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Cerner and naviHealth Extend Partnership, Boost EHR Service

Zacks Equity Research

In a bid to strengthen its position in the growing field of post-acute care management, Cerner Corporation CERN recently extended its existing relationship with naviHealth. This latest alliance is aimed at developing a new offering for Medicare’s Bundled Payments for Care Improvement Advanced program (BPCI Advanced).

The new service will lend healthcare providers an opportunity to participate actively in the BPCI Advanced program. This value-based care electronic health record-agnostic (EHR) solution is anticipated to aid and benefit health care providers by facilitating a cost-effective and an accessible health care, solely focusing on the patient.

A Few Details About BPCI Advanced

A new voluntary episode payment model — Bundled Payments for Care Improvement Advanced — announced by The Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation will test a new iteration of the bundled payments for 32 Clinical Episodes. The main objective of this program is to properly arrange incentives among the participating health care providers that will lower expenditures while enhancing the quality of care for Medicare beneficiaries and reducing waste for the health systems as well as providers.

Under this program, participants can receive an additional payment if all the costs for an episode of care are less than a benchmark price, discounted by 3%. If they cross the benchmark, the providers would have to repay up to 20% of the excessive costs to Medicare.

Cerner and naviHealth Partnership at a Glance

Over the last five years, the two companies have been working toward simplifying electronic workflows for post-acute discharge. Earlier this year, Cerner launched a new operating model that is believed to be a breakthrough in terms of innovation, which will shape health care in the future.

With this recent collaboration, these two leading entities will jointly acknowledge a particular area of health care that has ample scope for improvement, modernization, reimbursement models and the required shift to a value-based care.

Notably, Cerner and naviHealth hope to unveil this offering with the initial focus on the next CMS introduction of the program in January 2020.

The new partnership is likely to prove beneficial in terms of achieving better health experiences and outcomes plus also enhance the success of both companies’ respective clients. Moreover, the combination of the two companies’ operational, technological and clinical experience and solutions with Cerner’s big data platform will help make this joint offering extremely unique in this space.

EHR Gaining Popularity in Healthcare

The latest trend of EHR services in the U.S. MedTech space has been gaining prominence. In this regard, it is imperative to mention that Cerner has been dominating the headlines, courtesy of efforts to digitize EHR systems.

Per Transparency Market Research, the global EHR market is estimated to reach $38.29 billion by 2025 at a CAGR of 5.7%. Reports suggest that MedTech companies with a strong exposure to big data automated EHRs will excel in terms of operations and margins. Increased uptake of EHR, rise in the usage of cloud-based EHR software, a rapid surge in the aging population and the substantial rise in chronic disease cases are expected to boost EHR market growth.

Another Player Adopting EHR

Recently, Computer Programs and Systems, Inc.’s CPSI wholly owned subsidiary, Evident LLC, announced that Jasper General Hospital has selected its cloud-based Thrive Electronic Health Record (EHR) solution for its hospital and clinic along with the TruBridge revenue cycle products and services. This fortifies Computer Programs’ foothold in the global Healthcare IT (HCIT) market.

Zacks Rank and Share Price Movement

Currently, Cerner has a Zacks Rank #2 (Buy).

Year to date, shares of the company have underperformed its industry. The stock has rallied 19.8% compared with the industry’s growth of 20.2%. However, the current level is higher than the S&P 500 Index’s 15.4% increase.



Other Key Picks

Investors interested in other stocks worth considering from the broader medical space can also consider The Cooper Companies, Inc. COO and Invacare Corporation IVC, both carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cooper Companies has a long-term earnings growth rate of 10.8%.

Invacare Corporation has an earnings growth rate of 29.3% for the next quarter.

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