With Cerner acquisition, Oracle hopes to revolutionize healthcare
We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 — 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!
This week, Oracle’s campaign to “move up the stack” took a big step forward. The company officially completed the acquisition of Cerner, a major supplier of health information systems, with a star-studded event filled with speeches from Oracle’s leader, Larry Ellison, as well as appearances by celebrities like Tony Blair, the former prime minister of Great Britain.
The deal continues a shift in the corporate model that’s been unfolding for a while. In the past, Oracle built software and left it up to the customers to fill the database up with whatever they wanted. Lately, Oracle has been shifting to a vision where the data itself and the control of it may be where the true value lies.
“Oracle was the one big tech vendor that didn’t make a big cloud-related move, and so when the announcement was made on [its] acquisition of Cerner, it made a lot of sense in many ways caused a big splash,” said Mutaz Shegewi, an analyst and research director at the tech market intelligence firm International Data Corporation (IDC). “I think it was Oracle’s way of saying: we understand that healthcare is the new major battleground. We have modern cloud infrastructure that can align well with healthcare requirements.”
Healthcare is a large industry with almost an insatiable appetite for data storage. From the images collected by the radiology department, to notes taken by the front-line physicians — the stream of data doesn’t end. Unlike more ephemeral businesses like a coffee shop, there are plenty of good legal and therapeutic reasons to keep healthcare data for a long time.
Cerner, meet Oracle
Cerner is one of the oldest companies to develop electronic medical records, offering systems that handle the data storage chores for doctors’ offices, clinics and hospitals. The Kansas City, MO-based company started more than 40 years ago and has grown to employ more than 26,000 people. In 2020, the revenue topped $5.5 billion.
Other technology firms are following a similar path. Microsoft has been bolstering its offerings for electronic health records. Last year, it announced the purchase of Nuance Communications for $19.7 billion. The company is one of the leaders in speech recognition software, a key technology for allowing doctors to keep accurate records easily without constantly juggling a keyboard.
Microsoft now operates a separate business that’s dedicated to offering turnkey solutions for the medical profession. Its Cloud for Healthcare service provides secure mechanisms for delivering personalized patient services while enabling sharing between doctors and teams. The tool is built upon software like Azure Dynamics 365 that’s also marketed directly to development teams.
Oracle wants to compete directly with tools like Microsoft’s. In the keynote presentation, Ellison spelled out how Oracle can combine the market expertise of Cerner with the existing technology in Oracle’s stack.
“This is something we do extremely well at Oracle,” said Ellison. “We’re a leader in HR and supply chain management.”
Ellison wants Oracle’s ERP software to help manage the inventory of supplies and drugs throughout the system. Oracle, for instance, can manage the supply chain of medical supplies and drugs to avoid shortages and guarantee quality. Ellison illustrated this opportunity with the idea of putting RFID tags on packages to help track drugs, while deploying a blockchain that will authenticate the supply to ensure quality.
“There’s always a chance for someone to intercept the authentic drugs and replace them with counterfeits while they sell the authentic drugs,” warned Ellison. “We’re going to make sure that never happens by the use of blockchain.”
Improvements to Cerner’s existing system
Oracle also wants to use its technology to expand and improve Cerner’s existing system. A big part of this plan includes integrating telecommunications with data storage to create a personalized portal that patients can use to track their health while working with doctors. It will also integrate tightly with users’ smartphones and wearable medical tracking devices to routinely upload current information to the Oracle Cloud.
“We’re going to expand Millenium,” Ellison said, speaking of the existing software currently delivered by Cerner. “The first thing we’re going to do is make it easier to use. We’re going to add a voice user interface that makes it easier for doctors to access data.”
Oracle also plans to change the architecture for the entire healthcare records system. The vision is to replace the thousands of different systems spread out between offices and hospitals with one system that tracks patients everywhere.
“Today’s health data systems are hospital systems, not patient systems,” explained Ellison. “Each hospital system has [its] own health management system. Each has [its] own health record database. If you’re a public health officer and you want to find out how many people were hospitalized with COVID-19 in the last 24 hours, you can’t get at that data. That data is literally in thousands of separate databases.”
Tony Blair was introduced to the audience because he’s working with a foundation to improve healthcare in the U.K. Blair says that Oracle’s new software can help the government health system build a single, centralized repository for medical records.
Blair’s presence indicates that Oracle intends to leverage its ability to sell directly to governments. In the early years, the company’s bottom line was bolstered by contracts that helped the government build data storage systems for managing the populace. The company’s sales team understands how to work with governments as customers.
“World leaders today are looking beyond the pandemic,” said Blair. “With the addition of the electronic health records solution, which is another part of Oracle’s portfolio, I think there’s a real potential to deliver on that vision.”
The pandemic’s lessons
Indeed, Oracle learned many lessons about healthcare while attacking the pandemic, lessons that are also informing Oracle’s vision for what it will build after the merger. Ellison pointed out that this centralized database will be a big help for researchers who want to track outcomes and plan clinical trials. Many trials today require people to live near the major hospitals where the research is being done. Oracle wants its system to support research everywhere, something that it feels will add diversity to the patient data and lead to better treatments and drugs.
Oracle also plans to invite drug companies, hospitals and doctors to work with them on the data, perhaps deploying some of Oracle’s expertise with artificial intelligence to analyze the data.
“The people at Oracle are not going to be developing those AI models,” said Ellison. “Our platform is an open system, and it allows medical professionals to go ahead and build in there.”
Ellison noted that some of the new features that will emerge after the merger are based on some early work that Oracle did for the U.S. government during the COVID-19 pandemic. The company collaborated with the government to develop a system that tracked how people were reacting to the vaccine.
“The most interesting thing to come out of VSafe was that it collected the information that showed it was safe to vaccinate pregnant women,” said Ellison. “When the first clinical trials were run, the pregnant women were not included and [use by] pregnant women wasn’t approved. But over 130,000 women said that they didn’t know they were pregnant when they were vaccinated. There weren’t a statistically significant number of adverse reactions, and this allowed U.S. regulators to say: alright, pregnant women can now safely take these vaccines.”
Rethinking Oracle’s role
Throughout the discussion, Ellison and many of the Oracle executives highlighted how the company is rethinking its role. Instead of simply debating questions about the best way to store data or the fastest way to answer a database query, the company is thinking strategically about how its technology can improve medical care. Oracle’s grand vision sets the stage for the company to become more of a medical information company than a technology company.
The deal with Cerner may appear to be just the work of the last year, but it’s the culmination of years of investment by Oracle in healthcare records, said Stephanie Trunzo, the senior vice president and general manager of Oracle Health
Oracle had been working in the business for years, and the merger simply made it more apparent. Now, she believes that the combination of Cerner’s market expertise with Oracle’s deep technical knowledge will create a new platform that will revolutionize the medical industry.
“It’s a future with greater health equity and predictability in improved outcomes for people globally,” promised Trunzo.
VentureBeat’s mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.