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Cerner/Siemens Mega-Deal: One Shared Client CIO Looks Ahead to 2015

December 30, 2014
by Rajiv Leventhal
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With deal expected to close early next year, BayCare CIO gives his perspective going forward

In August, when the Kansas City, Mo.-based Cerner Corporation acquired Siemens’ health IT division for $1.3 billion, there seemed to be a feeling of ambiguity in the industry, and this was for good reason—oftentimes when there are mega deals such as this one, the immediate future feels uncertain. 

The deal, which is expected to close early in 2015, will make Cerner the top revenue-earning company among U.S. electronic health record (EHR) vendors. Cerner says with the deal it will have 20,000 associates in more than 30 countries, 18,000 client facilities, including some of the largest health care organizations in their respective countries, $650 million of annual R&D investment, and a projected $4.5 billion of annual revenue.

Shortly after the acquisition was announced, existing Siemens CEO John Glaser, Ph.D.—who will join Cerner upon the deal’s completion—told Healthcare Informatics’ Editor-in Chief Mark Hagland that for the vendors’ shared clients, “The premium on service and high-quality software will remain quite high.” In the interview, Glaser also mentioned the importance of emphasizing population health and care management.

To this end, HCI recently spoke with Tim Thompson, CIO at the Clearwater, Fla.-based BayCare Health System, which incudes 11 hospitals and 284 access points across a four-county service area. BayCare is a shared client of both Cerner and Siemens, which has helped the organization reach the Healthcare Information and Management Systems Society (HIMSS) Level 6 designation. Thompson spoke with Associate Editor Rajiv Leventhal about BayCare’s immediate reaction to the deal at the time and what it means for the health system going forward in 2015. Below are excerpts from that interview.

Tell me about your working relationship with both vendors up until now.

I’ll start with Siemens, since we have been a customer of theirs for more than 25 years. Siemens’ legacy products such as Envision and Signature have been used at a number of our facilities for a long time. More recently, about two years ago, we signed a contract to move to their Soarian product to provide a common scheduling solution for BayCare as well as a common registration and a common billing solution across all of our ambulatory and hospital settings. That has been in implementation for 18 months now.

From a Cerner perspective, we made a decision eight years ago to implement its EHR across all of our hospitals, and we finished that implementation about a year ago. More recently, we made the decision to implement the EHR in our physician’s offices, and we have about 50 out of 400 doctors installed on that. We will finish that roll out this year. Finally, we are a public development partner with Cerner around its population health solution on care management.

What were your first thoughts when the deal was announced?

When we first heard about it, I was in a board meeting giving an update on both initiatives having to do with Siemens and Cerner, actually. My initial reaction was pretty positive and it stays there today. Here’s why: we’re a long time customer of both sets of products, and the way I describe BayCare is that Siemens is on the front and back end, and Cerner is everything in the middle. Like anywhere, we have a bunch of other applications, but largely those are our primary vendors when you look at the patient continuum. To have the two come together and do that potential integration for us and bring those products tighter together, I believe that’s a positive thing.

What opportunities will arise as a result of this deal?

There are two areas that I think about. Since we are a customer of both vendors, today we use interfaces to bring those two products together. My hope is that Cerner brings those two products closer together and we have a more holistic solution that’s a more seamless experience for our patients and those using the system. They work very well together today, but I think they can take that next step.

Secondly, both companies, in my experience, have a commitment to research and development, as well as looking at the industry and figuring out how to innovate their products. Now they are bringing all of that together with different minds and smart people from two organizations to enhance that even further. And they are even making a further commitment to R&D going forward—that will be a positive thing for healthcare. Those are two primary things, and the third benefit is having an expanded market share, with more customers and more thinking in driving the products.

Sometimes these mega-deals can be rockier than expected, especially initially. Do you have any concerns about that?

From my end, there is really no negative to this. Might something happen? Sure, I suppose. But at this point of time, I don’t see it. I sit on Cerner’s advisory group, the CIO council or whatever they call it, and we go to the user’s meetings and everything. This hasn’t really been brought up in the meetings, but I don’t see their internal business significantly impacting us.

What do you envision happening to the Soarian product, in respect to your health system?

We are using it for registration, scheduling, and billing right now. That’s been great for our patients because across BayCare, when a patient calls, we can see where you’re going, where you’ve been across the system, and thus do better coordinated care.

As a Soarian customer, I certainly hope that the product is enhanced and evolved, and brought into the overall Cerner solution. We like the system. I don’t have Cerner’s crystal ball, so we’ll see how it manages those products long term, but I am fairly confident that Cerner will bring that product along, integrate it within their products. We feel good about it in terms of the patient experience in the long term.

Overall, how does this deal help BayCare most?

It will bring a better experience for the patient. By bringing the products together, as with better integration, we have all of your information, we know more about you and we can treat you quicker because we have the right information and the right integration. All of that creates a better patient experience, and that’s what is most important for me.

We have also seen tremendous success through the Cerner patient portal, whether it’s looking at results or paying bills, it has really helped folks manage their healthcare. We have seen that at every hospital, 10-20 percent of our patients are getting on the portal and using it.

Some saw this deal as a competitive move by Cerner to stay toe-to-toe with Epic. If that’s the case, how do you feel about it?

The way I look at it, I think Cerner and Epic are two giants in this industry. They both offer good solutions and it’s a good, competitive environment. We’re not focused on Epic because its not what we do every day. We’re happy with where Cerner’s focus is right now with enhancing physician functionality and where it’s driving to from a population health perspective, which is where we believe we will need to be. From my end, I can speak to Cerner only really, not the Epic side.

Lastly, what advice can you give to other Cerner and Siemens shared clients?

Both companies have impressed me with their willingness to listen to the customer, and I don’t think that will change. My advice would be to stay engaged with the vendors, and keep pushing them to make our industry better and help make the patient experience better. The broader customer base they have, which they now get with this acquisition, means more feedback and better solutions. When I look now at the customer base of Cerner and Siemens, you see very large health systems. If you keep adding good strong costumers, you’ll have a better product for the patient in the long run.

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