- David Feinberg, formerly CEO of Geisinger and currently head of Google Health, will become health IT giant Cerner's chief executive and president starting in October, the company announced Thursday.
- The appointment ends a search the Kansas City, Missouri-based Cerner began in early May. Feinberg, 59, will succeed Brent Shafer, who was Cerner's chairman and CEO for three years.
- At the time, Cerner said Shafer would continue to serve as a senior adviser for one year to smooth the transition. The EHR vendor is splitting the role of chairman and CEO: While Feinberg will also be on the board of directors, the chairman role is going to existing board member William Zollars, previously president and CEO of YRC Freight.
The announcement is the latest shakeup for Cerner's C-suite, which has already undergone some major changes this year with the start of new Chief Client and Services Officer Travis Dalton in January and new CFO Mark Erceg in February. The personnel moves come as the vendor reorients its operational priorities to become more of a software-as-a-service business, with less of a focus on legacy EHR systems.
Cerner's goal is to eventually create a $1 billion data business, an objective that involves a cloud partnership with Amazon Web Services, a competitor of Google's cloud business that's also been active in healthcare.
The restructuring comes roughly two years into Cerner's bid to streamline operations, as unwieldy expenses, including costly operating problems, weighed on the company beginning in 2017. Over the past few years, Cerner has brought in outside consultants and overhauled its board of directors, even launching more than 100 cost-cutting and portfolio management efforts to improve its operating margin.
Now, Zollars, who has been on Cerner's board since 2005, will take the chairman role in October, when Feinberg joins the company. Cerner's current president, Donald Trigg, will also leave the company at that time. Trigg has been at Cerner since 2002.
"Positively, the hire also indicates a shift towards a strategic CEO, which we view especially favorably in light of the company's prior comments around a preference for an operations-focused executive," SVB Leerink analyst Stephanie Davis wrote in a note on the announcement, though Davis stressed the loss of Trigg, who previously served as president of Cerner's venture business, is "meaningful" and disappointing given his experience in the private health tech landscape.
"Further, Dr. Feinberg is, as of yet, unproven in the public company spotlight, making this transition very much a show-me story," Davis said.
In a statement, Feinberg said he will help "continue to profitably grow the business."
But despite his 25-year career, Feinberg doesn't have a track record as CEO of a public company. Additionally, his experience lends itself more toward managing large health systems than IT platforms, which could result in a prolonged learning curve, according to the analyst.
Feinberg was most recently VP of Google Health, which "has not yielded a strong execution track record to date," Davis said. Feinberg was appointed to head Google's health business in 2019, after being president and CEO of Pennsylvania-based health system Geisinger for four years.
However, Feinberg does have eight years of combined CEO experience on the provider and health systems side, through his tenures at Geisinger and UCLA Health, where he was CEO from 2011 through 2015. And Feinberg is familiar with EHRs and the health system implementation process, as he oversaw the implementation of Cerner's data analytics platform at Geisinger beginning in 2016.
The executive was also reportedly one of the top picks in 2018 to lead Haven, the joint venture between Amazon, Berkshire Hathaway and J.P. Morgan Chase to lower healthcare costs for employers that flamed out after just three years.