout the 2017 calendar year over the year prior.

“Looking back on 2017, I am proud of all that we accomplished,” said athenahealth CEO Jonathan Bush in a press release. “It was an extraordinary year of network growth.  We surpassed the 100 million patient threshold and now serve more than 100,000 healthcare providers.”

For the financial quarter ending on Dec. 31, 2017, the health IT company earned a total revenue of $329.2 million compared to $288.2 million during the same period in 2016.

This growth in revenue follows athenahealth’s decision last year to lay off about 500 of its 5,600 employees for a 9 percent reduction in workforce. The health IT company made the lay-offs as part of an effort to cut costs under pressure from an activist investor.

“We also took action to create a more focused and efficient company and enhance the depth of talent on our Board and management team,” said Bush. “As a result, athenahealth is better positioned to drive increased levels of profitable growth and enhance shareholder value.”

Overall, Bush stated athenahealth ended the year with a strong financial performance. The health IT company continued to expand its presence across the ambulatory EHR and population health management markets.

“In 2018, I look forward to continued progress on our journey to transform the healthcare industry,” said Bush.

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