Famed technology and software giant Oracle took a bold step late last year when it announced its acquisition of Cerner, an electronic health records (EHR) company. This valiant purchase signaled a new or perhaps reinvigorated commitment for Oracle: reimagining the future of healthcare.
This week, during Oracle’s quarterly earnings call, this commitment was reiterated by top executives in the firm, including none other than Oracle founder and CEO, Larry Ellison.
The company already has a significant presence in multiple facets of the healthcare industry, especially through its robust cloud and software businesses. Ellison highlighted in the call: “So how are we doing in healthcare? We already have Tenet Health, Kaiser, Mayo Clinic, Cleveland Clinic, Northwell Health, Mount Sinai, Atrium Health. I can go a long list of ERP and HCM wins in the healthcare — those are all healthcare providers. We’ve added some additional healthcare providers, mainly hospitals and clinics.”
However, Ellison emphasized an even larger pipeline to come: “Health care is interesting. I started by talking about hospitals, provide — people who provide healthcare. The healthcare industry is much bigger than that. There are medical device manufacturers. There are pharmaceutical companies. There are the payers, insurance companies and government agencies that are all part of this healthcare ecosystem. So we’re not just focused on providers like hospitals and clinics, but also we won a big ERP deal over SAP at Johnson & Johnson, at J&J […] We’re going after the entire integrated ecosystem, and we’re having some great results. Obviously, that influenced our decision to buy Cerner.”
This ecosystem is really where the challenge is. As Ellison discusses, American healthcare is no longer simply about going to doctor and getting a treatment. The entire ecosystem has become incredibly nuanced, entailing complexities with regards to the hospital systems involved, insurance and payor issues, the rapidly evolving provider landscape, pharmaceutical development and delivery, and novel care delivery models. Indeed, healthcare is not the same as it once was.
This complex landscape is a large reason why American healthcare has not had true disruption for many decades. Although there have been significant improvements in how care is delivered and renewed interest in healthcare technology, the reality is that American healthcare is still riddled with numerous issues.
Needless to say, many powerful forces have tried to ideate solutions. Take for example Haven Healthcare, a venture formed by Amazon, Berkshire Hathaway, and JPMorgan Chase with the goal to simplify healthcare access and delivery. Though the company closed after 3 years, it signaled that some of the largest forces in America are increasingly becoming more perturbed by the conundrums of the healthcare system.
Amazon has taken matters into its own hands, creating Amazon Care as an entire healthcare ecosystem to be used by its own employees, removing many of the nuances that accompany traditional employer based healthcare incentives. Now, after formalizing this system, Amazon is slowly rolling out its care infrastructure to the general public, providing people with a new way to receive the care they need.
This is just one example of how companies are investing billions of dollars into resolving the healthcare crisis. Industry giants that never had a core healthcare business understand that there is significant value to be created if they can solve even a small part of the healthcare puzzle. For example, Best Buy, which never really had healthcare in its scope of business, announced last year that it would be paying $400 million for digital healthcare platform, Current Health.
Oracle is no different in this adventure. Though its software and cloud offerings are already well utilized by some of the largest healthcare players in the world, Ellison explained in the press call that there is significantly more scope in the years to come: “And that’s why we think we’re in a good position to roll up healthcare, which is a gigantic industry. No one’s ever really tried this before, but we have all the pieces. We have the payment pieces. We automate a lot of the insurers. We have HCM, which allows us to help them manage their workforce. We have ERP, which helps them keep track of inventory. And soon, we will have Cerner, which will help them to deliver care to patients. So we’ll be — and we have clinical trial system for the pharmaceutical base. We have the entire portfolio, and we’re interconnecting all the pieces so we can make that ecosystem work efficiently for the first time. And actually, the pandemic has showed we’re in desperate need of such an integrated system.”
With these initiatives in sight, and as healthcare continues to grab the attention of some of the largest corporate forces in the world, perhaps disruption is just around the corner, after all.