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July 14, 2018 01:00 AM

Cerner's investment in Lumeris signals growing role of tech vendors in population health

Rachel Z. Arndt
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    With a $266 million investment in Lumeris' parent company, Cerner Corp. is just one of many electronic health record vendors making inroads into population health and preparing for the move to value-based care.

    Because of that shift, EHR vendors see the strategic importance of having population health tools in their portfolios so they can help health systems manage populations—and so they can do that alongside their existing platforms, smoothing out what can sometimes be clunky workflows.

    “Population health is now becoming a driving force,” said Dr. Charles Saunders, CEO of software firm Integra Connect. “It's time for the EHR vendors to recognize that they need to serve the needs of health system customers with these solutions.”

    Cerner already has population health software—HealtheIntent, which Lumeris will use—but last week, it upped its involvement in the area with an investment in Essence Group Holdings, the parent company of health IT vendor and managed services provider Lumeris.

    Cerner will partner with Lumeris for 10 years to develop software, called Maestro Advantage, aimed at provider-sponsored health plans and Medicare Advantage plans.

    “What we were looking for is a partner that would allow us to take this model and scale it across the country,” said Lumeris Chief Medical Officer Dr. Debbie Zimmerman. “Cerner is deeply embedded in many health systems, and provider systems are where this change to value has to take place.”

    Because Cerner is first and foremost an EHR vendor, it could have an advantage over existing population health software makers, since their tools can be tougher to integrate into EHRs, said Michael Burger, senior consultant at Point of Care Partners.

    “There's no shortage of companies that have the data-mining and analytics capabilities,” Burger said. “Where the marketplace stumbles is with those things that are delivered outside the EHR workflow.” That's one reason EHR vendors are looking to add capabilities.

    Providers themselves are asking for EHR vendors to get involved, said Bradley Hunter, research director for population health at research firm KLAS. “Now that you have all this data digitized, population health is: What do you do with all of it?”

    Some vendors offer population health modules that only work with their own EHR. Cerner and Lumeris executives say their new tool will work with any EHR, which is key for adoption, Saunders said.

    “The challenge that any enterprise EHR vendor has is for these solutions to be truly embraced, they have to be EHR-agnostic, because you have a wide variety of providers that take care of a population, and they're not all going to be on Cerner's EHR,” he said.

    That will be helpful for providers, too. “An integrated health IT offering can give health systems an edge over competitors who are spending money on cobbling together solutions,” said Michael Abrams, managing partner at consulting firm Numerof & 
Associates.

    Ultimately, it might be tough for Cerner and Lumeris to maintain a partner relationship. Instead, Cerner might opt for an acquisition, Burger said.

    “I doubt Lumeris will be independent for long,” he said. “If I had to take out my crystal ball, I'd say this is more likely to be a try-before-you-buy type of thing.”

    Indeed, it's increasingly common for EHR vendors to snap up other, more niche health software companies rather than build the software themselves (with the notable exception of Epic Systems, which tends to build software itself).

    “The EHR vendors who are good at building EHRs aren't necessarily good at building population health,” Burger said. So it makes sense that, when Cerner noticed a gap in its portfolio, it chose to partner with someone.

    “This deal is likely to be one of a broader range of mergers and acquisitions across the industry intended to re-invent patchwork best-of-breed architectures into integrated platforms,” Abrams said.

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