'That complexity has a tendency to eat you alive:' Technology companies face a massive challenge as they move into healthcare

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'That complexity has a tendency to eat you alive:' Technology companies face a massive challenge as they move into healthcare

Cerner President Zane Burke

Cerner

Cerner President Zane Burke

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  • The lines around healthcare are being redrawn, with mergers that combine pharmacies with insurers and doctors with health plans. At the same time, big technology companies have started taking a greater interest in healthcare.
  • Cerner's confronting those changes by finding technology partners, which Cerner President Zane Burke believes is a better strategy than technology companies trying to go it alone.
  • "That complexity has a tendency to eat you alive," Burke said, referring to tech companies that don't truly undestand healthcare data.

The lines around what defines a healthcare company are getting blurred.

For one, companies are merging like crazy: Pharmacies are acquiring insurers. Hospitals are getting into the drug business. Insurers are starting to own doctors' offices. Insurers are buying one of the largest standalone pharma middlemen. And retail giant Walmart's reportedly been in talks to buy Humana.

For another, tech giants are getting more and more interested in healthcare. For example, Apple's going to start putting medical records onto iPhones, and there has been speculation about how Amazon could get into the pharmacy business. Already, Amazon's teaming up with JPMorgan and Berkshire Hathway to form a new independent nonprofit venture aimed at lowering healthcare costs for their employees.

It's putting companies that make the software that connects all the different aspects of the healthcare system through electronic health records in an interesting position.

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"We're increasingly looking for partners along the way," Zane Burke, the president of health information technology giant Cerner.

For example, Cerner's working with Salesforce on customer relationship management automation. Cerner's also working with Apple on its personal health records. Should patients want to see their information on their phones, Apple can work with Cerner's electronic medical records to pull that in.

Burke's less convinced that big tech companies can go it alone in health IT, based on how things have gone in the past.

"Big caps have gotten into this business before, multiple times, and have gotten killed every time," Burke said. Companies like Google, Microsoft, and IBM have tried to get into the health IT space over the past few decades, but ultimately haven't stuck around. Google Health, for example, had built a personal health information service, but the project was shut down in 2011. Microsoft recently decided to abandon its HealthVault Insights program, which was meant to give patients a better picture of their medical records and health.

"And I'm not saying the next big cap that gets in is going to get killed, I'm just saying there's a reason why people have not succeeded in the past. And it's because of the complexity, and understanding the depth of healthcare," he said.

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The stumbling block as Burke sees it: how complex healthcare data can be, especially when it comes to privacy issues, and interoperability challenges that make it difficult to get data from one hospital to another.

"That complexity has a tendency to eat you alive," Burke said, referring to technology companies which may not truly understand healthcare data.

But it puts companies like Cerner in a good spot, Burke said. "We have a number of folks that want to work with us, and we just want to be very careful about picking the right partners that help us advance the ball the fastest, and deliver the most value for our clients, and that'll take care of our shareholders," he said.

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