Oracle recently made its largest acquisition ever by closing a $28 billion deal for electronic health care data company, Cerner. Cerner is a cloud-based platform targeted around Veteran Affair’s patient safety concerns. Oracle’s acquisition of Cerner is a strategic move by Oracle to expand into the healthcare industry. By acquiring a healthcare company, Oracle aims to increase its presence in the healthcare market, potentially allowing health care providers to easily access and share electronic records while giving Oracle a strong foothold into a rapidly-expanding market segment.
Healthcare continues to be the nation’s largest employer, especially after the COVID-19 pandemic. Healthcare dominates in the domestic economy, and the cloud continues to dominate the tech industry. By incorporating the presence of healthcare into the cloud, Oracle has the opportunity to provide easy access to patient’s electronic records across various healthcare organizations.
When announcing the deal, Oracle cited a Mayo Clinic study finding that doctors would spend hours reviewing documents and medical records for every patient, increasing working hours and the probability of medical professional burnout. With the existing vast amount of data, clinicians struggle to get a 360-degree view of a patient’s care history prior to treating them.
According to Oracle, the deal would decrease healthcare spending and would introduce a new standard of data-driven healthcare. It would increase productivity, while allowing doctors to treat patients in a timely manner. Oracle’s goal is to deliver “zero unplanned downtime in the medical environment and to capture opportunities to expand cloud, AI and machine learning applications for Cerner’s healthcare clients.”
But what would this mean for current Cerner customers and what are the practical implications?
- Data security is a concern: The recent Kronos attack has many questioning the security of cloud migrations. Especially with the sensitivity and privacy of healthcare data, customers might find hesitation in the amount of security Oracle can provide.
- Oracle will push Cerner customers to switch to “Oracle paper:” As with any acquisition, we expect Oracle to push hard to get Cerner customers to sign standard Oracle contracts.
- Move To Oracle cloud: We also expect that Oracle will aggressively push Cerner customers to the Oracle cloud in a bid to compete with AWS, Azure and other cloud providers.
- Audit used to generate revenue: Just as concerning are Oracle’s notoriously aggressive tactics in generating revenue from software audits. While Oracle touts its ability to transform the way healthcare data is acquired, shared, and monitored, Oracle’s push into the healthcare industry is about revenue. We fully expect Oracle to squeeze Cerner customers for additional review by conducting aggressive software audits. These audits are typically not about compliance at all, but about a salesperson’s needs to meet a quota.
If you are a Cerner customer dealing with aggressive audit tactics or threats of noncompliance, it will be critical to develop a strategy to protect yourself from incurring unnecessary costs.