According to HealthCareITNews, Oracle says its goal is to deliver “zero unplanned downtime in the medical environment and to capture opportunities to expand cloud, AI and machine learning applications for Cerner's healthcare clients.” To be fair, Oracle is very enthusiastic about this deal. Feinberg appears to have decided quickly that Cerner shareholders would be better off taking Oracle’s cash. He had previously been a VP at Google Health for nearly three years and CEO of Gelsinger, a Pennsylvania hospital chain. Oracle is a laggard in the cloud and it lacks the capabilities needed to accelerate Cerner’s growth by making its product better.Ĭerner brought in a new CEO, David Feinberg, in October 2021. Oracle and Cerner Better Off Combined? Not Much Growth opportunities “still remain in niche specialty physician practices and outpatient clinics” leading IBISWorld to forecast 3% annual growth to $15 billion by 2026. IBISWorld sees the industry as maturing as “a large majority of healthcare providers” have adopted EMR. The pandemic has accelerated EMR adoption “due to demand for patient exposure, infection and vaccination tracking” although specialist physicians have reduced adoption. The EMR industry is maturing as office-based physicians have purchased the systems. According to IBISWorld, IBISWorld, the EMR industry has grown at a 3.3% annual rate over the last five years to $13 billion - accelerating 8.7% in 2021 with the average company earning as 12.4% profit margin. The EMR industry is large, growing modestly, and reasonably profitable and is expected to grow very slowly over the next five years. Is Electronic Medical Record Industry Attractive? Modestly So. But my research suggests that the ones that succeed pass four tests. Between September 2020 and September 2021, its free cash flow increased 25% to $387 million. Meanwhile, the market leader - Epic Systems - has overtaken Cerner as its market share grew from 19,5% in 2017 to 23.6% in 2021.Ī glimmer of good news for Cerner is that its free cash flow was strong in 2020 - rising 37% to about $1.2 billion. According to IBISWorld, Cerner’s share of the EMR industry fell from 20% in 2017 to 16.6% in 2021. In 2020, Cerner’s revenue fell 3.3% to $5.5 billion and revenues have been decelerating - from 7.2% growth in 2017 to 6.1% growth in 2019.Ĭerner has also lost market share. Cerner - which develops, markets, installs, hosts and supports health care information technology, health care devices, hardware and content solutions for health care organizations and consumers - is shrinking and losing market share.
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