IBM, Cerner to Unveil Marketing Agreement

IBM Corp. and Cerner Corp. are scheduled to announce Monday an alliance to jointly market their products, which will be integrated to complement each other, to hospitals.

Cerner makes clinical, financial and managerial software for health-care organizations. Armonk, N.Y-based IBM makes computers as well as server, storage and infrastructure software. The Kansas City, Mo.-based Cerner has annual sales of about $405 million and competes with industry giants such as San Francisco-based McKesson Corp. and Germany’s Siemens.

The agreement is nonexclusive, and Cerner will continue to run on other computer systems while IBM’s products will carry software that competes with its new partner. However, executives from both companies said their alliance will benefit institutions because they won’t have to cobble together pieces from different hardware and software suppliers to automate operations.

Though many hospitals are struggling financially, they are expected to continue spending on information technology.

Hospitals, insurers and pharmacies have until April 2003 to comply with the Health Insurance Portability and Accountability Act of 1996, commonly called HIPAA, which requires better protection of patient medical records. There also has been a focus on automating more of the health-care process since a 1999 Institute of Medicine Report that said medical errors resulted in the deaths of 98,000 patients annually.