Building upon their multi-year strategic partnership, Cerner Corp CERN and Intermountain Healthcare recently implemented iCentra – a model electronic health record (EHR), practice management and revenue cycle system – at two Intermountain hospitals and 24 clinics across northern Utah.
iCentra, which is the result of collaboration between Intermountain and Cerner associates, integrates the former’s innovative care process models with the latter’s technology.
The iCentra implementation began on Feb 21 at Logan Regional and Bear River Valley hospitals and surrounding Intermountain clinics throughout Box Elder and Cache counties. Going forward, Intermountain plans to bring all acute care facilities, ambulatory clinics, affiliated practices and business offices live on iCentra in 2015 and 2016, by using a regional deployment strategy.
Cerner and Intermountain had partnered in Sep 2013 with a shared vision to improve quality and make healthcare costs sustainable. A component of this multi-year partnership is to implement Cerner’s electronic medical record and revenue cycle solutions across all of Intermountain’s hospitals and clinics.
We note that iCentra was implemented 15 months after Cerner and Intermountain announced their strategic partnership. With the intent of creating a truly integrated health care system, iCentra was developed by teams of Intermountain and Cerner associates, as well as input from 400 Intermountain physicians.
As part of their multi-year strategic partnership, Cerner and Intermountain will continue to work with physicians, clinicians, and business teams to improve iCentra and enable future innovations.
We note that Cerner is greatly benefiting from the accelerated momentum among medical providers to comply with federal EHR requirements. Further, the MEDTECH Act, which aims at reducing the FDA’s regulatory supervision of the Medical IT, is also expected to benefit EHR vendors like Cerner.
The lenient FDA regulation will help EHR vendors to commercialize innovative solutions at a much faster pace that will ultimately benefit their top line. Software upgrades will also turn out to be much easier and cost-effective.
We believe that Cerner’s non-EHR offerings for the untapped Healthcare Information Technology (HCIT) market, such as population health management and care coordination, are also important growth catalysts.
However, the HCIT market is highly competitive, which puts considerable pressure on both pricing and margins. Moreover, a growing proportion of low-margin services and technology resale may further affect margins.
Stocks to Consider
Currently, Cerner carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader medical industry include AmerisourceBergen Corp ABC, Cardinal Health CAH and Merit Medical MMSI. All the three stocks carry a Zacks Rank #2 (Buy).
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