Former Geisinger CEO David Feinberg, M.D., Named Cerner CEO | Healthcare Innovation

In a press release posted to its website, the Kansas City-based Cerner Corp. announced on Thursday, Aug. 19 that it had named David Feinberg, M.D., as Cerner’s president and CEO, effective October 1. Feinberg has been well-known as president and CEO of the Danville, Pa.-based Geisinger Health System (2015-2019), and before that, as a senior executive at UCLA Health in Los Angeles; most recently, he has since 2019 served as a vice president of Google Health. Feinberg will lead one of the nation’s (and world’s) largest electronic health record (EHR) solutions companies, with more than 26,000 employees and 2020 revenues of $5.5 billion.

The press release began thus: “Cerner Corporation (Nasdaq: CERN) today announced that its Board of Directors has appointed David Feinberg, M.D., MBA, as President and Chief Executive Officer, effective October 1, 2021. He succeeds Brent Shafer, who previously announced his decision to transition from chairman and CEO. Dr. Feinberg will serve as a member of the Board of Directors. Cerner’s current President, Donald Trigg, will leave Cerner. Cerner’s Board of Directors also announced that it will separate the roles of chairman and Chief Executive Officer and has appointed William Zollars as independent chairman, also effective October 1, 2021.” Brent Shafer currently serves both as CEO and chairman.

The press release noted that “Dr. Feinberg, 59, has served in numerous senior leadership roles during his more than 25-year career in healthcare, and joins Cerner from Google. Since 2019, Dr. Feinberg was the Vice President of Google Health, where he led Google’s worldwide health efforts, bringing together groups from across Google and Alphabet that used artificial intelligence, product expertise and hardware to tackle some of healthcare’s biggest challenges, and was responsible for organizing and innovating Google’s various healthcare initiatives. Prior to Google, he served as President and CEO of Geisinger Health—a physician-led health system, and one of the nation’s most innovative health services organizations. At Geisinger, Dr. Feinberg led an operational turnaround, and pushed the use of new platforms and tools, including an IT system called a Unified Data Architecture that allowed the company to integrate big data into existing data analytics and management systems. During his Geisinger tenure, Dr. Feinberg also introduced programs and services to put a greater focus on precision medicine and better patient care. Prior to Geisinger, Dr. Feinberg worked at UCLA for more than 20 years and served in a number of leadership roles, including President, CEO and Associate Vice Chancellor of UCLA Health Sciences, Vice Chancellor and CEO for the UCLA Hospital System, and CEO of UCLA’s Ronald Reagan Medical Center. Throughout his career, Dr. Feinberg has been driven by a passion to leverage technology to better-enable providers to deliver the very best clinical care.”

And it quoted Mitch Daniels, a member of Cerner’s board and the chair of the Nominating, Governance and Public Policy Committee, as stating that, “Over the past few months, our Board conducted an extensive search for a CEO candidate with the expertise and ability to effectively capitalize on the opportunities in the market we serve. With his exceptional track record of leading and innovating programs to improve patient care, technology experience, and industry expertise, we believe Dr. Feinberg is the ideal CEO to lead Cerner in its next chapter of growth and success.”

“I am honored to join Cerner and look forward to working closely with Cerner’s talented associates as we continue to profitably grow the business by driving global healthcare transformation,” Dr. Feinberg said in a statement contained in the press release. “Throughout my career, I’ve been guided by the goal of improving patient health and reducing the complexity of the healthcare system. I am thrilled to join a company that is so uniquely well-positioned to provide technology solutions that enable clinicians to take better care of patients while driving better clinical, operational, and financial outcomes for organizations of all sizes. I look forward to expanding opportunities for Cerner clients and associates while affecting real change in healthcare and enhancing value for our shareholders.”

The Wikipedia article on Cerner notes that “Cerner Corporation is an American supplier of health information technology (HIT) services, devices, and hardware. As of February 2018, its products were in use at more than 27,000 facilities around the world. The company had more than 29,000 employees globally, with over 13,000 in Kansas City, Missouri. Its headquarters are in the suburb of North Kansas City, Missouri. It also confirms that “Cerner was founded in 1979 by Neal Patterson, Paul Gorup, and Cliff Illig, who were colleagues at Arthur Andersen. Its original name was PGI & Associates but was renamed Cerner in 1984 when it rolled out its first system, PathNet.” Patterson served as the company’s CEO for many years prior to his death from complications from soft-tissue cancer on July 9, 2017.

Cerner’s second-quarter 2021 earnings, announced on July 30, including the following highlights:

• Revenue of $1.457 billion, up 10% compared to $1.330 billion in the second quarter of 2020, which included

the largest impact of the pandemic last year.

• GAAP operating margin of 3.4%, down from 11.0% in the year-ago quarter, reflecting impacts from employee

separation costs, an impairment related to sold and held-for-sale properties, and product rationalization.

• Adjusted Operating Margin (non-GAAP) of 20.6 percent, up 220 basis points from 18.4 percent in year-ago quarter.

• GAAP diluted EPS of $0.11, down 75 percent compared to $0.44 in year-ago quarter.

• Adjusted Diluted EPS (non-GAAP) of $0.80 up 27 percent compared to $0.63 in year-ago quarter.

• GAAP cash flow from operating activities of $369 million, up 43 percent compared to $259 million in year-ago quarter.

• Free Cash Flow (non-GAAP) of $162 million, up 153 percent compared to $64 million in the year-ago quarter.

Accompanying those financial figures was a statement by Brent Shafer. Shafer stated that “I am very pleased with Cerner’s top and bottom-line execution in the second quarter, with our results reflecting good progress on our transformation initiatives and a strengthening market presence. We delivered good revenue growth, expanded Adjusted Operating Margin and increased Adjusted Diluted EPS (non-GAAP) during the quarter while continuing to accelerate innovation and drive client value.”

“During the second quarter we took a series of actions which we believe will strengthen our business in the years ahead. Namely, as part of recently implemented productivity measures and a comprehensive review of our business, we performed a sizable reduction in force, took specific measures to shrink our physical (office space) footprint and made some important product rationalization decisions to improve the return on our nearly $800 million annual R&D investment,” said Mark Erceg, Executive Vice President and Chief Financial Officer. “We also spent $400 million on share repurchases, which brings our year-to-date purchases to $750 million, because we continue to believe that Cerner stock, at current trading levels, represents a good return on investment for our shareholders.”

While CEO at Geisinger, Feinberg had been a strong champion of internal health system reform, pushing the integrated health system he led to address the social determinants of health, health equity, and population health overall, and emphasizing the need to anticipate healthcare delivery’s shift towards the home. In one of the “Fixing Healthcare Podcast” episodes, moderated by Jeremy Corr and Dr. Robert Pearl, and posted on Oct. 9, 2018, Feinberg was quoted as stating that “Fixing healthcare in America is the simplest thing we can do. The problem is, we’ve been looking at the wrong problem … Really what we need to do is say, “Well, what does drive health, and what does drive mortality?” We probably get 20 percent of whether we live or die, whether we have life in our years and years in our life, based on going to good doctors and good hospitals. We’re going to put all of our efforts in my plan, or the majority of effort, on all the other stuff, the stuff that really matters: your genetic code, your zip code, your social environment, your access to clean food, your access to transportation, how much loneliness you have or don’t have.”

Feinberg added that “I run a health system and we have about 13 or so hospitals and I think my job is to close every one of them. I think a lot of patients, even the ones that you managed well but ended up in the hospital, could be managed better at home. We look at our highest utilizers, our sickest patients. We show up at their house in two cars, because we can’t all fit in one car, and we got a nurse, a palliative care nurse, a community health worker, a pharmacist, a doc. We say, “Hi, sir or ma’am, we’re here to take care of you, and our goal is you never go in the hospital again and we know you’ve been hospitalized 12 times in the last year. Let’s clean out the medicine cabinet. Let’s make sure the house is safe. Oh, you have a bunch of appointments that are hard for you to get to? We’ll do them through telemedicine right now at the kitchen table.” Just completely eliminate the need for those folks to ever go in the hospital again.” And, referencing existing hospital facilities, he said that “I would say those of us in this business that think we need to hang onto those bricks and mortars, we’re going to start looking like Blockbuster Video and Netflix is coming. So I think the bricks and mortars are an asset that we need to get rid of as quickly as possible, because we take care of people in a way that they’re used to in every other part of their life now. So everything you can get at home, everything you can get online, except good healthcare, and so we’re driving all the care to home and we think if you went into our outpatient clinic, that’s a failure of our home care and if you went into our inpatient, that’s a failure of our outpatient, because we could do a lot of it in buildings that we kept 24 hours open that don’t need to have the same kind of acuity as a hospital.”

And, while at Google, Feinberg was interviewed in a podcast by former Senator Bill Frist (himself a former practicing physician). Frist wrote on March 11 in Forbes online that “Feinberg’s goal is to move Google Health beyond just safe search. For instance, he described a partnership with Ascension, one of the largest private healthcare systems in the United States, to recreate the Google Search experience for doctors and nurses within the health system’s own patient records in a secure way. ‘At this point, I’d still call it pilot, but we have live patient data with doctors and we think—likely—we’ll be able to improve care for people. They won’t get tests they’ve already had because the doc couldn’t find it. They won’t get asked questions they’ve been asked 100 times because that information will be available. We hope that it’ll lead not only to better quality care, but more time with your doctor,’ he told me.”

The search for a new CEO at Cerner, to replace Brent Shafer, was announced in May.