With revenue up, Cerner remains unaffected by ACA uncertainty

Via Modern Healthcare »

Cerner Corp. posted strong financial growth in the first quarter despite the continued uncertainty surrounding the Affordable Care Act and healthcare industry, the company said Thursday.

One of the nation’s largest health information technology vendors, Cerner is well positioned to help the healthcare industry lower costs through delivery reform, said Cerner president Zane Burke in an earnings call.

“It’s important to step back from the noise and consider that the dialog around Obamacare and its Republican alternatives is mainly focused on access and insurance reform, not care delivery reform,” he said.

Burke said IT is the strongest force behind lowering costs and boosting quality, and the company supports the Medicare Access and CHIP Reauthorization Act of 2015, which rewards providers for better outcomes and penalizes them otherwise.

Another key to driving better care and efficiency is interoperability, though it went unmentioned in Cerner’s earnings call. Despite vendors forming alliances like Commonwell (Cerner is a founding member) and pledging to improve connectivity, getting patient data to move freely between EHR systems remains elusive. “Without data liquidity, it’s harder for us to provide precision care for individuals and manage the health of populations,” said Kerry McDermott, vice president of public policy and communications for the Center for Medical Interoperability, in an interview.

Cerner’s first quarter revenue this year was $1.26 billion, up 11% over the first quarter of 2016. System sales and services drove much of the growth, with revenue up 14% over the previous-year quarter. System sales margins were also up.

Those results put Cerner in a good position both objectively and relative to its most direct competitor, which the company did not name but is widely considered to be Epic Systems Corp. “Overall, our competitiveness is as good as it’s ever been,” Burke said. “We believe our primary competitor continues to be in a more defensive stance as a result of numerous factors, including cost overruns.”