Cerner Corporation says it is fully prepared to meet staffing requirements for replacing the Department of
Defenses electronic health records system in 55 hospitals and more than 350 clinics worldwide.
Last week, DoD announced its much-anticipated decision to award the contract to a team led by government contractor Leidos that includes consultancy Accenture, dental software vendor Henry Schein, and Cerner as the core EHR supplier. Zane Burke, president of Cerner, assured analysts on Tuesday during an earnings call that the company and the Leidos team are ready to hit the ground running for the Defense Healthcare Management System Modernization (DHMSM).
Our globally deployed team stands ready to support the DoD and the DHMSM Mission, said Burke, who added that Salt Lake City-based provider Intermountain Healthcare is also a strategic partner on the project providing clinical governance of solutions and workflow.
Overall, he said the companys winning EHR solution is not only important for the U.S. militarys health system and its 9.6 million beneficiaries but is a positive development for Cerners clients who should have confidence that Cerner will continue to execute to meet all of our current and future commitments.
In response to an analyst question, Burke said clients are actually very excited for the win and that the company has seen a lot of very positive momentum from them. As a result, he said Cerner expects the DoD EHR contract will have a positive impact as we look forward to some of the competitive environments.
Burke referenced the fact that DoDs contract award to Leidos was for $4.3 billion over 10 years, including a 2-year initial ordering period, two 3-year option periods, and a 2-year option period. He told analysts on the call that he was not able to comment on Cerners portion of the award, yet he did note that the company does not expect it to have a material impact on bookings, revenue, or earnings in the near term since the project will have several phases and will start with a small initial rollout.
The Cerner president also tried to set realistic expectations about the total potential value of the DoD EHR award. I know many of you also saw an $11 billion figure cited in regard to the contract before it was announced, Burke commented. As noted in the DoDs press release this estimate is now approximately $9 billion and represents the total estimated program costs over 18 years, not the value of the contract awarded.
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