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Monday Morning Update 10/29/18

October 28, 2018 News 8 Comments

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From the Cerner earnings call following a small revenue miss that sent shares down 11 percent on Friday: (CERN shares are down 19 percent so far in 2018 vs. the Nasdaq’s 2 percent gain):

  • Q3 bookings were up 43 percent over last year, although revenue was up just 5 percent due to lower-than-expected software and technology sales.
  • The company expects its DoD and VA business to drive growth as financially-challenged providers and lack of regulatory incentives reduce private sector market urgency (“there isn’t anything that’s forcing clients to get deals done.”)
  • The company expects the federal government business, along with the replacement market, to carry the company until HealtheIntent revenue grows. It notes that its population health business has grown slower than projected.
  • Chairman and CEO Brent Shafer says Cerner will be the partner of choice for healthcare innovation.
  • Chief Client Officer John Peterzalek says Cerner is a leader in interoperability and expects to benefit if the government issues interoperability mandates.
  • The company expects its $10 billion VA contract to deliver $1 billion in annual revenue by 2022, although task order timing makes the growth irregular.
  • CFO Marc Naughton says that selling population health tools can deliver $3-4 per member per month, but adding services such as those enabled by its deal with Lumeris could increase that PMPM amount to $15.
  • The company’s ITWorks outsourcing business generates single-digit margins, but selling software and services into that client base can yield 40 percent margins.
  • Naughton, responding to a question about monetizing the data Cerner holds, says he sees eventual opportunity, but regulatory limitations make it a non-focus area for now.
  • Four more DoD sites will go live in early 2020.
  • The company hasn’t decided how the VA work will be divided among Cerner and its partners even though the company originally mentioned a 50-50 split as a placeholder.
  • Cerner will continue with its R&D spend and will focus on business segments that can deliver $100 million in revenue.

Reader Comments

From Jules Verne: “Re: webinars. What advice do you have for getting more registrations?” I get insight from the webinars we do since I see the stats for clicks, registrations, and attendance. My conclusions:

  • Make the goal to educate, not to sell something (we struggle endlessly trying to make this point with the junior marketing people of vendors). Potential audience members won’t sign up for what promises to be a sales pitch and they won’t sit through a webinar that turns into one.
  • Get customers or outside experts as presenters. Nobody will give up an hour of their day to hear a company marketing person’s perspective on population health or analytics.
  • Make sure the presenter is prepared. It’s shocking when during rehearsal the presenter (usually enlisted from a health system) has never seen the slides, doesn’t know what they’re supposed to talk about, or delivers a presentation that doesn’t match the abstract.
  • A product overview or demonstration is not a broadly educational topic and won’t generate many signups. On the other hand, even a handful of attendees is fine if they become prospects. Evaluate success accordingly. We did one super-specialized webinar that drew only five attendees, but they were good leads for the niche product and the vendor was smart to realize that a couple of self-qualified prospects was much better than 100 uninterested attendees (but a marketing person might have, from their perspective, seen it as a failure).
  • Include on the registration page a descriptive abstract and an honest description of the target audience. Sometimes companies get only a small percentage of those who looked at the registration page to actually register, which means something on that page made most of them bail (most likely the webinar description, speaker bio, or asking for too much information to register).

HIStalk Announcements and Requests


Previous polls found that most of us health IT people don’t really care whether our doctors use EHRs and we prefer old-fashioned doctor-patient relationships over evidence-based medicine and technology. Last week’s poll demonstrated more of the puzzling “do as I say, not as I do” dichotomy between our jobs vs. what we want for ourselves and our families as patients, as nearly none of us (me included) keep their own medical information in electronic form.

New poll to your right or here: are you proud of the products or services your employer offers?


Mrs. H bribed me to see “A Star Is Born” with her, and while the movie was good and the acting was terrific (actor-director Bradley Cooper admirably mimicked a singer and singer Lady Gaga excelled as an actor), the key moment for me occurred early in the movie, when I excitedly elbowed a startled Mrs. H to point out that Gaga’s character Ally was wearing a Yes tee shirt (although from their forgettable 1978 “Tormato” tour, I later found by Googling).

Listening: Rebelution, a California-based, highly literate reggae band whose UC Santa Barbara-graduated members are described in articles decrying cultural appropriation as “fratty white guys” (apparently those magazines believe that reggae is the exclusive domain of dreadlocked, spliff-brandishing Rastafarians who refer to everyone as “mon” and whose rainbow-colored clothing and revolution-inciting musical messages are obscured by ganja clouds). At least the bass player’s first name is Marley. Sample lyrics: “Whether you want love or money, good fortune or fame, you want a brand new car, you want the world to change. You better take some action right now, because there’s nothing in the world that you can’t get, so don’t fill your life with confusion and regret, you better take some chances right now.” I’m listening to more reggae these days because it’s one of few genres that haven’t been overproduced into unlistenable vacuity. I’m also enjoying refreshingly non-explicit hip-hop from Common, who I also liked in AMC’s western series “Hell on Wheels.”


October 30 (Tuesday) 2:00 ET. “How One Pediatric CIN Aligned Culture, Technology and the Community to Transform Care.” Presenters: Lisa Henderson, executive director, Dayton Children’s Health Partners; Shehzad Saeed, MD, associate chief medical officer, Dayton Children’s Health Partners; Mason Beard, solutions strategy leader, Philips PHM; Gabe Orthous, value-based care consultant, Himformatics. Sponsor: Philips PHM. Dayton Children’s Health Partners, a pediatric clinically integrated network, will describe how it aligned its internal culture, technology partners, and the community around its goal of streamlining care delivery and improving outcomes. Presenters will describe how it recruited network members, negotiated value-based contracts, and implemented a data-driven care management process.

November 7 (Wednesday) 3:00 ET. “Opioid Crisis: What One Health Plan is Doing About It.” Presenter: Samuel DiCapua, DO, chief medical director, New Hampshire Health Families; and chief medical officer, Casenet. Sponsor: Casenet. This webinar will describe how managed care organization NH Health Families is using innovative programs to manage patients who are struggling with addiction and to help prevent opioid abuse.

Previous webinars are on our YouTube channel. Contact Lorre for information.

Acquisitions, Funding, Business, and Stock


Politico reports that Epic announced at its annual developer meeting that it will reduce its fees for listing third-party software in its App Orchard. One software company’s CEO had previously said that listing a simple HHS family planning questionnaire on the the app stores of Epic and Cerner would cost $750,000 per year. With the change, early-stage startups will pay just $100 per year to gain access to Epic’s API documentation and testing sandbox, then will pay an unstated higher amount once their product is released.


From the Roper Technologies earnings call, following a Q3 report in which it beat both revenue and earnings expectations (the diversified company owns Sunquest, Strata Decision, Atlas Medical, SoftWriters, CBORD, and several other health IT vendors):

  • The company promoted COO Neil Hunn to president and CEO in late August, moving Brian Jellison to executive chairman due to health problems. Hunn came from MedAssets
  • The company’s Medical and Scientific Imaging segment, which represents 29 percent of Roper’s revenue, increased quarterly revenue 11 percent to $380 million.
  • Sunquest’s US business declined in “mid-single digits” while expanding globally, with 2019 expectations for Sunquest continuing to trend down due to competitive pressure. Roper says it will be “rebasing the North American business” of Sunquest. It also notes that it paid only 10 times EBITDA to acquire Sunquest for $1.42 billion in cash in 2012. 


  • Crossing Rivers Health (WI) replaced Evident with Epic in June 2018.
  • Ferrell Hospital (IL) will switch from Medhost to Epic in fall 2019.
  • Chatuge Regional Hospital (GA) will replace Allscripts with Cerner in October 2019.

These provider-reported updates are supplied by Definitive Healthcare, which offers a free trial of its powerful intelligence on hospitals, physicians, and healthcare providers.

Announcements and Implementations

Vanderbilt University Medical Center gets a federal grant to mine its 20-year EHR database and biological samples to look for biologic and genetic markers of Down syndrome.

Government and Politics

The Spokane newspaper interviewed just three veterans for its story on implementing Cerner in the VA, but those they chose were perceptive:

  • Army vet Charles Bourg, 64, questioned why Cerner got a no-bid $10 billion deal, adding that while it’s nice that the VA and DoD are trying to integrate their respective Cerner systems, it’s more important that Cerner connect to outside doctors.  He adds, “You have to go in the basement of the VA to get the records … and it can take weeks. I did get electronic records from the VA to take to the [private practice] doctor, but he couldn’t even open them up.”
  • Former Navy Seabee Charlie Monroe says he’s skeptical about the new system and fears it will take away from the time doctors spend with patients.
  • Air Force veteran Bob Brodie says the VA never paid the bill for his VA-approved stay at a private hospital, which then turned his account over to collections.


A federal grand jury indicts a former IT employee of Catholic Health Initiatives for allegedly issuing $72 million in phony purchase orders to a co-conspirator’s IT consulting firm for integration services, then splitting the take.

AMIA publishes core competencies for master’s-level applied health informatics programs that can be tested after graduation.


The Journal of the American Academy of Dermatology takes down a research paper that analyzed the effect of private equity firms buying up dermatology practices after it receives complaints from several dermatologists who have PE ties. One of them is the Academy’s incoming president, who sold his own practice to a private equity-owned management company on whose board he sits. The peer-reviewed article observed that PE firms selectively acquire practices that perform high volumes of procedures covered by private insurance and Medicare, also noting that quite a few of those practices also run profitable pathology labs.

In Russia, a woman shows up a hospital with an ultrasound order she had changed to a different procedure, then attacks the hospital doctor who refused to perform the test, throwing the order’s clipboard at him and then beating him over the head with his computer keyboard.

Sponsor Updates

  • LiveProcess will exhibit at the Delaware Healthcare Forum October 30 in Dover.
  • Meditech will exhibit at the 2018 AMIA Annual Symposium November 3-7 in San Francisco.
  • Netsmart will exhibit at the NHPCO Fall Conference November 5 in New Orleans.
  • Clinical Computer Systems, developer of the Obix Perinatal Data System, will exhibit at the Annual Perinatal Partnership Conference October 28-30 in Myrtle Beach, SC.
  • OmniSys will add ScriptPro’s SP Central Pharmacy Management System to its Fusion-Rx interactive voice response solution for pharmacies.
  • PatientSafe Solutions, Pivot Point Consulting, Redox, and Surescripts will exhibit at the CHIME18 Fall CIO Forum October 30-November 4 in San Diego.
  • Patientco publishes a new white paper, “Improving Patient Financial Experience Through Smart Payment Technology.”
  • Voalte will exhibit at the OONE Fall Conference November 1-2 in Columbus, OH.

Blog Posts


Mr. H, Lorre, Jenn, Dr. Jayne.
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Currently there are "8 comments" on this Article:

  1. Is it “tee shirt” or “t-shirt”?

    I wouldn’t have guessed that Russian doctors use computers.

    As always, thanks for the updates and insights.

    • That’s a very good question! Dictionaries suggest “T-shirt” as the best choice, which makes sense since the garment resembles a “T” when laid flat. “Tee shirt” and the lower-case “t-shirt” are listed as acceptable alternatives, although now that I think about it, I don’t like “tee shirt” because it’s cutesy (like “tee vee” or “okay”). It’s not a word I commonly use, but hopefully I’ll remember next time.

      Just to confuse things, AP Stylebook says to use “T-shirt” on first reference, but then it’s OK to write “tee” on subsequent references, which seems indecisive if not inconsistent. There’s also “tee ball” for kids, definitely not “t-ball” since it’s a “tee” that the ball is placed upon.

      I actually almost changed my word anyway since what Gaga is wearing seems to be a jersey rather than a T-shirt (there it is!) Nothing that appears in a movie is happenstance, so a costume designer must have slipped the shirt in as an Easter egg. Ms. Germanotta and presumably her character Ally (since the film was set in the present day) were minus-eight years old for that tour, so there’s no obvious reason for her to be casually wearing a 40-year-old shirt around the house.

  2. Mr. H, you missed the part where Peterzalek and Naughton reassured us that HMS GENESIS is going exactly according to plan. I would really like to see these two sitting on either side of Director Behler, in front of Congress, and get to the bottom of who’s failing at their job. Is there really nobody in Congress who will put their foot down on being repeatedly lied to?

      • I dunno, Mr. H., there’s a mile of stops along the spectrum between baring souls and telling the truth. Hope you won’t take this as an insult, but you’re the closest thing we’ve got to “journalism” in this little corner of the world. I’m hopeful you don’t lose your ability to be galled when something is galling.

        “Our four live sites are going as planned.” John Peterzalek, Chief Client Officer

        • John didn’t say according to WHOSE plan. That’s like the old joke of a small business whose sign advertises “Popular Prices,” and when a customer who paid too much questions that, the owner says, “Well, WE like them.”

  3. So Epic is following in the footsteps of Allscripts for their app store? Hands down, Allscripts Apps seems to be light years ahead of the other big EHR companies; they’ve been doing this stuff for years!

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