‘’Healthcare is the largest and most important vertical market in the world — $3.8 trillion last year in the United States alone,” Safra Catz, Oracle’s CEO, said recently.
The marketplace supports that viewpoint. The global healthcare cloud computing market is expected to reach a CAGR of 14.1% between 2021 and 2026 and upwards of $52.3 billion, according to a recent Mordor Intelligence report, Healthcare Cloud Computing Market – Growth, Trends, Covid-19 Impact, And Forecasts (2022 – 2027). As reported, EMR is expected to show steady growth during the forecast period 2021-2027.
With those numbers and Catz enthusiasm as the backdrop, it’s no surprise that Oracle entered the healthcare arena in December when it announced plans to acquire Cerner – a leading provider of digital information systems used within hospitals and health systems. Oracle indicated that as the Cerner systems already run on the Oracle database, migrating and integrating Oracle cloud offerings such as its Voice Digital Assistant can be accomplished seamlessly and without downtime. It’s been a month since the announcement, and while the SEC has yet to formally announce its approval for the acquisition, the deal is expected to be approved.
Oracle is certainly buying in at the top. Based on revenue, the three biggest EMR software companies are Cerner, Epic and Allscripts, according to Signify Research’s EHR database (comprising 135 vendors) . This is determined (in part) by market share, income reported, and the size of their customers – such as network hospitals, standalone hospitals, veterans’ hospitals, ambulatory care, and pharmacies, to name a few ancillary business models that all require access to a robust EMR software suite. That EMR software is also expected to coordinate seamlessly with other software packages needed in addition to patient records. There are multiple opportunities for breakdowns from scheduling office staff, coordinating surgical suites, bookkeeping and more.
Oracle has its work cut out for it. The EMR field is overpopulated with competing software, offering competitive pricing plans, and tiered services for providers. The sales pitches all look good on paper, but health providers report poor operability, inadequate training, and “a series of broken promises.”
Reaction to Oracle’s acquisition
According to Bloomberg analysts, Oracle’s “aggressive use of cash” is pushing the company to the cusp of a junk rating. In his Forbes article, Peter Cohen voices doubt that Oracle will earn back the Cerner purchase premium, and points out that Oracle holds a much smaller place in the cloud services business compared to industry giants Amazon, Microsoft and Google. Following the news of an all-cash Cerner deal, shares of Oracle fell 5.2%
Concerns about Oracle are focused mainly on whether it will be able to maintain its current structured debt payment schedule, how a Fitch BBB rating will affect their stock, and whether they’re about to lose a significant amount of clients due to the congressional oversight committee looking into massive software rollout failures, including a VA in Spokane, WA, that switched to Cerner with disastrous results.
Home is the new healthcare hub
Oracle is betting on benefitting from an increase in demand for telemedicine as the number of tech-savvy senior citizens in the U.S. increases. With that demand will come more reliance on technology such as AI and voice recognition software to act as front desk, diagnostic tool, and accounting department. There are dozens of EMR systems for a doctor’s office to choose from and all insist that its software is the best. In promoting their acquisition of Cerner, Oracle says its 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.”
Those companies that have the largest presence in cloud-based services are also investing in the EMR industry. Google Cloud Healthcare Data Engine offers medical providers a means to generate healthcare insights and analytics with machine learning and predictive text. Microsoft’s purchase of Nuance Communications, a speech recognition company (and competitor to Oracle’s Voice Assistant) is expected to increase Microsoft’s Total Addressable Market or TAM in the healthcare vertical to $500 billion. Microsoft CEO Satya Nadella highlighted Nuance’s healthcare tools as the key driver behind the acquisition.
Retail giants are also investing heavily in healthcare at home. In addition to its online pharmacy, Amazon HealthLake is being used by ambulatory care providers, and the Amazon Care telemedicine app has been available to employers nationwide since March 2021. BestBuy bought CurrentHealth in October 2021, a care-at-home technology platform adding to its portfolio of products tailored for aging consumers. Online retail and home delivery giant Walmart acquired MeMD telehealth in 2021 to “complement its in-person health centers.” MeMD telehealth also adds nationwide virtual care options to Walmart’s clinic services portfolio.
Just as restaurant servers and airline stewards have had to become Wi-Fi tech support, nurses and office staff have had to become IT experts on their EMR systems, not just in terms of doctors notes, and patient needs, but also restocking in-house supplies, connecting every patient visit with insurance claims, and scheduling staff. Addressing some of these issues, Johns Hopkins School of Medicine is offering students a one-day intensive in March called “Preparing our Healthcare Workforce for the Future of Telemedicine.” Harvard professors wrote a paper in 2016 urging the medical school to include classes on how to make telemedicine a better experience for the patient and the provider. Yet organizations are still lagging in moving these important records to efficient cloud-based services.
Will medical record growth in cloud services improve healthcare?
Despite finance industry hesitancy, Oracle is bullish on what it and Cerner can achieve together. “We will make Cerner’s systems much easier to learn and use by making Oracle’s hands-free Voice Digital Assistant the primary interface to Cerner’s clinical systems,” said Mike Sicilia, executive vice president of Oracle. “This can be done very quickly because Cerner’s largest business and most important clinical system already runs on the Oracle Database. No change is required there. What will change is the user interface. This will allow medical professionals to spend less time typing on computer keyboards and more time caring for patients,” he said.
This is good news for system subscribers like hospitals and medical practices. According to a recent study by the Mayo Clinic, physicians spend one to two hours on EMRs and desk work for every hour spent in face-to-face contact with patients, as well as an additional one to two hours of personal time on EMR-related activities often leading to professional burnout.
Reliance on AI, chatbots, and voice recognition software in place of live operators has been a popular time- and money-saving trend for many years. Unfortunately, there’s ample evidence that interactive AI and chatbots are heavily influenced by the biases which are programmed into them. One example, a study in 2019, showed that Black people were 28.8% less likely to be referred into potentially life-saving treatment programs because of the way an algorithm interpreted data. These issues are inherent in every system because the biases are inherent in society.
EMRs that are built as efficient billing systems, created to seamlessly coordinate with insurance claim submittals, and provide general software tools for the overall management of a large medical practice or hospital system often fail on rollout to provide adequate access to medical records, leaving doctors no choice but to use hand-written patient notes and prescriptions – – which then must be manually entered in the system by yet another staff person.
Industry buzz suggests that the Salesforce Health Cloud could bridge the gap between healthcare customer relationship management (CRM) and EMRs and might be readying itself for another purchase in the health arena.
Security looks to be a missing piece to the EMR puzzle and it will be interesting to watch and see if a cybersecurity company comes into the field.
How the field of EMR grows depends upon the larger entities buying complementary companies. Who will be innovators in the emerging opportunity for software that can make all the disparate parts work together seamlessly?