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Cerner (CERN) Extends Partnership to Accelerate Digital Health

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Cerner Corporation recently extended its two-decade old partnership with Baystate Health through the introduction of a digital health platform, which combines care delivery and financing systems in order to create a more consumer-centric approach to patient care. On the back of this digital innovation, patients are likely to get better access to personalized care, while clinicians might get more clarity into patient pools and utilize data to boost effective disease management and virtual health experiences.

For investors’ note, Baystate Health is a not-for-profit integrated healthcare system catering to above 800,000 people across western Massachusetts. Five hospitals and above 80 medical practices with around 12,000 employees come within the ambit of Baystate Health – one of Massachusetts' largest employer.

Cerner is one of the largest pure-play healthcare information technology (HCIT) companies and its wide footprint, large reference-able client base and composite array of solutions make it an ideal candidate for investors seeking an exposure to the HCIT industry.

This expansion is likely to boost the company’s already robust HCIT presence.

Benefits of the Extended Partnership

As consumers become more involved in their healthcare, their demands for digital and virtual technologies have been on the rise.

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The expansion of this partnership is likely to result in an industry-defining collaboration that will deliver the products and technology platform required to accelerate these strategic goals.

The new digital health platform will bring together new applications and tools from Cerner and third-party developers under one unified view for better management by the health system.

Cerner is getting access to innovation and product development support from TechSpring — Baystate Health’s digital innovation team.

Market Prospects

Per a report by Grand View Research, the global healthcare IT market was worth $74.2 billion in 2020 and is projected to witness a CAGR of 10.7% during the forecast period (2021-2028). Growing demand and adoption of preventive care together with rising funding for various mobile health startups are driving the market growth. Hence, this expansion comes at an opportune time for Cerner.

Notable Development

In April, Cerner finalized the buyout of Kantar Health (in Dec 2020 the company inked a deal to acquire Kantar Health — a division of Kantar Group) for $375 million in cash, which is subject to adjustment. The buyout will enable Cerner’s Learning Health Network client group to engage with life sciences for funded research studies in a more direct manner.

Price Performance

Shares of the Zacks Rank #3 (Hold) company have gained 7.4% in a year’s time, against the industry’s fall of 8.3%.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , Envista Holdings Corporation (NVST - Free Report) and Align Technology, Inc. (ALGN - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Henry Schein’s long-term earnings growth rate is estimated at 11.2%.

Envista Holdings’ long-term earnings growth rate is estimated at 26.4%.

Align Technology’s long-term earnings growth rate is projected at 23.2%.

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