The ‘Other’ Reasons Cerner Won

The Monday morning quarterbacks have been quite busy since the Department of Defense announced its selection of the Cerner/Leidos/Accenture team to deploy the military’s EHR solution. The Epic/IBM team had been considered the favorite, leading many in the healthcare IT world to speculate what factors led to Cerner’s somewhat surprising win.

The most popular theory is tied to concerns over interoperability. Rightly or wrongly, Epic has a reputation for failing to interoperate with other EHR platforms. In the months leading up to the DoD’s final selection, Epic had hired lobbyists to try to improve its interoperability image. Still, Epic is largely viewed as a vendor that doesn’t play nicely with others. Epic’s refusal to join the CommonWell Health Alliance has further fueled those concerns.

While interoperability was likely a consideration, here are a few other factors that no doubt came into play and gave the edge to the Cerner team:

  • Leidos. The contract was awarded to Leidos – Cerner was just one of dozens of subcontractors. Leidos, while working under the SAIC name, has had years of experience as a defense contractor, and currently provides support services for the military’s existing AHLTA EMR system. Leidos thus had the connections, as well as the expertise required to win the massive contract.
  • Cost. Speculation is that the Leidos/Cerner option was less expensive than the Epic/IBM package, especially since Epic tends to be the priciest solution in the private sector. If only for the sake of public opinion, the Defense Department probably doesn’t mind saving a billion or two every now and then.
  • Experience. While Epic may be healthcare IT’s current darling, they didn’t emerge as a dominant player until 2003 when Kaiser Permanente selected Epic over Cerner and IBM for their 36 hospital implementation. At that time Epic had about 600 employees compared to its current staff of 8,000. Cerner is far more experienced in the large system space, having had success in that segment since the 1980s. Today Cerner is the largest independent health IT company in the world.
  • Sales expertise. Unlike most all of its competitors, Epic spends very little on marketing and sales efforts – because they traditionally haven’t had to. As one CIO told me recently, Epic expects to win every deal they are in, based on the strength of their offering. That may play well in the private sector but huge government contracts are a different beast. Cerner, though, has a solid reputation in the sales and marketing realm and can boast having a team that is both experienced and professional. They also understand the government contracting process, having been suppliers of products and services to the U.S. and foreign governments for a couple of decades.

Monday morning quarterbacking is always fun but the “real” game is about to start. The next several years will surely provide plenty of opportunities for health IT color commentators to provide their analysis of all the successes and missteps along the way.

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Michelle Ronan Noteboom

Michelle Ronan Noteboom specializes in healthcare IT communications, marketing, and strategy. She spent seven years as an independent contributor for HIStalk and HIStalk Practice writing under the name “Inga” and as a freelance writer for various publications and health IT vendors. Michelle previously spent 22 years in healthcare sales IT working for Misys Healthcare Systems.

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  • John

    While it’s true that Epic doesn’t really spend money on a marketing department, they spend a ton of money on sales. It’s not fair to say that they don’t spend money on sales. Look at their KLAS contract alone (which is sales and marketing) and tell me they don’t spend millions on marketing. Plus, no hospital has ever bought an EHR without a salesperson doing the necessary. In fact, I’ve heard Judy talk about flying out their for the sales process. I think the reality is that Epic was outsold by Cerner. Or as you suggest Leidos outsold IBM.

    I agree with all the Monday Morning quarterbacking though. They try to simplify it down to one reason which I hate. It’s never that simple even if it makes for a great blog post.

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