Tag: cerner

Fresh off the close of its $28.3B acquisition of Cerner, Oracle hosted a virtual event to outline its healthcare roadmap, which ended up being more ambitious than most analysts expected after the company announced plans to build a “unified national health records database.”

Oracle co-founder and CTO Larry Ellison said that the national database aims to replace the hospital-centric approach of current EHRs with a more patient-centric model, pulling data from thousands of separate hospital databases to create a unified view of patient health.

• The goal of the database is to ensure that providers have access to a patient’s up-to-date medical data regardless of their location or past points of care. It will also incorporate real-time updates from provider EHRs to let public health officials monitor trends as they unfold.

• Ellison stressed that data privacy will be a top priority for the buildout. Providers will only be able to access identifiable information with patient authorization, while other researchers and public health officials will be limited to a de-identified view.

While a unified patient record looks like a worthwhile pursuit on the surface, the health IT community was quick to express skepticism towards Oracle’s announcement, citing concerns over everything from data security to a complicated regulatory landscape.

• Successfully building the database would also presumably involve cooperation from Cerner’s EHR competitors, but details were vague on its strategy to accomplish this. Epic’s Cosmos solution houses over 122M patient records and could easily be viewed as a competing product, which makes information sharing seem like an uphill battle.

• Oracle’s presentation was light on information regarding the database’s timeline, cost, and outside access, but Ellison did acknowledge that it’s a “lofty vision” that will likely take a while to execute.

The Takeaway

Establishing a unified national health record has the potential to be a gold mine for Oracle, which mentioned the data’s ability to greatly accelerate life science research and new product development. That said, having the nation’s health data consolidated in a single database operated by a public company is understandably raising some concern, and Oracle has a long road ahead to gain the trust of both the patients it intends to serve and the competitors that will need to cooperate to make its vision a reality.

Sometimes when there’s smoke, there’s fire, and that was definitely the case with last week’s rumor that Oracle was in talks to acquire Cerner in one of the largest healthcare M&A moves of the year.

Database and cloud infrastructure provider Oracle is acquiring Cerner for $28.3B in a transaction expected to close in early 2022. Upon closing, Cerner will be organized as its own dedicated business unit, serving as Oracle’s “anchor asset” to expand deeper into the healthcare sector.

What does Oracle gain from the merger?

Cerner marks Oracle’s largest acquisition ever, with several key benefits justifying the move.

• Oracle and Cerner share a large overlap in end users. Cerner has access to an existing customer base in a giant market, potentially expediting Oracle’s pivot toward the cloud by leveraging these established relationships.
• Cerner is expected to be a source of durable revenue growth, with Oracle anticipating a positive earnings impact in the first year that is likely to accelerate as it expands Cerner’s services into new regions.
• As Oracle looks to push into healthcare, access to patient data will be a deciding factor of success, and Cerner’s EHR data helps eliminate its reliance on third party data providers.

What does Cerner gain from the merger?

Cerner was valued at close to $23B heading into the merger (vs. Oracle’s $280B valuation), and it will be looking to pursue ways to use its newfound scale to help it move past the EHR business that’s been slowly losing ground to competitors like Epic.

• Oracle’s resources, infrastructure, and cloud capabilities will accelerate Cerner’s pace of technology development, while its global footprint could also allow Cerner to reach new geographies faster than if it was a standalone company.
• Oracle’s hands-free Voice Digital Assistant will become the primary interface for Cerner’s clinical systems, reducing time spent typing and creating more time to care for patients.
• Cerner will move to Oracle’s Gen2 cloud with the goal of achieving “zero unplanned downtime in the medical environment,” a migration that should happen quickly because of previous integrations between the two companies. 

Industry Impact

If this strategy sounds familiar, it’s right from Microsoft’s playbook, with the tech giant acquiring Nuance for nearly $20B to add more clinical speech recognition tools while gaining a foothold in healthcare.

Cerner has been in the process of shifting its focus beyond its core EHR business, under the helm of David Feinberg, who left Google to become the company’s chief executive in October. 

Feinberg has stated that improving usability and data analytics would be a critical component of Cerner’s strategy going forward, and the combination of Oracle’s Voice Digital Assistant and cloud computing capabilities could go a long way toward making this strategy a reality.