What changes might customers face with the Cerner acquisition
Organizations that want to keep Cerner systems worry about possible changes, some likely to occur over time and others surrounded by questions.
The geography of the healthcare industry has been re-shaped by an array of political, medical, technological, and business and financial maneuvers. Mergers by providers, acquisitions of one group by another and the collapse of practices have brought clarity and logic in some instances, and continuing disorganization in others.
A KLAS report from 2019 shows that acquisitions are successful about 40 percent of the time and unsuccessful in 42 percent. When acquisitions go well, KLAS concludes, customer loyalty improves; when they go poorly, customers are twice as likely to leave their vendor.
It will take some time before we can assess the success of the Oracle-Cerner transaction, but in the meantime, those affiliated with Cerner have some serious issues to consider. This article will focus on the most important matters that must be weighed by current Cerner customers.
Components likely to change: Cloud services
Before Oracle initiated its campaign to acquire Cerner, the latter selected Amazon Web Services as its strategic cloud partner, citing its “market leadership and the way they are viewed in the healthcare industry around stability, security, privacy, and reliability.”
Based on market share, Cerner made the safe choice; AWS is the leader, followed by Microsoft Azure and Google Cloud. These three have 62 percent of the global cloud infrastructure market. According to Synergy Research, Oracle’s share is about 2 percent. By another measure, AWS’s revenue is seven times greater than Oracle’s cloud revenue.
But Oracle has made clear it intends to move Cerner to the Oracle Cloud Infrastructure (OCI), an ecosystem in which people, patients, providers and payers will be able to access clinical, operational and financial data on the cloud. In its earnings call June 13, Oracle CEO Safra Catz described “how we will be running Cerner…we are reviewing Cerner’s entire product portfolio to identify areas where we can include Oracle technology rather than third-party products, as well as moving them to OCI.”
What should Cerner’s customers think of this? Their own transition to AWS, begun three years ago, is already well along or complete. Should they now make an about-face to Oracle’s cloud? Can they?
The relationship with AWS is not just a matter of preference. It is bound by contractual obligations. Furthermore, many of Cerner’s core products would require years of labor to migrate to the cloud. And current trends in the market show large enterprises prefer a multi-cloud approach that provides enough flexibility to leverage the strengths of other public clouds, as well as hybrids.
Thus, a transition from AWS to OCI would be complicated under the best of circumstances. But it’s hard to miss the tone of Oracle’s announcement. It intends to remove AWS from the Cerner portfolio. As one legal observer notes, a current class action suit claims Oracle forced customers to buy its cloud offerings without their knowledge and then threatened to impose large license agreement penalties unless the customer accepted a cloud subscription that they didn’t want and wouldn’t use.
Cerner customers will have to weigh allegations such as these against Oracle’s claim that it is going to provide a more stable, secure and innovative product portfolio for customers along with faster top-line and bottom-line growth.
Components likely to change: Revenue cycle management
Cerner has long been hindered by dissatisfaction with its approaches to revenue cycle management, the inability to integrate an RCM solution with its clinical platform. John Moore of Chilmark Research says he has been told by numerous CIOs that they moved from Cerner to Epic because of their dissatisfaction with Cerner Patient Accounting (CPA) and its successor, RevElate. Moore wonders how Oracle will address this situation, declaring that “this single issue will determine Cerner’s eventual success or failure.”
Testimony from Cerner customers reveals the extent of the problem. A KLAS report on the introduction of RevElate says operational problems have persisted from the beginning and that some customers are still recovering from botched implementations that were enacted several years ago. One user referred to the addition of RevElate as painful and claimed Cerner’s team members did not learn from their mistakes. Others described Cerner’s training resources as difficult to access, lacking in substance and poorly aligned with workflows.
This is where Oracle’s extensive and well-respected expertise in financial technology promises to have a significant positive impact. Oracle pledges that there will be “zero unplanned downtime” for Cerner customers. And many Cerner customers, wavering between hope and concern, believe that Oracle can seize this opportunity to alleviate current difficulties by providing more automation, artificial intelligence and machine learning – in short, domain expertise from other industries.
Oracle intends to provide Cerner with the same kind of unified database that characterizes its financial instruments, with patient information accessible to providers and public health officials. All data, all of it anonymous, will be quickly accessible.
The company also aims to add to Cerner’s capabilities an integrated telemedicine module and disease-specific artificial intelligence modules. And Oracle’s achievements in enterprise resource planning and human resources will equip Cerner with administrative enhancements to manage recruiting, scheduling and paying while overcoming supply chain and inventory challenges.
Oracle’s fully integrated ERP should greatly improve the ability of Cerner’s clients to understand all the costs of delivered care. For example, by linking Oracle’s asset management capabilities to Cerner’s health records, front-line clinical staff will obtain real-time access to asset availability and stronger inventory management resources.
Components likely to change: Voice recognition software
When the deal for Cerner was announced last year, Oracle made clear that its plan was to provide “medical professionals with a new generation of easier-to-use digital tools that enable access to information via a hands-freevoice interface.” This remains a key element in Oracle’s goal to “rapidly modernize Cerner’s system” by enabling clinicians to make commands in the EHR via voice instead of typing on the computer keyboard.
Less than three months later, at the HIMSS Global Health Conference, Cerner announced an expansion of its existing collaboration with Nuance’s voice-recognition software, Dragon Ambient eXperience. “The collaboration deepens the existing integration of Nuance and Cerner technologies and is expected to help manage administrative workloads that lead to clinician burnout, expand access to care for patients and enhance healthcare outcomes with clinical documentation that writes itself.”
It is ironic that there should be this deep a communications chasm in which competing means of communication are being disputed.
Unresolved Issues: Interoperability, resistance to change, legacy problems
Other factors that have bedeviled healthcare systems require attention, even if the principals in this merger seem to be paying only lip service to them.
For example, everybody acknowledges the importance of interoperability. A recent survey shows 97 percent of healthcare executives demand more data interoperability. It’s doubtful that figure has changed in ten or more years. Oracle says medical records should be portable and that closed systems do not foster connectivity but that additional solutions only exacerbate the problems the industry currently has with its fractured and silo systems. According to Oracle EVP Mike Sicilia, “0racle has the power to aggregate data into a single source of truth to achieve better outcomes.”
What this does not take into account is that while Oracle may be able to impose its solutions on Cerner, Epic has nearly one third of the hospital market. Epic also endorses interoperability, but will their customers and all of Cerner’s be comfortable making a change to Oracle’s enhanced clinical systems? What percentage of the 97 percent who clamor for interoperability are willing to share their patient data with other systems and their vendors?
Experience shows that health systems have no interest in sharing their immensely valuable data with anyone, especially competitors, and that physicians are averse to giving up tools with which they have grown comfortable.
Meanwhile, Oracle will be inheriting a specific headache: Cerner’s massive and so-far snafu-riddled involvement with the Veterans Affairs Administration and the Department of Defense.
In 2021, Cerner received massive funding to deploy its electronic health record systems for both agencies. Reviews of the initiative revealed problems that affected patient safety, compromised productivity, increased costs, disrupted scheduling and delivered overall disappointing performance. Cerner experts rushed to Capitol Hill to explain and reassure and the project is now moving forward. But Cerner clients have reported a drop in support and product enhancement capabilities because of the resources the company has had to devote to these projects. Now, Oracle will share ownership of this mess and Cerner customers cannot be sure if they will receive the support to which they are entitled.
There are other intangibles that will play into future decisions about whether to stay with Cerner. We’ll consider them in the next installment.
Justin Campbell is vice president of Galen Healthcare Solutions.