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CERN to Manage Major Health Center

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Leading healthcare information technology solutions provider, Cerner Corporation (CERN) recently reported that Children's Mercy Hospitals and Clinics will open an on-site health and wellness center for over 6,000 staff and their spouses later this year. The Children's Mercy Employee Wellness Center will provide urgent and primary health care besides pharmacy and laboratory services. Cerner, which at present runs over 30 such on-site health centers, will manage the operations of the center.

The wellness and health center will function as a medical home for users. For example, there will not be any waiting rooms. Staff will have online access for matters such as scheduling an appointment or accessing health data. Finally, the center will adopt a whole health approach, which means that the doctors will keep in mind the overall wellness of each employee.

Kansas City, Mo.-based Children’s Mercy Hospitals and Clinics is a front runner in providing health care to employees. The organization is one of the finest pediatric medical facilities in the country. It has 600 pediatricians involved in research, clinical care and education of upcoming pediatric specialists. 

Cerner remains the trend setter among pure-play, publicly traded healthcare information technology vendors. CERN is diversified not only on a global basis but serves both hospitals and ambulatory outfits. Its integrated solutions have captured market share. While fresh opportunities are shrinking, the replacement market is growing.

We believe that long-term investors may consider Cerner, which serves a sizeable installed inpatient base that requires composite clinically oriented applications complying with “meaningful use” requirements, reimbursement problems and complicated coding issues. Cerner has long-standing, integrated and seamless solutions for both inpatient and ambulatory settings.

On the negative side, the federal Stimulus program is gradually winding down. Cerner faces stiff competition from established HCIT players, such as Athenahealth, Inc. (ATHN).

Cerner offerings are used by about 10,000 health care entities worldwide. Its services are utilized by over 45,000 doctors, 2,700 hospitals and 4,150 physician practices.

We currently have a Zacks Rank #3 (Hold) on Cerner. However, we are more positive about other stocks such as Merge Healthcare Incorporated (MRGE) and Omnicell Inc. (OMCL) both of which carry a Zacks Rank #2 (Buy) and are expected to do well. 

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