In a shareholder meeting on Wednesday, Cerner Corporation officials reported that Cerner and Epic both hold about 24% of the acute EHR market. Cerner pointed to a “highly active replacement market” with about 2,400 sites on legacy or acquired platforms that could be looking for a change of system.
The health IT company won contract decisions involving 109 acute care hospitals in 2016, while Epic picked up 91 hospital contracts. Excluding existing customer add-ons, the gap shrunk to 69-66, according to Cerner.
Cerner said during the meeting that the company picked up more than double the number of contracts of popular vendors other than Epic, including athenahealth and MEDITECH Web.
Several EHR companies have been looking downmarket for potential expansion opportunities and Cerner looks to be continuing that strategy. It seems to be working, as a KLAS Research report earlier this month found that most small hospitals chose Cerner CommunityWorks because of its “broad scope of functionality and integration." That report found that Cerner had about a quarter of EHR purchases last year among hospitals with 200 or fewer beds.
Some small and rural hospitals, however, are skeptical that companies like Epic and Cerner can truly accommodate their needs. Frank Beaman, CEO of Faith Community Hospital in Jacksboro, TX, recently told Healthcare Dive his hospital went with a cloud-based system from athenahealth for a variety of reasons, including bad experience with other models.
“All of the issues we ever had with either not having access or having any kind of security concern took place with [legacy model] systems in our building," he said.
In other Cerner news, the company announced that its board of directors approved a stock repurchase program on Tuesday that authorizes the purchase of up to $500 million of its common stock. The purchase will be made using working capital, according to the company.
Marc Naughton, executive vice president and CFO of Cerner, said the company is “well positioned for long-term growth,” and added that the stock repurchase “reflects our confidence in delivering this growth.”
Naughton pointed specifically to a strong balance sheet and expected strong cash flow as the reasons for the company’s confidence.