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Cerner Seeks EHR Contracts with More Government Agencies

Cerner leadership revealed plans to pursue EHR contracts with federal and state agencies on the heels of its DoD and (still unsigned) VA deals.

Cerner EHR

Source: Thinkstock

By Kate Monica

- Cerner Corporation recently held its third quarter 2017 earnings call with investors and expressed an interest in landing EHR contracts with additional federal agencies beyond the Department of Defense (DoD) and the Department of Veterans Affairs (VA.)

President Zane Burke, Chief Financial Officer (CFO) Marc Naughton, and Chief Operating officer (COO) Mike Nill discussed the health IT company’s recent financial performance earnings as well as its prospects for 2018. Cerner officials also addressed the state of projects including the DoD MHS Genesis implementation and ongoing VA EHR contract negotiations.

Overall, Cerner executives reported Q3 earnings were disappointing. While revenue was up eight percent over last year, bookings were down. Executives attributed the losses to several large deals not coming to fruition. However, Naughton stated strong Q4 bookings would ensure 2017 earnings aligned with expectations.

Burke spoke about the status of contracts with DoD and VA. Last month, MHS Genesis went live at Naval Hospital Bremerton. Most recently, Cerner completed the initial Operational Capability program when the system went live at Madigan Army Medical Center in Tacoma, Washington.

“These are significant milestones as we have now deployed a full set of capabilities, and these go lives keep us on schedule to begin broader deployment next year,” said Burke.

Burke also stated Cerner’s work negotiating a contract with VA about the department’s own EHR system implementation is proceeding according to plan.

“We have made good progress working with the VA on scoping the full work effort, designing the project plan, and negotiating a contract, and we expect to sign a contract by the end of the year,” he said.

Cerner is expected to be the prime contractor on the implementation.

“Concurrent with our contracting with the VA, we have been finalizing contracts with partners that will help us on the project, and we will announce our key partners soon,” Burke stated. “We are confident in our ability to deliver given our experience with the DoD project and the complementary skills and resources that will be provided by our partners.”

In a House committee hearing on October 24, VA Secretary David Shulkin revealed the full Cerner EHR implementation is expected to be completed at all VA care sites in seven to eight years.

“We feel a great sense of pride and responsibility to have the opportunity to support our veterans and extend the reach of the platform being established through our work with the Department of Defense,” said Burke.

In addition to the DoD and VA implementation projects, Cerner executives also expressed an interest in expanding its business dealings to other federal agencies.

“We believe we are also in the early stages of government business contributing to our growth, and this goes beyond DoD and VA, as it includes opportunities like Federal Bureau of Prisons, Coast Guard, Indian Health Facilities, and State Medicaid programs,” said Burke.

Burke also noted Cerner will take advantage of opportunities to pursue contracts with the nearly 2,000 hospitals still operating on legacy EHR systems.

“While many of these opportunities are smaller, there are still some large opportunities, many of them are accessible directly through our large existing clients that are looking to standardize on Cerner at sites they have acquired or that are still on legacy EHRs,” he stated.

Additionally, Burke said Cerner foresees opportunities for business in niche markets such as ambulatory, behavioral health, post-acute care, advisory consulting, employer services, and other markets. Cerner intends to leverage this growth into improving upon its population health management platform.

“I believe these areas of growth provide a solid bridge to the ramping of what we believe to be an even larger opportunity around population health,” said Burke. “We believe we can create significant value in the post fee-for-service economy with our core population health solutions as well as services that we will be rolling out in coming years.”

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