Cerner Corp. revenue was below its projections for the second quarter of 2020, but overall earnings were better than expected due to expense control and strong bookings despite the COVID-19 pandemic.
In a second-quarter earnings calls, Cerner's executives noted that the decrease in revenue was due, in part, to the termination of the company's Revworks division's outsourcing agreement, and Revworks' recent sale to R1 RCM Inc. is estimated to decrease the company's revenue even further in the third and fourth quarters of 2020.
However, Cerner's chief client and services officer John Peterzalek said the divestiture would ultimately benefit Cerner's clients and the company.
"This puts our clients in good hands from a revenue cycle services standpoint, while allowing Cerner to focus on the continued advancement of our solutions," said Peterzalek, noting that the companies are also working together on an integrated offering.
Partnerships were a key theme of the earnings call in which executives of the healthcare technology company cited key bookings, partnerships and acquisitions throughout the quarter that they hope will help the company grow in the long run.
Cerner executives highlighted the company's relationship with the U.S. Department of Veterans Affairs and the U.S. Department of Defense. Peterzalek said both organizations are expected to go live with the company's CommonWell Health Alliance platform later this year, which will add 15,000 providers to the network. The platform allows providers to identify patients as they transfer through hospitals and to locate electronic health records.
The North Kansas City, MO.-based company also expanded its partnership with Banner Health earlier this month, and the healthcare organization is now using Cerner's revenue cycle management services across its systems in six states.
Cerner President Donald Trigg also cited strong partnerships as reasons why the company's consumer business saw a good second quarter.
"Key partnerships with industry leaders, such as our telehealth efforts with Amwell, provider matching with Kyruus Inc., and self-monitoring with GetWell Loop all have solid momentum within our unified consumer framework," Trigg said.
Regarding Cerner's future, Trigg pointed to the company's data business, including its release of information business, which is on a path to growing over 100% off a small base.
"We've always understood that today's future is tomorrow's present and that the best way to predict the future is to lead it. Some contend the solutions to the clients' needs [from a previous conversation] will come from big tech. Others argue Silicon Valley startups will bring the next wave of change. However, I would argue that none of them have our depth of knowledge of health care and IT. None of them have the same ability to impact the last-mile provider workflow, and none of them have our combination of entrepreneurial scale," Trigg said.
