Labcorp Selects Oracle Cerner to Streamline Lab Workflows

New arrangement may give Cerner access to significant lab data at dozens of hospitals

THERE IS A UNIQUE CORPORATE COLLABORATION unfolding that involves Labcorp and Oracle Cerner. Announced in November, Labcorp will use Oracle Cerner’s lab information systems to update clinical laboratory workflow processes and support the sharing of patient data across healthcare organizations. 

The Labcorp/Oracle Cerner arrangement also intends to demonstrate that the collected health data from hospital laboratory information systems (LIS) can serve as valuable currency. 

Highlights of the Deal 

In a blog post on its website, Oracle Cerner in North Kansas City, Missouri, detailed its agreement with Labcorp in Burlington, North Carolina. Among the highlights: 

  • Oracle Cerner’s LIS will help Labcorp streamline clinical laboratory workflows and processes at a hospital system’s labs across 10 states. 
  • The collaboration will allow Labcorp to expand and standardize the labs’ existing technologies, which will support diagnostic data sharing across the providers in these systems. 

Unsaid in Oracle Cerner’s announcement—though likely a prime motivation—is at least some level of access to Labcorp’s laboratory data through the LIS setup. 

Patient data, even if anonymized, is a highly sought-after resource for technology companies because of the information’s value in personalized medicine and artificial intelligence. (See TDR, “AI Fuels New Efforts in Computational Pathology,” Oct. 10, 2022.) 

Cerner’s blog noted that the deal involved “one of the nation’s leading nonprofit Catholic health systems,” a description that fits that of Ascension Health. 

Ascension is a Catholic health system based in St. Louis that operates 142 hospitals in 19 states and the District of Columbia. Labcorp signed a deal in 2022 to manage at least 75 inpatient labs at Ascension hospitals, and to acquire the laboratory outreach business at a number of Ascension locations. (See TDR, “Labcorp to Buy Outreach, Manage Ascension Labs,” Feb. 22, 2022.) 

The outreach agreement alone was worth $400 million. It was one of several lab outreach deals Labcorp signed over the past six years. Commercial lab companies hope to encourage more such transactions as hospitals facing steep financial losses look for a sizeable inflow of cash. 

Most recently in August, Labcorp acquired the lab outreach business of RWJBarnabas Health in New Jersey. 

Few Public Comments 

Oracle Cerner did not return a request for comment. Labcorp declined to make anyone available to The Dark Report to interview.

However, Labcorp CEO Adam Schechter dropped some details about the Ascension deal during a fireside chat at the J.P. Morgan Healthcare Conference, a private event for the investment firm’s clients that took place Jan. 9-12 in San Francisco. A recording of his appearance was posted to Labcorp’s investor relations website. 

“We are now running the labs for almost 100 hospitals across the Ascension hospital system,” Schechter said. He also noted that his company transitioned approximately 5,000 former Ascension employees, many of them likely lab workers, onto Labcorp’s payroll. 

Implementing Automation 

A big goal of the Ascension deal is to maintain and eventually improve test turnaround times for patients. “We have to make sure there’s a smooth transition as we go from the hospitals’ laboratory systems into our laboratory systems,” Schechter said. He did not mention working with Oracle Cerner, but it is reasonable to assume Cerner is playing a role in this transition. 

One of Oracle Cerner’s goals in the partnership was to minimize manual interactions with technology in favor of auto-verification features and automatic reporting of test results. Doing so will lead to faster diagnostic decisions, the company stated. 

Labcorp’s efforts to streamline lab operations at Ascension hospitals will likely take several years to fully carry out, Schechter noted. “Over time, we’ll find ways to combine procurement and to ensure we have consistent systems across the hospitals that will make them more efficient,” he added. 

Whether the Labcorp deal plays into Oracle Cerner’s long-term plans remains to be seen. 

In June, during a virtual presentation by Oracle, Chairman and Chief Technology Officer Larry Ellison outlined plans for Cerner’s products. (See TDR, “Oracle’s Plans for Cerner Might Increase Value of Lab Test Data,” June 27, 2022.) 

At the time, Ellison mentioned that Oracle planned to develop a cloud-based, national health records repository on top of thousands of existing electronic health record (EHR) systems at hospitals. 

Oracle’s Long-Range Goals 

With the amount of laboratory diagnostic results stored in EHRs and LISs, digital patient data has become valuable to Oracle and other technology companies in terms of patient treatment and anonymized testing information. 

Entrepreneurial clinical laboratory managers and pathologists may want to explore the ramifications of the deal between Labcorp and Oracle Cerner. Inspired by this arrangement, it could be that other LIS vendors may get creative in striking new deals with clinical laboratories over diagnostic data, with the goal of creating a new revenue stream for both partners to the arrangement. 

Oracle–Cerner Deal Was Worth $28 Billion 

ORACLE CERNER IS THE NEW NAME of the former Cerner Corporation. Oracle acquired Cerner in late 2021 in a blockbuster deal worth $28 billion. (See TDR, “Oracle’s $28b Cerner Deal Shows Value of Health Data,” Jan. 31, 2022.) 

At the time, the hype of the acquisition centered on Cerner’s Millennium electronic health record (EHR) system. That system gained prominence over the prior decade as the federal government offered financial incentives to hospitals to install EHRs. 

The move by Oracle to acquire Cerner—one of the nation’s leading provider of EHRs and other types of clinical information systems—was widely seen by Wall Street analysts as a smart way for Oracle to enter the market for healthcare information systems. It immediately gave Oracle access to the pools of patient data maintained by Cerner clients throughout the nation. The novel new collaboration with Labcorp shows Oracle is ready to act.

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