Oracle said on Monday that it has reached an agreement to purchase Cerner, a prominent electronic health records company, for $28.3 billion. The purchase by Oracle, a database behemoth, is the company’s largest-ever acquisition and is an indication that several big technology businesses regard health care as a growth prospect.
Cerner sees the transaction as more than just a payment; it is also a merger with a wealthy owner at a time when the market for digital medical information is becoming more competitive and technologically advanced.
According to KLAS Research, which follows the health care sector, Cerner is the second largest player in the electronic health record business, with a 25 percent share of the market in 2020. According to the study group’s findings this year, Cerner was losing ground while Epic, which had a 31 percent share of the market, was rising.
In the same way that other sectors are embracing cloud computing technologies, the digital patient record industry is following suit. According to experts, both Microsoft and Oracle view the enormous health-care industry as a way to expand their positions in the cloud sector, in which clients access faraway data centres and often pay on a pay-for-use basis for the services they get.
Microsoft is the second-largest cloud service in the world, behind Amazon. Earlier this year, Microsoft agreed to spend $19.7 billion to acquire Nuance Communications, the world’s leading provider of voice-recognition software, which is used in hospitals, clinics, and physicians’ offices.
Oracle was a little late to adopt cloud computing for its database and workplace applications in the beginning, but it has made significant progress in recent years.
Cerner’s new chief executive, Dr. David Feinberg, has taken a bold step forward with the acquisition. Dr. Feinberg comes to Cerner from Google, where he served as the leader of the company’s health technology section. Despite the fact that his relocation to Cerner was announced in August, he did not begin working there until October.
Doctor Feinberg stated in a statement that the combination with Oracle would provide Cerner with “an unprecedented opportunity to accelerate our work modernising electronic health records,” thereby improving the experience for physicians and nurses, as well as the quality of care provided to patients.
The Wall Street Journal reported last week that Oracle and Cerner were in the midst of discussions to form a joint venture.
Electronic health records are widely viewed as a must for bringing medicine into the digital era – a movement that, in the long term, is expected to boost efficiency, reduce costs, and provide better patient care.
However, the change has been tough, expensive, and time-consuming, having taken more than a decade. According to a research by the Mayo Clinic, which was referenced by Oracle, the majority of physicians and nurses now utilise digital records, yet they spend an average of one to two hours at their desks for every hour they spend seeing patients, on average.
The use of voice recognition and automated transcription has the potential to significantly cut the amount of time spent typing out patient information and doctor notes.
In their explanation of the purchase, Oracle officials emphasised the company’s voice assistant technology, as well as its cloud infrastructure, as assets that should aid Cerner in improving its products and services.
Oracle has acquired Cerner, a major technology business in the health care industry, which is a massive, albeit fragmented, sector. Other technological behemoths, such as IBM and Google, have had setbacks in the health-care sector in recent years.
Cerner, on the other hand, has a well-established presence in clinics and hospitals. “The ability to connect with industry sectors is the future of corporate software,” says Bob Parker, an analyst at IDC. As a result, Oracle has a significant presence in a critical section of the health-care industry.
The combination also has the potential to integrate data from Cerner’s digital records with Oracle’s data analysis and artificial intelligence technologies, allowing for the detection of trends and the prediction of successful therapies.
Cerner, which is in the digital patient record market, had another pitch for Oracle. The Oracle database serves as the foundation for its records, unlike those of other significant vendors such as Epic. They are powered by a specialised medical database known as Cache.