KLAS Research: Cerner gains among smaller hospitals, loses ground with bigger players
Report concludes that big changes at Cerner, including its acquisition by Oracle, are likely to influence the long-term plans of current and potential EMR customers.
Despite a dozen years of steady implementation of electronic medical records systems in the U.S., strong EMR system purchasing is continuing in a variety of hospital market segments.
A new report on system purchasing by acute-care hospitals nationwide – the U.S. Hospital Market Share 2022 – from the consultancy KLAS Research concludes that “EMR purchasing continued to be high in 2021” despite challenges such as inflation, the COVID-19 pandemic, clinician shortages and the effects of burnout among staff.
Cerner saw growth in contract wins among smaller hospitals last year, but it experienced some erosion of market share among larger provider organizations, the report shows. And while the total number of beds at hospitals using Cerner’s EMR software declined in a five-year period, the bed count at Epic’s hospital EMR system users surged in that time frame, KLAS reports.
Cerner gets more smaller hospitals
Data for 2021 shows that Cerner’s new customers “continue to be mostly small, stand-alone hospitals,” the KLAS report notes. In fact, Cerner led the market in EMR contract wins among stand-alone hospitals with fewer than 200 beds. KLAS’s analysis shows that 63 percent of Cerner’s overall acute-care hospital contract wins last year were for its CommunityWorks system designed for community hospitals.
Cerner also achieved some success in winning contracts from specialty hospitals, although one large organization that is a customer for its Millennium system underwent expansion in 2021 and accounted for 65 percent of Cerner’s new specialty hospital contracts.
Cerner did not fare as well among larger organizations, according to KLAS’s report. “Cerner lost a substantial number of Millennium PowerChart customers and had the most losses on a go-forward platform,” the report notes. “The vast majority of leaving customers moved to Epic. About half of Cerner’s hospital losses were competitive, while the remaining were customers who switched to Epic after being acquired by larger organizations.”
Among healthcare organizations that operate two to 10 hospitals, Cerner saw contract wins representing a total of 12 hospitals, compared with contract losses representing a total of 21 hospitals. In this segment, Cerner was in use at 132 organizations representing 342 facilities in 2021.
Among larger systems with more than 10 hospitals, Cerner’s EHR software was in use at 51 organizations representing 685 hospitals last year. That was slightly down from the previous year – contract wins added 12 hospitals, while contract losses resulted in reductions of 19 facilities.
As a result of these shifts in market share for larger hospital contracts, Cerner saw “the largest net decrease in number of beds” in 2021 among all EMR vendors, KLAS reports. “Outside of Cerner’s government contracts, no net-new health systems have selected Cerner since 2013,” the consultancy concludes.
From 2017 to 2021, Cerner gained contracts for 102 hospitals, yet the number of beds represented by all its customers declined by 3,297, according to KLAS. In contrast, Epic gained contracts at 397 hospitals in those five years, representing a pickup of 80,326 beds.
Over the past sixyears, KLAS estimates, Cerner’s market share for EMR software has remained fairly steady at about a quarter of all U.S. acute-care hospitals. As of December 2021, KLAS estimates, Cerner’s EMR software was in use at 1,337 acute-care hospitals, operating almost 236,000 beds. By contrast, KLAS reports that 1,802 facilities, operating nearly 390,000 beds, are using Epic’s records solutions.
In its new report, KLAS estimates that Cerner’s EMR systems are being considered by 17 hospital organizations, and it says that the vendor’s software has been selected or is considered the likely choice by four of those organizations.
The big picture
For the entire hospital EMR market, KLAS estimates that 341 hospitals of all sizes were impacted in 2021 by an EMR purchase decision, including migrations. This represents a 44 percent increase over 2020.
Migrations – which KLAS defines as a decision to transition from a vendor’s legacy product to the same vendor’s newer offering – quintupled from 18 in 2020 to 91 in 2021, which, the consultancy says, “was driven primarily by Meditech and CPSI customers migrating to their respective vendor’s go-forward technology.”
Impact of changes at Cerner
Overall, the extent of changes that Cerner has experienced in the last 12 months is likely to impact purchasing decisions, KLAS predicts in an article providing further analysis of its market share report.
Cerner “has a new CEO, introduced the new RevElate revenue cycle solution and announced [it was acquired by] Oracle,” analysts note. “Individually, these announcements are big news, and combined, they are likely to influence the long-term plans of current and potential customers. It’s too soon to see how these changes will make an impact, but we’ll be surprised if market share doesn’t shift in some way as a direct result.”