This document provides an overview of Cerner's history from its beginnings in 1979 developing lab information systems to its current position as a leading provider of healthcare IT systems. It discusses Cerner's development of its Health Network Architecture (HNA) in the 1990s which expanded its offerings beyond labs into a full hospital information system. Key acquisitions and partnerships that helped grow Cerner's product portfolio are also summarized. The document concludes by teasing the story of McKesson's history which will be covered in the next episode.

1. H.I.S.-
tory,
by Vince Ciotti
© 2013 by H.I.S. Professionals, LLC, all rights reserved.
Episode #108:
Cerner
Part 5: HNA

2. Wonderful Book
• I must give credit for much of
the story of Cerner so far to
an amazing book (front cover
on the first slide, back cover
here) commissioned by Neal
& Co. to be written by Jeffrey
Rodengren circa 2006.
• Thanks again to April Martin
at Cerner who steered me to
this copy I found on eBay for
an obscene price, but it’s the
only case in HIS-tory where a
vendors’ founders cared
enough about their legacy to
have it professionally
documented – kudos!

3. “TableRock” Project in 1994
• And just what’s a “TableRock?” The
codename comes from a series of “table”
meetings that Neal Patterson chronicled in
an internal memo wherein he, Cliff and Paul
made a series of big decisions that guided
Cerner beyond LIS and into the HIS industry.
• It started out as a “client/server” version
of the Health Network Architecture (HNA)
that Cerner originally used to build its LIS
out into all of the various lab modules
beyond the LIS core: AP, Micro, etc.
• Cerner’s original hardware platform was
Dec VAX minis, which were the leading
mini platform for LIS systems, as shown in
this table from Dorenfest’s 1988 Guide.

4. Bold Vision
• In what must have seemed a daring vision back in the mid-90s,
Neal & Co. announced their “TableRock” project at Cerner’s 1994
users’ conference, that would entail many advanced capabilities:
– Support “community-based” delivery models (early IDNs)
– International requirements (PathNet ran in Canada since ‘85)
– Leverage desktop computing (PCs were just hitting their stride)
• The application side of this new TableRock vision,
which was later renamed HNA V500, included the
same series of applications and modules that
enabled HBO and Meditech to grow their HIS:
- Nursing Doc, Orders Entry & Results Reporting
- Census, ADT, MPI & OP Registration/scheduling
- Pharmacy, Radiology & other niche ancillaries
• As shown on the right, HNA sold well, eclipsing lab
revenue for Cerner by the end of the decade:

5. Amazing Growth
• The time-line below shows the evolution of Cerner’s product line
from its LIS beginnings in 1979 to today’s HIS, all self-developed.
Only Meditech, CPSI & Epic also built, rather than bought an HIS.

6. Acquisitions
• Even though the bulk of its Millennium HNA product line was self-
developed, with its enormous revenue growth and successful
public offering, Cerner used the capital to acquire other vendors:
• Citation – in May of 2000 was a
potential game-changer as Citation
ruled the small hospital LIS market
with over 300 sites on its C-LAB
product, just like PathNet did in the
large LIS market. Founded in 1979,
Citation rode the micro revolution with
its PC-based system selling well both in
the US and overseas: Canada, Latin
America & Asia. In the event, the
revenue potential was too small, and
Cerner instead offered remote hosting
over C-LAB’s PCs on a Novell LAN.

7. Mini and Mega Deals
• Other acquisitions & deals Cerner made over the years include:
– Megasource - In November, 1993 Cerner acquired this
Pharmacy niche player from Michigan for $6.7 million. Like
Citation, Megasource was big in the small hospital market with
its IBM PC-based “MS-Meds” product, interfaced to “foreign”
HIS systems via their “MS-Link” interface engine (IE). Cerner
then created an “Integration Products Group” to market this IE
as part of their Open Clinical Foundation (OCF) family.
– Cerner Alliance Program – back in 1994 while they were still
primarily clinical systems, Cerner struck a deal with SDK in
Boston (later acquired by Eclipsys), Medic from NC and Amisys
in MD to add administrative and financial systems to its suite.
– Clairvia in 2011, a purveyor of workforce management and
cloud-based predictive algorithms, with over 400 clients.

8. Other Deals
• ADAC – acquired in November of 2000 expanded Cerner’s
Radiology offering, adding the imaging system QuadRIS to RadNet
• DHT – in December, 2001, Cerner acquired Dynamic Healthcare
Technologies from Lake Mary, FL. DHT was best known for its
“CoPath” Anatomic Pathology system, and also offered the
“RadPlus” RIS and “Premier System LIS,” running in over 600 sites.
• Zynx Health Inc. – a subsidiary of Cedars-Sinai Medical Center was
acquired in May, 2002, for its knowledge and best practice
solutions that were considered the industry standard. For a while:
Cerner divested itself of Zynx in 2004…
• VitalWorks – in January, 2005, Cerner acquired this physician
practice vendor, bringing 30,000 private physician clients along.
• Axya – what, you never heard of them? Have you been asleep??
Acquired in May 2005, Axya was a Paris-based specialist in
hospital systems throughout France, Switzerland and Morocco.

9. Some Slip-Ups…
• No one is perfect, and Cerner had a few downs with its many ups:
– Re-name? – While Millennium’s name was evolving from
TableRock to V500, someone came up with the name “D3,” to
reflect the directory layouts they were working with. It didn’t
take long for some field people to point out to the marketers
back in KC that that term stood for decubitus, aka bedsores…
- Profit? – In 1996 Cerner finally ended its
“alliance” program with SDK & Co., and
released its own patient accounting
system called “ProFit,” a creative name
but a not-so-hot product. In this IT
industry, what vendor does not have a
dog (or two) in their portfolio? The name
has since been changed to “Revenue
Cycle Solutions” – much better, huh?

10. A Minor Gap?
• About the only application area where Cerner did not write a
system is in ERP (“General Financials” for we oldsters…). Is this a
drawback? Let’s have some fun and test your knowledge of the
industry: which of today’s 13 leading vendors (listed by order of
their 2012 annual revenue) offers an integrated ERP suite, i.e.,
written by them, rather than interfaced with a partner vendor:
____ McKesson
____ Cerner
____ Siemens
____ Epic
____ Allscripts
____ GE
____ Meditech
____ NextGen
____ CPSI
____ HMS
____ NTT (Keane)
____ Harris (QuadraMed)
____ Healthland

11. Next Week
• Stay tuned for the answer to the ERP question next week, as well
as the final episode on Cerner covering their C-Suite evolution
and amazing climb in terms of annual revenue, # of employees
(“associates” in KC parlance), international expansion, clients, etc.
• After Cerner, we’ll wrap-up the HIS-
tory of today’s vendors with the #1
on everyone’ annual revenue chart:
McKesson, who’s $3B+ started way
back in 1974 when three HIS-tory
heroes left McAuto to form HBO:
- Walter Huff, Bruce Barrington,
and Richard Owens
• If anyone knows their email address or
phone #, please call or write me at:
vciotti@hispros.com, 505/466-4958