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Cerner Corporation, Kansas City, Mo. RANK: 10

June 24, 2011

Back in 1979, when Kansas City, Mo.-based Cerner Corporation was founded, the concept of the electronic medical record, in the sense that it's

Mark Hagland

Back in 1979, when Kansas City, Mo.-based Cerner Corporation was founded, the concept of the electronic medical record, in the sense that it's understood today, barely existed. And it was another 15 years before all but the most pioneering patient care organizations had one. Still, by focusing on the EMR and associated clinical information systems as its raison d'etre, the company has reaped its bounty now that EMRs are almost a necessity.

Neal PattersonAnd, as one of a handful of behemoth vendors whose focus is largely clinical, Cerner is exceptionally well-positioned in the current marketplace. It's no wonder, then, that Cerner's revenues continue to outpace the market — from $1.2 billion in 2005 to $1.4 billion last year — nearly $220 million in increased revenues in a single year.

Co-founder, Chairman and CEO Neal Patterson isn't surprised in the least. “Worldwide, we are in the era where we are digitizing the delivery platform for clinical medicine.” Because of the complexity of doing so, he says, it's understandable that “there was a lag between healthcare and other industries such as manufacturing or retail, in terms of adoption of information systems. Nevertheless, we are now digitizing clinical care across all the venues of care, and it's a very exciting time. And I think Cerner has been one of the leaders, and I think we've articulated the need for this longer than just about anyone else,” he says, going all the way back to the company's original IPO prospectus in 1986.

As a result of its steady-as-you-go strategy, Cerner continues to rack up the big deals, and is working with a virtual who's who among major health systems implementing the broadest and most ambitious EMR strategies, including Novi, Mich.-based Trinity Health System, Northwestern Memorial Hospital in Chicago, the San Diego-based Sharp HealthCare, and others. And its ongoing (but judicious) acquisition of smaller companies, such as the 2005 buy-up of Ridgefield, Conn.-based VitalWorks (an EMR vendor focused on smaller clinics and physician practices) has helped the company broaden its reach among industry segments.

As a result, Cerner has won kudos from industry observers, including high rankings from KLAS Enterprises, Orem, Utah, which ranked Cerner's Millennium CPOE system the fourth-best EMR product for inpatient systems for 2006. In fact, Cerner has spent $1.3 billion to date on software development, and expects to spend an additional $1 billion before 2010, the company confirms.

At the same time, like all other mega-companies, Cerner has seen its share of customer service and support complaints in recent years. “We recognize the complexity and challenge” involved in attaining customer satisfaction, Patterson says, “and I think we get better daily.” Meanwhile, the company will continue to innovate and to anticipate trends, he says. Clinical IT in healthcare is moving towards a greater level of granularity and personalization, including the personal health record, says Patterson. Overall, he concludes, “More and more of the expectations in our society will have a predicate around highly effective, transparent, and interoperable IT systems.” And Cerner will continue to be at the forefront in anticipating those needs, he quickly adds.