H.I.S.-tory,

by Vince Ciotti

© 2013 by H.I.S. Professionals, LLC, all rights reserved.

Episode #108:

Cerner Part 5: HNA

Wonderful Book• I must give credit for much of

the story of Cerner so far to an amazing book (front cover on the first slide, back cover here) commissioned by Neal & Co. to be written by Jeffrey Rodengren circa 2006.

• Thanks again to April Martin at Cerner who steered me to this copy I found on eBay for an obscene price, but it’s the only case in HIS-tory where a vendors’ founders cared enough about their legacy to have it professionally documented – kudos!

“TableRock” Project in 1994• And just what’s a “TableRock?” The

codename comes from a series of “table” meetings that Neal Patterson chronicled in an internal memo wherein he, Cliff and Paul made a series of big decisions that guided Cerner beyond LIS and into the HIS industry.

• It started out as a “client/server” version of the Health Network Architecture (HNA) that Cerner originally used to build its LIS out into all of the various lab modules beyond the LIS core: AP, Micro, etc.

• Cerner’s original hardware platform was Dec VAX minis, which were the leading mini platform for LIS systems, as shown in this table from Dorenfest’s 1988 Guide.

Bold Vision• In what must have seemed a daring vision back in the mid-90s,

Neal & Co. announced their “TableRock” project at Cerner’s 1994 users’ conference, that would entail many advanced capabilities:– Support “community-based” delivery models (early IDNs)– International requirements (PathNet ran in Canada since ‘85)– Leverage desktop computing (PCs were just hitting their stride)

• The application side of this new TableRock vision, which was later renamed HNA V500, included the same series of applications and modules that enabled HBO and Meditech to grow their HIS:- Nursing Doc, Orders Entry & Results Reporting- Census, ADT, MPI & OP Registration/scheduling- Pharmacy, Radiology & other niche ancillaries

• As shown on the right, HNA sold well, eclipsing lab revenue for Cerner by the end of the decade:

Amazing Growth• The time-line below shows the evolution of Cerner’s product line

from its LIS beginnings in 1979 to today’s HIS, all self-developed. Only Meditech, CPSI & Epic also built, rather than bought an HIS.

Acquisitions• Even though the bulk of its Millennium HNA product line was self-

developed, with its enormous revenue growth and successful public offering, Cerner used the capital to acquire other vendors:

• Citation – in May of 2000 was a potential game-changer as Citation ruled the small hospital LIS market with over 300 sites on its C-LAB product, just like PathNet did in the large LIS market. Founded in 1979, Citation rode the micro revolution with its PC-based system selling well both in the US and overseas: Canada, Latin America & Asia. In the event, the revenue potential was too small, and Cerner instead offered remote hosting over C-LAB’s PCs on a Novell LAN.

Mini and Mega Deals• Other acquisitions & deals Cerner made over the years include:– Megasource - In November, 1993 Cerner acquired this

Pharmacy niche player from Michigan for $6.7 million. Like Citation, Megasource was big in the small hospital market with its IBM PC-based “MS-Meds” product, interfaced to “foreign” HIS systems via their “MS-Link” interface engine (IE). Cerner then created an “Integration Products Group” to market this IE as part of their Open Clinical Foundation (OCF) family.

– Cerner Alliance Program – back in 1994 while they were still primarily clinical systems, Cerner struck a deal with SDK in Boston (later acquired by Eclipsys), Medic from NC and Amisys in MD to add administrative and financial systems to its suite.

– Clairvia in 2011, a purveyor of workforce management and cloud-based predictive algorithms, with over 400 clients.

Other Deals• ADAC – acquired in November of 2000 expanded Cerner’s

Radiology offering, adding the imaging system QuadRIS to RadNet• DHT – in December, 2001, Cerner acquired Dynamic Healthcare

Technologies from Lake Mary, FL. DHT was best known for its “CoPath” Anatomic Pathology system, and also offered the “RadPlus” RIS and “Premier System LIS,” running in over 600 sites.

• Zynx Health Inc. – a subsidiary of Cedars-Sinai Medical Center was acquired in May, 2002, for its knowledge and best practice solutions that were considered the industry standard. For a while: Cerner divested itself of Zynx in 2004…

• VitalWorks – in January, 2005, Cerner acquired this physician practice vendor, bringing 30,000 private physician clients along.

• Axya – what, you never heard of them? Have you been asleep?? Acquired in May 2005, Axya was a Paris-based specialist in hospital systems throughout France, Switzerland and Morocco.

Some Slip-Ups…• No one is perfect, and Cerner had a few downs with its many ups:– Re-name? – While Millennium’s name was evolving from

TableRock to V500, someone came up with the name “D3,” to reflect the directory layouts they were working with. It didn’t take long for some field people to point out to the marketers back in KC that that term stood for decubitus, aka bedsores…

- Profit? – In 1996 Cerner finally ended its “alliance” program with SDK & Co., and released its own patient accounting system called “ProFit,” a creative name but a not-so-hot product. In this IT industry, what vendor does not have a dog (or two) in their portfolio? The name has since been changed to “Revenue Cycle Solutions” – much better, huh?

A Minor Gap?

• About the only application area where Cerner did not write a system is in ERP (“General Financials” for we oldsters…). Is this a drawback? Let’s have some fun and test your knowledge of the industry: which of today’s 13 leading vendors (listed by order of their 2012 annual revenue) offers an integrated ERP suite, i.e., written by them, rather than interfaced with a partner vendor:____ McKesson ____ Cerner ____ Siemens ____ Epic ____ Allscripts ____ GE ____ Meditech

____ NextGen ____ CPSI ____ HMS ____ NTT (Keane) ____ Harris (QuadraMed)____ Healthland

Next Week• Stay tuned for the answer to the ERP question next week, as well

as the final episode on Cerner covering their C-Suite evolution and amazing climb in terms of annual revenue, # of employees (“associates” in KC parlance), international expansion, clients, etc.

• After Cerner, we’ll wrap-up the HIS-tory of today’s vendors with the #1 on everyone’ annual revenue chart: McKesson, who’s $3B+ started way back in 1974 when three HIS-tory heroes left McAuto to form HBO:- Walter Huff, Bruce Barrington,

and Richard Owens• If anyone knows their email address or

phone #, please call or write me at: vciotti@hispros.com, 505/466-4958