Cerner expands federal investment with acquisition of VA software consultant AbleVets

By | October 21, 2019

Dive Brief:

  • Cerner, one of the biggest distributor of EHR systems, is acquiring IT consulting firm AbleVets for an undisclosed sum.
  • AbleVets, which specializes in cyber, cloud and system development for mostly federal clients, played a central role in expanding a controversial initiative to link veterans to private healthcare services despite apparently poor planning by the U.S. Department of Veteran Affairs.
  • Cerner, part of the team providing electronic health records to the Department of Defense under a $ 5.5 billion contract, expects to complete the transaction in the fourth quarter.

Dive Insight:

Cerner, the Missouri-based IT giant under fire for its difficulties in creating an EHR system for the VA, is apparently extending its reach further into federal contracting with its acquisition of AbleVets on Friday.

Based in Virginia and with about 350 employees, AbleVets has been developing software that determines whether specific VA enrollees are able to access healthcare services from private providers. According to a recent report from ProPublica, the company was tasked with culling and interfacing data from six different IT systems. However, the VA has been criticized for poor execution and planning of the overall project.

“By combining AbleVets’ strategic and technical expertise in the federal space with Cerner’s global scale, technology and innovation, we can expand our collective reach, accelerate developments and make the greatest impact on improving outcomes across the care continuum,” AbleVets CEO Wyatt Smith, a retired Navy oncologist, said in a statement.

Virginia-based AbleVets is one of the fastest-growing businesses in the Washington, D.C.-area, according to the Washington Business Journal.

Cerner itself has come under fire for its revamp of the VA’s EHR system. The awarding of the multi-billion dollar project has been criticized in some quarters for lack of competitive bidding. And the system’s go-live date of March 2020 at three VA medical centers was recently pushed back seven more months.

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Cerner has also been reporting lackluster earnings as of late, suggesting it needs some transactions to boost its future earnings. Cerner’s second-quarter net income beat estimates, but its revenue came in below expectations. Bookings for new business were also down 20% year over year. Cerner recently said it was investing more than $ 200 million on 165 separate initiatives to streamline business processes following years of outsized expenses that were putting a damper on returns from operations.

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