Cerner Faces Challenges in Integrating Siemens
The pending $1.3 billion acquisition of the hospital information systems business line of Siemens Healthcare will enable Cerner Corp. to be a stronger competitor to Epic Systems Corp., while also being in line with Cerner CEO Neal Pattersons vision of embracing change to make a difference. But danger looms.
The pending $1.3 billion acquisition of the hospital information systems business line of Siemens Healthcare will enable Cerner Corp. to be a stronger competitor to Epic Systems Corp., while also being in line with Cerner CEO Neal Pattersons vision of embracing change to make a difference. But danger looms.
That is the view of health information technology mergers and acquisitions consultant John Osberg, managing partner at Informed Partners LLC in Marietta, Ga. But it will take a monumental effort to integrate Siemens, and some time, he contends in comments to Health Data Management. This deal was not for the amateurs. It is a lot more than a financial change of ownership.
The industry is better served by having Siemens again under U.S. ownership, Osberg believes. German ownership was a barrier to growth and development of Siemens, as the company did not adapt to a rapidly changing healthcare industry.
In the $1.3 billion acquisition, expected to close in early 2015, Cerner also gets Siemens HDX claims clearinghouse, which will be a strong asset and drive new revenues, according to Osberg. Cerner having HDX will also cause Epic to increase their commitment to EDI in the future, I predict. His bottom line on the deal: This is good for the industry and good for Cerner.
Mike Mytych, principal at Health Information Consulting LLC in Menomonee Falls, Wis., is more cautious of the deal. Success rests on several major issues, he says, such as whether Cerner will take advantage of Siemens relationship with NextGen Healthcare for physician software, or find another vendor to strengthen the ambulatory side. Mytych likes Cerners pickup of Soarian Financials, if they can embed the process rules engine into Cerner products.
The big question is the long-term future of Soarian. Mytych wonders what Cerner means when it pledged to support the Soarian platform for at least 10 years. Will they finish it and then have two products? Will Soarian be the Cerner Paragon for community hospitals?
History shows that mega-mergers in the health information technology field often turn out to be troublesome. In his mind, Mytych sees the $1.3 billion price tag as a steep price to pay and the cost to support all that is now in the portfolio is going to be a challenge, as has been the case at Baxter, GE and McKesson from a historical perspective.
That is the view of health information technology mergers and acquisitions consultant John Osberg, managing partner at Informed Partners LLC in Marietta, Ga. But it will take a monumental effort to integrate Siemens, and some time, he contends in comments to Health Data Management. This deal was not for the amateurs. It is a lot more than a financial change of ownership.
The industry is better served by having Siemens again under U.S. ownership, Osberg believes. German ownership was a barrier to growth and development of Siemens, as the company did not adapt to a rapidly changing healthcare industry.
In the $1.3 billion acquisition, expected to close in early 2015, Cerner also gets Siemens HDX claims clearinghouse, which will be a strong asset and drive new revenues, according to Osberg. Cerner having HDX will also cause Epic to increase their commitment to EDI in the future, I predict. His bottom line on the deal: This is good for the industry and good for Cerner.
Mike Mytych, principal at Health Information Consulting LLC in Menomonee Falls, Wis., is more cautious of the deal. Success rests on several major issues, he says, such as whether Cerner will take advantage of Siemens relationship with NextGen Healthcare for physician software, or find another vendor to strengthen the ambulatory side. Mytych likes Cerners pickup of Soarian Financials, if they can embed the process rules engine into Cerner products.
The big question is the long-term future of Soarian. Mytych wonders what Cerner means when it pledged to support the Soarian platform for at least 10 years. Will they finish it and then have two products? Will Soarian be the Cerner Paragon for community hospitals?
History shows that mega-mergers in the health information technology field often turn out to be troublesome. In his mind, Mytych sees the $1.3 billion price tag as a steep price to pay and the cost to support all that is now in the portfolio is going to be a challenge, as has been the case at Baxter, GE and McKesson from a historical perspective.