Cerner to buy private physician system supplier

The $100m deal will further expand Cerner’s presence in the physician practice market, a market expected to rapidly grow as the US federal government continues its push to bring medical information to the point of care. 

VitalWorks’ Medical Division serves nearly 3,500 private physician offices and hospital clients with solutions for practice management, ambulatory electronic medical records, transaction processing and emergency departments.  Following the sale of its medical Division VitalWorks says that it plans to focus on the Picture Archiving, Communications and Storage (PACS) and electronic diagnostic imaging markets.

“This acquisition will build on our already substantial hospital-affiliated physician client base, giving us additional reach across the entire spectrum of the physician practice market,” said Neal Patterson, Cerner’s chairman and chief executive officer

Cerner says that it has an estimated 100,000 physicians using its solutions to manage their patients in hospitals, clinics and physician offices. This acquisition of Vitalworks Medical Division will bring nearly 30,000 additional physicians to Cerner, raising the total number of estimated physicians reached by Cerner to nearly 130,000.

“Cerner believes physicians want a common method of caring for patients, regardless of whether it is in their office, a clinic, or a hospital,” said Patterson. “We are excited about how VitalWorks’ Medical Division’s client base will expand Cerner’s reach in the broader physician practice market."

According to Forrester Research, the market for physician office practice management and clinical systems was $1.7 billion in 2003.  It is estimated the untapped market for such technology in the ambulatory market is as high as $4 billion.

The US Government has launched a series of initiatives to create a national architecture for health information systems.  It is intended that this will consist of a series of interconnected regional health information networks that electronically link the nation’s healthcare using computerized medical records. 

 “For years, our team has been committed to delivering reliable technology and the highest levels of service to physician practices of all sizes,” said Daren McCormick, VitalWorks’ Medical Division vice president and general manager. “We’re very excited to now become an integral part of Cerner’s complete physician offering."

 “With Washington squarely focused on the physician practice space and with President Bush’s call to action for each American to have a personal health record within ten years, we believe there is a significant opportunity to make our vision of establishing a new medium between the physician and the person a vital reality,” Patterson said.

Cerner’s CEO added that the company believed it would also benefit from its experience in the UK, where it is supplying its Millenium platform to create the national electronic appointment booking system. Choose and Book will coordinate the scheduling of general practitioners and medical specialists appointments for a population of more than 50 million.  

Although successful as a contractor in providing the platform for Choose and Book, Cerner was unsuccessful in its bids to become a prime contractor or clinical systems supplier for the main NHS Care Records Service in the five regions of the English NHS National Programme for IT.