Analyst Note| Dylan Finley, CFA |
Narrow-moat Cerner reported solid second-quarter results and provided insight into the short- and long-term revenue impact resulting from the Department of Veterans Affairs' strategic review of its electronic health record modernization program. As a reminder, it was announced in March 2021 that the VA would temporarily pause the $16 billion rollout of its EHR modernization project with Cerner, expected to be completed by 2028, while a review is launched into the program. The VA inspector general has noted several issues with implementation thus far--partially as a result of the agency's preparedness--resulting in higher costs, delays, and frustration among clinicians. Last week, the VA published a comprehensive report finding implementation issues were related to user training and governance, rather than technology issues with Cerner's EHR. The department announced it would continue to pause the EHR implementation program through the remainder of 2021 and would work closely with Cerner to ensure readiness at future sites beginning in 2022.