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Cerner chief: DoD contract was historic win

Cerner Corp. scoring the DoD contract last week means the company's product passed the most comprehensive technology evaluation ever, the president of Cerner said.

In the eyes of Zane Burke, president of Cerner Corp., his company didn't just beat out Epic Systems Corp. -- Cerner's archrival in the EHR market -- to win a massive U.S. Department of Defense (DoD) contract. Cerner also won "the most objective and comprehensive evaluation of technology platforms and solutions ever conducted," Burke said during the company's second-quarter earnings call on Tuesday.

Last week, news broke that Cerner won the $4.3 billion DoD EHR contract for the federal agency's Healthcare Management System Modernization project in partnership with Leidos Inc., Accenture, Henry Schein Inc. and a number of small business partners.

Intermountain Healthcare -- a Cerner customer -- is also a partner and will provide clinical governance of software and workflow, Burke added.

Burke's comments were the first from Cerner about the contract since the DoD's announcement.

Global reach of DoD contract

Burke said Cerner stands ready to install its EHR systems in dozens of military hospitals.

"We now have the opportunity for Cerner's suite of integrated solutions to replace the DoD's legacy health IT system in its 55 hospitals and more than 350 clinics worldwide, as well as in ships, submarines and other locations in the theater of military operations," Burke said. Cerner will ultimately serve the DoD's 9.6 million beneficiaries.

The 10-year contract consists of a two-year initial ordering period, a pair of three-year option periods and another two-year option period.

Burke also cleared up confusion surrounding the value of the contract and the costs of the program: "As noted in the DoD's press release, this estimate is now approximately $9 billion and represents the total estimated program costs over 18 years, not the value of the contract awarded."

Cerner fit in better with the feds

Analysts told SearchHealthIT last week that while Cerner's victory over Epic in the contract bid was surprising, in the end, Cerner was a better bid for the DoD.

Cerner offered several factors that Epic couldn't match, such as a reputation for greater interoperability of its EHR systems, a more mainstream corporate culture, and overall greater experience from its bid partners, the analysts said.

Winning the contract will likely shift Cerner ahead in the battle for the No. 1 EHR vendor in the country, a position Epic currently enjoys.

Tell us what you think Cerner's win means for the overall EHR market. Email Kristen Lee, news writer, or find her on Twitter @Kristen_Lee_34.

Next Steps

Read more about Cerner:

Cerner CEO on his wife's interoperability dilemma

Carl Dvorak: Due to Cerner-Siemens deal, Epic is the "underdog"

Big story to watch in 2015: Cerner-Siemens merger

Dig Deeper on Electronic health record (EHR) vendor selection

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