Cerner Corp. will build a data center on its Northland campus and double the size of its existing data center in Lee's Summit.
The projects continue an expansion kick that has made the health care information technology company one of the area's fastest-growing employers.
The new data center will open in April 2007, Cerner spokeswoman Lindsey Henry Moss said. Employment is projected at 60 people.
No budget has been set for the Northland project, which could add a second data storage building.
Moss said medical providers' need to store records off-site was underscored by recent storms that pounded hospitals along the Gulf Coast and in Florida. In August, Hurricane Katrina knocked out 13 hospitals that use Cerner to store data. This blow and clients' subsequent disaster recovery confirmed by Cerner (Nasdaq: CERN) needs more remote data storage capacity, Moss said.
The company now stores about 80 clients' medical records on the Summit Technology Campus. The location, which Cerner opened in August 2000, will expand by year \-end to 71,000 square felt of leased space. Employment will remain around 70 people.
A similar expansion is being undertaken in suburban Philadelphia by Cerner competitor Alpha Systems. The electronic medical records provider can send computer disks from its site records vault or support internet access to the information.
W. Curtis Preston, vice president of data projection for GlassHouse Technologies Inc., a data storage provider and consultant in Massachusetts, said more medical records are being stored digitally. Medical providers' need to secure patient information is driven by the Health Insurance Portability and Accountability Act. The act protects the confidentiality of medical records.
George Hill, an analyst with Leerink Swann & Co., Inc in Boston, said he thinks health care providers' demand for reliable record storage will keep growing.
"Hospitals are continuing to look for ways to increase patient safety and deliver higher-quality care," Hill said.
Using Cerner to store data reduces the providers' upfront IT outlays and lets them invest more in other parts of their business, such as patient care and research, he said. Cerner also benefits from off-site hosting, he said, because the company can test new software and other products before they're sold for use at hospitals and other places where clients provide care.
Hill, who doesn't own any Cerner stock, said he anticipates that the company will be able to use its expertise in new ways. Calls are mounting for regional information aggregation that will let hospitals share information, he said. In addition to storing data, Cerner out to be able to add value to its services by analyzing the information he said.
The arrangement also has implications for human resources. Cerner's clients won't need to hire IT staff for work that Cerner can do more efficiently.
"Nobody seems to be able to hire enough tech people," Hill said. "The demand for project is so strong ant he talent pool is so limited that everybody to some extent has a capacity constraint."
Cerner ranks No. 17 on the Kansas City Business Journal's list of Top 100 area employers. The company's work force has added more than 1,200 people since the list was compiled in March and now exceeds 4,400 people.
The Kansas City Business Journal, Jim Davis, November 4 - 10, 2005.
