Oracle sees automation opportunity in healthcare following pandemic

Doctor Ellison says big wins in the sector influenced decision to buy health records outfit Cerner


The pandemic highlighted systemic weaknesses in healthcare systems around the globe and Oracle technology is going to fix those issues.

At least that was the hyperbole from Big Red founder and CTO Larry Ellison, who outlined the database giant's plans for the vertical market amid Oracle's proposed $28.5bn buyout of health records specialist Cerner.

"We're beginning to see us roll up certain industries, starting with the largest industry on Earth, healthcare," he said.

"Hospitals have a gig economy. Doctors work in multiple hospitals, multiple clinics, have their own offices. Nurses, same thing. Scheduling and paying the workforce in hospitals is one of the most complicated things ongoing in our changing economy. And we have adapted our HCM systems so that we do help the hospitals recruit, track, schedule, and pay for their health professionals."

The CTO reeled off ERP and HCM wins of healthcare customers listing hospitals and clinics, such as CHS Community Health Services in Europe, but said the "healthcare industry is bigger than that: there are medical device makers, insurers and government agencies."

With this in mind, Oracle pipped SAP to an ERP deal at Johnson & Johnson, Haemonetics, and Saskatchewan Health Authority, said Ellison.

"This portion of just the providers, just the ambulatory clinics, just the inpatient hospitals, just the payers, just the pharmaceutical company, just the medical device. We're going after the entire integrated ecosystem, and we're having some great results. Obviously, that influenced our decision to buy Cerner."

He said Oracle is building "specific features and functions to automate healthcare."

In the US, for example, before a doctor authorizes a test and prescribes a drug for a patient, they call the insurer to make sure it is paid for. Oracle thinks it can smooth the back-and-forth process.

"We're automating that interaction between the payers and the providers. So yes, we're adding a lot of industry-specific features to automate the interactions in the entire ecosystem. And that's why we think we're in a good position to roll up health care, which is a gigantic industry. No one's ever really tried this before, but we have all the pieces."

Some $8.45tn was spent by the healthcare industry in 2018, and it could top $10tn this year. According to Deloitte, COVID-19 "accelerated existing and or emerging health trends" including the integration of life sciences and healthcare, shifting consumer preferences and behavior, and integration of digital tech that may help change "delivery models and clinical innovation."

Ellison concluded: "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.

"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."

Some Reg readers might be feeling a little queasy at the thought of putting their life in Larry's hands. Maybe others will be entirely fine with it.

The financial services sector should also be warned that Oracle is looking to do similar things with companies in that space.

As for those financial results – the reason Larry was waxing lyrical on an earnings call – Oracle reported revenue of $10.5bn for its Q3 ended 28 February, up 4 percent year-on-year. Within this top line: cloud services and license support grew 5 percent to $7.637bn, cloud and on-premises licenses grew 1 per cent to $1.289bn, hardware fell 3 percent to $798m and services was up 7 percent to $789m. ®

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