We heard from nearly everybody in the health IT business in the wake of the team of Leidos, Cerner and Accenture Federal winning the $4.3 billion Department of Defense electronic health records contract last week. But not Cerner.
The Kansas City, Mo.-based EHR giant was in a mandatory quiet period before its second-quarter earnings announcement at the time. that ended Tuesday, when Cerner disclosed that it earned $115 million last quarter, down 11 percent from $129 million a year earlier.
Revenues jumped 32 percent, to nearly $1.13 billion, while Cerner posted a quarterly record for new bookings of $1.29 billion.
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That is mostly good news for shareholders, but we were more interested in what Cerner executives had to say during the conference call with analysts. President Zane Burke did the honors, and offered some interesting statistics about the scope of the Defense Healthcare Management System Modernization effort, known as DHMSM (“dim sum”) in bureaucrat-speak.
“We are honored, humbled, and excited to be a part of the team that won what we believe was the most objective and comprehensive evaluation of technology platforms and solutions ever conducted. We now have the opportunity for Cerner’s suite of integrated solutions to replace the DoD’s legacy health IT system in its 55 hospitals and more than 350 clinics worldwide, as well as in ships, submarines and other locations in the theater of military operations,” Burke said.
Burke added that the project could take as long as 18 years. The initial contract is for two years and $4.3 billion, but the Pentagon has two three-year options plus a two-year option to extend the deal. Additional follow-up work could extend the commitment into the 2030s.
“We are not able to comment on Cerner’s portion of this, but note that we do not expect this to have a material impact on bookings, revenue or earnings in the near term since the project will have several phases and will start with a small initial rollout,” Burke said.
A Personalized Approach to Medication Nonadherence
At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
He also assured current clients that Cerner had enough staff and resources to continue to serve them as the company fulfills its new Military Health System commitments.
