Hi Chuck! Can you please introduce yourself and your role?

“Chuck Whinney, Vice President of Healthcare Strategy at Infor. As former business practitioners within health systems, our team is responsible for being the voice of the healthcare client within Infor and ensuring we add value to clients well into the future.”

Tell us about your education and career path.

“I have a BS in Computer Information Systems from the University of Scranton and an MBA with a concentration in Finance from Villanova University.

"After grad school I worked for a consulting firm primarily made up of ex-Arthur Andersen consultants. We specialised in the management consulting and implementation of Financial Planning and Analysis processes, which typically included Financial Reporting solutions as well. This is typically done with a class of software called Enterprise Performance Management (EPM). After merger and acquisition activities, EPM is often one of the first initiatives organisations will perform, so that they can produce the new organisations’ required consolidated reporting, and monitor its performance against forecast targets often committed to in order to get the M&A funded.

“After about eleven years of experience with six different vendors’ EPM products and seeing how each did or didn’t facilitate the ideal business operations for clients, I realised that there was an inevitable convergence of the EPM and ERP (General Ledger, supply chain, and HR) classes of software that would fundamentally improve the CFO’s visibility to how their organisation was performing while maintaining the timeliness and auditability of the underlying ledgers. I joined Infor to work to align with this future.”

What led you to this industry?

“I absolutely love designing solutions that simplify complex problems. After three to four years of crossing industries, including industrial manufacturing, distribution, non-profits, and general corporate consolidations, I gravitated towards health systems. From a business operations point of view, healthcare provider systems represent many diverse lines of business that combine many of the most significant problems from all of those other industries - often with an added splash of grants, state and federal government ownership, insurance plans with corporate customers and university affiliations to boot.

“Solving this extremely complicated puzzle with many pragmatic ramifications is really appealing to me.”

How will the Oracle and Cerner acquisition impact the quality and affordability of healthcare?

“At this time, I do not see a notable impact because it appears to be a relatively closed-ecosystem approach. The primary value proposition Oracle is going after is the result of having consolidated health records; however, currently, we do not know how they plan to consolidate records from non-Cerner implementations.

“There is certainly value in healthcare professionals, besides your primary care physician, having access to your comprehensive patient record. If you’re injured on vacation, we want the Emergency Department physician to know our medical history in case it changes how they should care for us. The quality of care we receive would be better if they knew whether we were allergic to penicillin or had formerly strained a muscle.

“That said, there are two caveats to note firstly, this is an exceptional use case, as we spend most of our lives around our homes where we’re more likely to have an emergency and land in our primary health system anyway, and secondly, wearables are already circumventing some of these challenges. For instance, anyone with an Apple device connected to their health system can click the “share with your doctor” within Apple Health regardless of the EHR vendor. So, this use case may not be as compelling in practice.

Oracle has stated they want to leverage this data to improve the quality of clinical trials via access to more diverse patient health data. 

“I certainly find this use case more compelling in its attempt to improve both the quality and affordability of healthcare; however, while Cerner has a great EHR product, they aren’t even the largest EHR provider by market share in the US. Many clients I talk with have multiple EHRs due to their activity. As such, wouldn’t supporting clinical trials be significantly better facilitated via a centralised and highly secured EHR-agnostic data sharing ecosystem?

“I respect that the primary buyer of an EHR is the clinician, and their primary focus is rightfully most directly aligned with the health system on providing care; however, I was hoping to hear a bit more about how fusing business and clinical systems together could add value in care quality and affordability. Considering the business systems are where the expense of care is recorded and monitored, from a care affordability point of view, I found it very interesting how little the business systems were addressed in Oracle’s Future of Healthcare event on June 9, 2022. 

“While they talked about a handful of business capabilities, many of which would drive value to caregivers, we didn’t hear anything that plenty of other organisations aren’t already working to facilitate without having both an EHR and ERP in their portfolio. They also left it open-ended on how they plan to facilitate the over 80% of the market represented by Cerner clients on a non-Oracle ERP or Oracle ERP clients on a non-Cerner EHR.”

How will the merger impact Cerner customers that rely on AWS services today?

“Short-term, I don’t foresee any issues and expect Cerner health systems hosted in AWS will see everything continue to operate as usual. 

“Medium- and longer-term, we can definitely anticipate that will shift. Oracle is fundamentally a tiered provider (from the bottom-up) of Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) capabilities. To maximise the consolidated revenue and margin they can tout to Wall Street, Oracle needs as many of their PaaS and SaaS clients to fill up those IaaS servers as possible.

“So, the first option will be to host Cerner directly within Oracle’s servers so that they can reduce the number of checks they’re writing to AWS, thus giving away their margin. This won’t directly impact.

“Cerner clients on AWS, and it will likely be years before they force clients to make a move. Down the road, we will likely see Oracle doubling down on their platform infrastructure to further ramp up margin via economies of scale within development and support.

“This will primarily occur via the concept software vendors and industry analysts call ‘platforming’, which is where you very consciously say: ‘Instead of building a capability into a single application, if I were to build it at a lower level and into the underlying platform itself, then any application running on that platform can take advantage of it.’ For example, lots of applications send emails to users. Instead of building distinct email capabilities into every application thus requiring every individual application team to own their own flavour of email capabilities, one can build a single email capability at a platform-level that any application can leverage. This provides economies of scale in your development capacity, even across otherwise distinct applications.

“In the Oracle/Cerner model, Oracle likely already has an email capability baked into a platform-level, while Cerner likely has one or even several distinct email capabilities built at the application-level. The advantage to Cerner historically of leaving something like emails at an application-level is that they aren’t beholden to any specific platform - AWS, or client-hosted. Emails still work in either.

“Meanwhile, Oracle may determine at some point in the future that they no longer want to maintain all the distinct email capabilities. They aren’t likely to deprecate them all together, however, certainly, their development of them will slow dramatically. Eventually, they may say, if a client wants our latest and greatest email capabilities, they need to be leveraging Oracle Cloud’s IaaS, which effectively means Cerner clients would then have different roadmaps depending on if they’re on-prem, hosted in AWS, or hosted in Oracle Cloud. All three could feasibly have different roadmaps. This isn’t without precedence. In 2007, Oracle paid US$3.3B for Hyperion and in the 15 years thereafter there have been multiple rounds of moving clients to re-purchase perpetual licences, and/or migrate hosting methodologies. 

“In my former life, I had a lot of business from clients frustrated with Oracle for making perpetual software licensed clients effectively re-purchase new perpetual licences to maintain support.”

How will Cerner be organised as part of Oracle? Stand alone or integrated?

“At least for the time being, Oracle is stating they’ll largely be stand alone. While I see that being the case going forward for “core EHR” application-level responsibilities, a standard process of any merger or acquisition is that the acquirer is always looking to cut expenses via economies of scale. The most obvious two targets are shared service opportunities and in the rationalisation of similar products.

“Shared services-wise, the primary opportunities are typically in non-revenue-generating back-office activities. Whomever Oracle deems as the most efficient and scalable option for each of the Accounts Payable, Accounts Receivable, Payroll, and Human Resources departments will very likely come out as the merged organisation’s shared services provider. Perhaps a few people from the other organisation will move over as subject matter experts, but this isn’t always the case. Logistically, this may take some time as incumbent HR benefits contracts expire and things like AP Vendor lists are merged, but often there are formal projects that would already be starting to do these migrations to a single internal shared service provider.

“Product rationalisation occurs when the merged entity looks at any similar product capabilities between the two organisations and determines what the unified strategy for that capability will be going forward. Cerner and Oracle offer different enough applications that there are not any significant rationalisation activities I’d expect from an app-POV. That said, Cerner will undoubtedly have platform-level capabilities that would likely see some change.”

How will business clinical systems be better integrated as we move forward?

“Considering the fragmentation of each of the EHR and ERP markets, in a word… openness. 

“The goal of these integrations should be timely analytics that clearly defend the direct attribution of expenses to their corresponding care events, regardless of which business or clinical system they originated in.

“Thanks to data standards like HL7 and FHIR, this openness is most reasonably facilitated by clinical interoperability engines that can support the timely marriage of business and clinical data.”

What transformations would you like to see in healthcare within the next 12 months?

“There are significant opportunities to enable healthcare provider organisations to make more informed decisions regarding where and how to deliver care by more directly correlating costs to more granular patient cohorts. Considering how CMS is continuing to evolve value-based payments, I believe we’re no longer asking, “Will this occur?” but rather “When and how will this occur?” While I don’t think anything substantial will occur in the next year, I’m optimistic we’ll start to see software vendors make announcements of forthcoming capabilities that support more realistically implementable, defensible, and automated cohort and case costing regardless of the business or clinical systems a given health system happens to leverage.

“It cannot end there though. When considering the impacts on the entire care delivery ecosystem, reducing reimbursements will eventually impact the supply and demand curves that influence our caregivers and the health systems they work for. This then brings two connected longer-term concepts that I’d love to see progress on in the next year.

“First, if we’re going to leverage lower reimbursements to effectively drive scrutiny of the expenses of delivering care, then in parallel we’re also going to need to support reductions in our providers’ expenses. Malpractice insurance costs via tort reform are one of the first areas I’d look for opportunities, and one area I hope to see some evolution.

“Second, we knew well before the pandemic that the U.S. was facing upcoming shortages of nurses and family practitioners that COVID-19 has only exacerbated. There simply aren’t enough caregivers to support the level of care that patients need. The laws of supply and demand kick in, and travel nurses and overtime drive the overall cost of care up, not down.

“Meanwhile, many studies directly correlate mental and physical health. While it’s certainly a longer-term investment, there is compelling evidence that investments in mental health initiatives would drive better physical health conditions, which would reduce preventable physical health conditions, which would reduce the demand that our caregivers currently cannot keep up with. 

“If we cannot increase the supply of caregivers in a cost-effective way, let’s do what we can to reduce the demands on them.”