Healthcare Business News

Georgia Regents system taps Cerner for IT outsourcing contract

By Bob Herman
Posted: August 29, 2014 - 1:00 pm ET

Georgia Regents Health System in Augusta and health technology giant Cerner Corp. have signed a 14-year, $400 million agreement in which Cerner will take over the health system's information technology services.

GR Health's 120 IT staff members will become Cerner employees on Sept. 29, a different approach than a traditional electronic health-record contract-for-service arrangement.

Additionally, Cerner will partner with technology firm Philips Healthcare, an Andover, Mass.-based unit of Dutch conglomerate Philips, to find ways to integrate and interpret patient data. GR Health started working with Philips last year by shifting its biomedical equipment to the Philips brand.

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“Cerner was very intrigued by that partnership,” said Charlie Enicks, GR Health's chief information officer. The groups have not yet defined how they will work together.

Over the life of the contract, GR Health expects to save $70 million compared to what keeping EHR functions in-house would have cost. Part of those savings, roughly $10 million, will come from hosting its data remotely at Cerner's Kansas City, Mo., headquarters. GR Health will also reduce employee salary obligations under the deal, although it would not elaborate on what financial effect that will have.

By freeing up capital, the agreement will allow GR Health to speed up its schedule for other projects, such as investing in new technology for its anesthesiology and oncology departments.

“We'll be able to get more done and spend less money doing it,” Enicks said. “That's really the business driver.”

GR Health, a public system that includes Georgia Regents Medical Center and Children's Hospital of Georgia, is affiliated with the Medical College of Georgia. It's been a Cerner client for the past 12 years. Publicly traded Cerner is the process of acquiring Siemens' health IT business for $1.3 billion, potentially creating a combined company with $4.5 billion in annual revenue.

Follow Bob Herman on Twitter: @MHbherman

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