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Comments about Cerner's Remote Hospital Option (RHO)

Posted Feb 09 2010 12:00am

Mr. HIStalk raised the issue of Cerner's remote hosting option (RHO) in a recent Q and A item (see: HIStalk):

Q: From FreddieMac: “Re: Cerner. In order to improve cash flow, the company is aggressively pursuing complete IT outsourcing deals (like MU) among its client hospitals through any any back door they can. Of course, they think RHO Millennium translates into knowing how to run all the other aspects of health IT. I believe they got Naples Community and are trying for some other academics. Beats the hell out of trying to compete with Epic for new sales.”

A: It’s a good strategy, I think, and I expect it will open some doors to hospitals who don’t consider data center operations to be core. Not to mention that, as you noted, Epic is taking most of the pie anyway.

Here a cut-and-paste from the Cerner web site about RHO:

The complexity of modern healthcare means that healthcare IT is equally complex. A hospital must provide an environment where users don’t worry about system security, uptime or availability....Cerner’s Remote Hosting Option is a key component of Cerner's Managed Service portfolio which address these technology challenges. RHO provides predictable, uninterrupted connectivity, and world-class system support. With a RHO Service Level Agreement, you get 7 by 24 by 365 support and guaranteed uptime. In addition, RHO client systems are housed within the Cerner Technology Center (CTC), a state-of-the-art facility specially designed for HCIT hosting. Today there are more than 200 clients using the CTC and they have the piece of mind of knowing that Cerner’s Technology Center is HIPAA-enabled and ISO 9001:2000-certified.

First of all, let me say that Cerner has been offering remote-hosting for at least ten years and well before Epic developed its current magic formula -- clients would pay top dollar for a relatively good EMR that was both installable and manageable. In fact, I believe that one of the reasons that Cerner got into the IT services and remote hosting business in the first place was because their software became too complicated to install and manage on a daily basis for many hospitals. In other words and for many hospitals, it Cerner wanted to sell it, they needed to install and manage it. This is not to say that such a service was not profitable for them.

It was also more than a decade ago that IBM discovered that the highest and most dependable revenue opportunity in IT was services rather than software or hardware development. This idea has credibility to this day. I strongly feel that digital pathology will evolve along these lines (see: Digital Pathology Offered as a Service Rather Than a Product). I have blogged previously about software-as-a-service (SaaS). And, of course, cloud computing is closely related to SaaS. Cloud computing was initially offered as remote data storage but is now evolving to a complete "computing platform" in the cloud. Recent news was that Microsoft is offering its Azure cloud computing platform free-of-charge to scientists in collaboration with the National Science Foundation. This, of course, is only a strategic move to compete more effectively with Google and Amazon.com in the cloud computing arena (see: Steve Ballmer on the Future of Computing: Three Screens and the Cloud).

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