Cerner Corp. officials took a big breath Monday before embarking on a path forward without co-founder Neal Patterson.
Patterson, who died Sunday at age 67, was lauded as the visionary and innovator who built a powerhouse company “at the intersection of health and technology.”
Patterson, as chairman and CEO, had minimized public appearances for Cerner since his cancer diagnosis was made public in January 2016. He made a surprise appearance in November at the big Cerner Health Conference in Kansas City’s Sprint Center, telling attendees then that he was getting stronger and better.
But fellow executives said Patterson continued to be deeply involved in corporate strategy since then.
Part of that strategy was having a strong executive team and a succession plan in place. Clifford W. Illig, who co-founded Cerner 38 years ago with Patterson and Paul Gorup, was immediately appointed chairman and interim CEO.
Company president Zane Burke and chief operating officer Mike Nill also have taken more visible public roles in recent months.
Possibly because the company had the past year and a half for the leadership team to grow in visibility, the unexpected timing of Patterson’s death did little to publicly rattle investors.
Stock traders kept close watch on trading in Cerner’s shares (NASDAQ: CERN) Monday and shares closed down 40 cents at $65.34. The company’s shares had closed Friday at $65.74, which was near its 52-week high of $69.28.
According to AnalystRatings.com, the current analyst consensus on Cerner is “moderate buy,” and the average price target is $69.09, for a 5.1 percent rise.
Patterson’s death comes at a time when the whole electronic health records and information industry struggles with a changing environment, said analyst David Grossman with Stifel Nicolaus & Co., but Cerner has had time to prepare for a leadership transition.
“They’ve known for a while that he probably was not coming back full force,” Grossman said.
Overall, market analysts praised Patterson as a pioneer in the health care technology industry. Indeed, Patterson and others at Cerner hold patents on some of the systems or processes used in such work.
Patterson owned 7.64 percent of the company’s shares, according to the company’s proxy statement as of March 3.
Cerner’s other largest shareholders were The Vanguard Group Inc., 8.54 percent; Wellington Management Group LLP, 6.46 percent; BlackRock Inc., 5.58 percent; Generation Investment Management LLP, 5.21 percent, and Illig, 4.59 percent.
Patterson’s 25,224,574 shares included 2,898,940 held by his wife, Jeanne Lillig-Patterson, as trustee for their children. That number excluded 209,552 shares owned by Lillig-Patterson.
Part of Patterson’s legacy is the development of Kansas City’s largest private-sector employer. Cerner has about 12,800 workers in the Kansas City area, where it has three large corporate campuses and several smaller office locations. Internationally, its employment total jumps to about 24,000.
The company’s growth has been fueled by federal mandates to digitize health care records and provide “interoperable” access among doctors and hospitals.
Patterson was a major proponent of such computerization and sharing, often citing the “shopping bags full” of patient health records toted from doctor to doctor by his wife when she dealt with her own health problems.
As Cerner prospered, it also became a real estate developer, opening two large office developments in Kansas City, Kan., and in south Kansas City.
The company’s success also fueled Patterson and Illig onto lists as some of the nation’s wealthiest people. Both used some of their wealth to invest in OnGoal LLC, the group that in 2006 bought the Sporting Kansas City soccer team from Lamar Hunt.