While Cerner's megadeal to acquire Siemens' health IT portfolio for $1.3 billion was made with an eye on a future beyond Meaningful Use, it has vaulted the company ahead of rival Epic in terms of number of hospital clients, according to Chilmark Research Analyst John Moore.
Moore, in a blog post on Chilmark's website, dissected the deal in what he calls his "back of the envelope analysis."
Moore noted that in acquiring Siemens' business, Cerner gains a "reasonably good financials solution," which he says has been a weak spot for the latter to date. Ultimately, he said, success will be measured by how well Cerner is able to integrate its clinical package with Siemens' financial package.
Additionally, Moore said, Cerner also bolsters its presence in Europe, which he calls a target area for growth.
Mitch Mytych, a principal at Menomonee Falls, Wisconsin-based Health Information Consulting, told Health Data Management that the deal also will be measured by how, or if, Cerner capitalizes on Siemens' relationship with NextGen Healthcare for physician software.
Both Moore and Mytych viewed the cost to Cerner as high.
"The cost to support all that is now in the portfolio is going to be a challenge," Mytych told Health Data Management.
Moore, however, seemed slightly more optimistic.
"It is ... very uncharacteristic of Cerner to make such a large acquisition," he said. "However, Cerner sees value here to leverage long-term, and they do look long-term."
On a conference call shortly after the deal's announcement, Cerner CEO Neal Patterson said that IT has become "ubiquitous across healthcare." To that end, he said, it will play a major role in helping the industry evolve as it moves toward population health management.
To learn more:
- here's Moore's post
- read the Health Data Management article