There’s talk of an acquisition that just might change the landscape of the health IT market.
According to reports, Cerner may be exploring the possibility of acquiring the health IT division of Siemens Healthcare, which was among the EHR vendors that failed to increase marketshare in 2013.
EHR behemoth Cerner, however, with 14,200 employees worldwide, did manage to increase marketshare in 2013 and saw GAAP net earnings stand at $398.4 million, up from $397.2 million in 2012. The company’s 2013 bookings also reached a record high, at $3.77 billion, up 20 percent from 2012.
Siemens Healthcare, which includes four divisions — imaging and therapy systems; clinical products; diagnostics; and customer solutions — saw $2.8 billion in 2013 profits, up significantly from the year before. Officials say the increases were due to lower charges associated with its Agenda 2013 initiative, a two-year long project aimed at boosting the company’s competitiveness.
Siemens officials are aware of the acquisition speculations, but “as a matter of company policy, we cannot comment on market rumors,” said a Siemens spokesperson, in an emailed statement.
In its Q2 2014 interim report, Siemens officials, however, did indicate big changes were coming. “As of Oct. 1, 2014, the organization will be streamlined by eliminating the sector level and bundling business into nine divisions instead of the current 16. Healthcare will be separately managed in the future,” the report read.
A Siemens spokesperson said the slated change of the healthcare arm being managed as a “company within a company” will result in “greater entrepreneurial independence.”
Siemens Healthcare, which includes a health IT division known as “customer solutions,” currently employs some 52,000 people globally. Siemens’ entire workforce totals more than 108,000.
“The trend toward consolidation in the Sector’s (healthcare) industry continues,” officials wrote in the company’s 2013 financial report. “Competition among the leading companies in the field is strong, including with respect to price.”
A Cerner spokesperson also declined to comment on the talk of an acquisition.
Of all hospitals attesting to meaningful use, just slightly more than 10 percent of unique hospitals attested using a Cerner platform. Contrastingly, only about 4 percent of hospitals used a Siemens EHR to attest.
Regarding eligible professionals, only 12 unique eligible providers have used Siemens to attest, representing .004 percent of the market. Cerner, however, held approximately 3 percent of the marketshare with eligible providers, as some 9,700 unique eligible professionals attested to meaningful use with a Cerner platform (out of 293,000 EPs included in an HHS MU data set.)