Cerner

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Cerner Corporation
Public
Traded as NASDAQCERN
NASDAQ-100 Component
S&P 500 Component
Industry Health Care
Founded 1979
Founder Neal Patterson
Paul Gorup
Cliff Illig
Headquarters North Kansas City, Missouri, U.S.
Key people
Zane Burke (President)[1]
Brent Shafer (chairman and CEO)[2]
Products Health informatics software
Revenue Increase US$ 3.402 billion (2014)[3]
Increase US$ 763 million (2014)[3]
Increase US$ 524.4 million (2014)[3]
Total assets Increase US$ 4.530 billion (2014)[3]
Total equity Increase US$ 3.565 billion (2014)[3]
Number of employees
26,000 [4]
Website www.cerner.com

Cerner Corporation is an American supplier of health information technology (HIT) solutions, services, devices and hardware. As of February 2018 its products were in use at more than 27,000 facilities around the world[5] and the company had about 26,000 employees globally.[4]

History[edit]

Cerner was founded in 1979 by Neal Patterson, Paul Gorup, and Cliff Illig, who were colleagues at Arthur Andersen. Its original name was PGI & Associates but was renamed Cerner in 1984 when it rolled out its first system, PathNet.[6] It went public in 1986.[7] Cerner's client base grew steadily in the late 1980s, reaching 70 sites in 1987, 120 sites in 1988, 170 sites in 1989, and reaching 250 sites in 1990. Installations were primarily of PathNet systems.[8]

During this time, Cerner was developing components of a Health Network Architecture (HNA), an integrated IT system designed to automate health care processes. Clients could purchase individual components or the whole system at one time. By 1994, more than 30 clients had purchased the full HNA system, while 100 clients had purchased multiple components of the system.[8]

In 1997, the company introduced Cerner Millennium, an upgrade to its HNA system which incorporated all of the company’s software offerings into one unified architecture. The introduction of Millennium contributed to significant growth for the company, with revenue increasing to $1.1 billion in 2005[9] from $245.1 million in 1997.[10]

Cerner acquired IMC Health Care, Inc. in early 2010 to continue expanding its wellness services to outside commercial employers, pharmacies and wellness programs.[11]

In July 2010, president Trace Devanny left the company[12] and Patterson became the company’s president, in addition to his roles as chairman and chief executive officer.[13] In September 2013, Zane Burke was named president, assuming the title from Patterson.[14]

On August 5, 2014, Cerner announced its intent to purchase Siemens Health Services, the health information technology business of Germany’s Siemens AG, for $1.3 billion.[15] The acquisition was completed on February 2, 2015.[16]

On July 29, 2015, Leidos Partnership for Defense Health, which includes Cerner, Accenture, and Leidos, was awarded a 10-year, $4.3 billion contract to overhaul and manage the electronic health records for the Department of Defense.[17]

CEO and co-founder Neal Patterson died July 9, 2017.[2]

On January 10, 2018, Brent Shafer was named Chairman and CEO and took over leadership responsibilities in February 2018.[18]

Controversy[edit]

In 2001, a memo authored by CEO Patterson and sent to about 400 managers was leaked online. The memo, written in harsh language, was meant to motivate the managers to get more productivity out of employees and promised layoffs, a hiring freeze, closing of an "Associate Center", and the implementation of a punch-card system if Patterson did not see evidence of changes. Patterson's metric was the fullness of the company's Kansas City office lot at the hours of 8 a.m. and 5 p.m. The memo was widely seen as inflammatory and poor management, and Cerner's stock price fell 22% over three days.[19]

In 2005, Cerner and other companies paid for a report by the RAND Corporation which predicted great efficiencies from electronic health records, including savings of $81 billion a year or more, which RAND now says is overstated. This report helped drive growth in the electronic health record and billions of dollars in federal incentives to hospitals and doctors. Cerner's revenue tripled from $1 billion in 2005 to a projected $3 billion in 2013. The study was criticized by the Congressional Budget Office for overstating potential savings. A 2013 reassessment of the 2005 report by the RAND Corporation said that the conversion had failed to produce savings and had mixed results in efficiency and patient care.[20]

Canada[edit]

In 2016, the Nanaimo BC hospital ER began using the system. Physicians and nurses have called it a "huge failure" with it increasing some types of errors and slowing down the emergency department.[21] The system cost CAN$ 230 million dollars.[22]

United States[edit]

In 2002, the installation of a computerized health system by Cerner in the UPMC Children's Hospital of Pittsburgh made it harder for the doctors and nurses to do their jobs in emergency situations and resulted in a "disaster", according to Phillip Longman, a senior fellow at the New America Foundation. Longman wrote, "According to a study conducted by the hospital and published in the journal Pediatrics, mortality rates for one vulnerable patient population—those brought by emergency transport from other facilities—more than doubled, from 2.8 percent before the installation to almost 6.6 percent afterward."[23] Defenders of Cerner in the study charged that the Pittsburgh hospital did not adequately prepare for the transition to the Computerized Provider Order Entry (CPOE) system because it had simultaneously modified its pharmacy process, did not provide adequate wireless bandwidth, and did not have order sets pre-programmed on day one. They stated that other hospitals that more carefully planned the implementation did not experience the same problems.[24]

In 2010 Girard Medical Center, Crawford County, Kansas, hired Cerner to install an electronic records system. But after receiving $1.3 million, Cerner employees failed to get the system running in time to qualify for federal incentive payments, and in September 2011 notified the hospital that it was abandoning the project, according to a lawsuit Girard filed against Cerner. Cerner and executives at Girard agreed that Girard did not have adequate staff to manage the acquisition and implementation of the system.[25] As of June 2014 the case remained in arbitration.[20][26] The outcome of the Girard case will likely be kept confidential due to contract provisions.[27]

In 2012 Trinity Health, a large, bustling hospital in North Dakota, sued Cerner, claiming that Cerner's patient accounting solution didn't work correctly; the parties settled for $106M in 2014.[28]

In 2014, Cerner was embroiled in litigation with the Girard case still unsettled, a grand jury in California having found that Cerner knew that Ventura County healthcare executives were unprepared to work with Cerner in a $32 million installation, and a $31 million Cerner implementation at the Athens Regional Health System in Georgia having turned disastrous, leading to the resignations of the CEO and the CIO of that health system.[26]

Locations[edit]

Cerner's world headquarters campus is at 2800 Rockcreek Parkway, North Kansas City, Missouri.[29] It acquired additional space in Kansas City, Missouri in 2005[30] and in 2006 it acquired another location in Kansas City.[31] In 2013, Cerner announced plans to redevelop 236-acres in south Kansas City, Missouri into an office park. The site was previously occupied by Bannister Mall, which was demolished in 2009.[32] Cerner broke ground on the new campus on November 11, 2014. The $4.45 billion project intends to employ 16,000 new Cerner workers within the decade.[33]

Cerner has offices in about 25 countries worldwide.[34]

References[edit]

  1. ^ "Zane Burke". www.cerner.com. 
  2. ^ a b Corporation, Cerner. "Cerner Announces Passing of Chairman and CEO Neal Patterson". 
  3. ^ a b c d e "Cerner Corp, Form 10-K, Annual Report, Filing Date Feb 11, 2015" (PDF). secdatabase.com. Retrieved Apr 1, 2015. 
  4. ^ a b Davis, Mark. "Meet the new CEO of KC's biggest employer, its first outsider in charge". The Kansas City Star. The Kansas City Star. Retrieved 12 February 2018. 
  5. ^ Smith, Dan. "Cerner Reports Fourth Quarter and Full Year 2017 Results". globenewswire.com/. GlobeNewswire. Retrieved 12 February 2018. 
  6. ^ "Cerner Corporation: Cerner Timeline". Cerner.com. Archived from the original on 2010-01-03. Retrieved 2010-03-16. 
  7. ^ "International Directory of Company Histories", Vol. 16. St. James Press, 1997
  8. ^ a b "Cerner Corporation History". 
  9. ^ Richard McGill Murphy (April 27, 2006). "49 companies batting a billion". Fortune Small Business Magazine. 
  10. ^ "Cerner 1994 Q4 Financials". 
  11. ^ Monegain, Bernie. "Cerner acquisition to expand its employer health centers". Healthcare IT News (18 December 2009). Healthcare IT News. Retrieved 7 April 2015. 
  12. ^ "Cerner, Form 8-K, Current Report, Filing Date July 13, 2010" (PDF). secdatabase.com. Retrieved Mar 23, 2013. 
  13. ^ "Cerner President Trace Devanny to Step Down". Cerner.com. Retrieved 2010-07-14. [permanent dead link]
  14. ^ Stafford, Diane (4 September 2013). "Health care software maker Cerner names Zane Burke its president". The Kansas City Star. The Kansas City Star. Retrieved 7 April 2015. 
  15. ^ Conn, Joseph (2 February 2015). "Cerner closes Siemens Health Services purchase, boosts overseas revenue 50%". Modern Healthcare. Modern Healthcare. Retrieved 7 April 2015. 
  16. ^ Frank, John N.; Tahir, Darius (9 August 2014). "Cerner buys Siemens' health IT unit for $1.3 billion". Modern Healthcare. Modern Healthcare. Retrieved 7 April 2015. 
  17. ^ Amy Brittain (2015). "Cerner wins $4.3 billion DoD contract to overhaul electronic health records". The Washington Post. Retrieved 2015-07-29. 
  18. ^ Monegain, Bernie (10 January 2018). "Cerner names Philips leader Brent Shafer as CEO". HealthcareITNews. 
  19. ^ Wong, Edward (5 April 2001). "A Stinging Office Memo Boomerangs; Chief Executive Is Criticized After Upbraiding Workers by E-Mail". The New York Times. 
  20. ^ a b Reed Abelson and Julie Crewswell, In 2nd Look, Few Savings From Digital Health Records", The New York Times, January 11, 2013.
  21. ^ Harnett, Cindy (May 27, 2016). "Nanaimo doctors say electronic health record system unsafe, should be shut down". Times Colonist. Retrieved 28 May 2016. 
  22. ^ "B.C. government steps in on problem-plagued hospital IT project | CBC News". CBC. CBC. Retrieved 17 January 2018. 
  23. ^ Phillip Longman, "Code Red", Washington Monthly, July/August 2009, Retrieved 2018-04-28
  24. ^ "eLetters for Han et al., 116 (6) 1506-1512". Pediatrics. Retrieved 2010-03-16. 
  25. ^ Joel Schectman for the WSJ CIO Blog. June 26, 2012 Kansas Hospital’s Failed EMR Project Shows Peril of Vendor Relations Gone Bad
  26. ^ a b Shaun Sutner for Health IT Pulse. June 20, 2014 2014 so far a bumpy stretch for Cerner Corp.
  27. ^ Hospital EMR and EHR lawsuits 2012-2014, Retrieved 2018-04-28
  28. ^ Anne Zieger for Hospital EMR & EHR. March 12, 2014 Cerner Agrees To Pay $106M Over Allegedly Defective Software
  29. ^ "Cerner - Contact Us". www.cerner.com. 
  30. ^ Emporis GmbH. "Riverport Campus-Cerner Corporation, Inc., - World Headquarters in North Kansas City, Mo., Kansas City, U.S.A." Emporis. Retrieved 2010-03-16. 
  31. ^ Emporis GmbH. "Cerner Corporation-South Campus, Bldg #I, Kansas City, U.S.A." Emporis.com. Retrieved 2010-03-16. 
  32. ^ "Demolition Begins On Old Bannister Mall". KMBC-TV. 2009-01-21. Archived from the original on 2011-07-19. 
  33. ^ Diane Stafford (2014-11-13). "Cerner breaks ground for its Trails Campus in south Kansas City". Kansas City Star. Retrieved 2015-03-31. 
  34. ^ Bloomberg profile Page accessed July 22, 2015

External links[edit]