Cerner Corporation and Siemens AG announced on Tuesday that Cerner will acquire Siemens Health Services — assets of Siemens' health information technology business unit — for $1.3 billion in cash. The companies will also be forming a strategic alliance to invest in projects that integrate health IT with medical technologies.

"As we thought about the amount of innovation and interoperability that we could demonstrate in multiple ways, we got more and more excited about the possibilities," Zane Burke, president of Cerner, told DOTmed News.

Based on 2014 estimates, Cerner and Siemens Health Services combined have 20,000 associates in over 30 countries, 18,000 client facilities, $4.5 billion of annual revenue and $650 million of annual research and development investment.

Burke thinks that the acquisition is going to benefit both companies. "We actually have a fair number of solutions that would help complete the Siemens footprint in our EHR diagnostic," he said. "So immediately we'll bear some assets that Siemens clients can take advantage of if they so choose. We think that's a really great thing for them and for us overall."

The companies expect that the acquisition will close in the first quarter of 2015. Siemens Health Services will retain their leadership but a new name will be created for the combined business.

Additionally, Siemens' Soarian solution name will be kept but it will be rebranded by Cerner. Cerner plans to support and advance the Soarian platform for at least the next 10 years.

The strategic alliance that the two companies are forming will bring new solutions to market that combine Cerner's health IT expertise and Siemens' medical device imaging expertise. The alliance has a three-year initial term and each company will invest up to $50 million to fund the projects.

One of the innovations the alliance will work on is embedding information from the EHR inside diagnostic and therapeutic technologies. "It's certainly one area where we think there is a lot more to be done and can be very interesting," said Burke.

He said many devices today are either "too smart or too stupid." Too smart because they load up a bunch of data on the device and create an "island of information" but a physician needs that information on the EHR. Some are too stupid because they can't connect to the EHR and physicians have to reenter data.

"That's one of those areas where there is a lot of opportunity for efficiencies and solving problems in terms of labor and getting care back to the bedside versus sitting at a computer," said Burke.

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