In a move that promises to shake up the healthcare industry, Oracle this month announced a bold vision after acquiring health IT giant Cerner for more than $28 billion.

The combined companies will soon create a national health records database that pulls data from thousands of hospitals, said Oracle cofounder Larry Ellison. This system will make it easier for healthcare providers to access patient data, and patients will have more control over who can see their information.

"We're building a system where all American citizens' health records not only exist at the hospital level, but they also are in a unified national health records database,” said Ellison, the company’s board chairman and chief technology officer, during a press briefing after the merger was completed.

Ellison outlined the well-known challenges with the U.S. healthcare data infrastructure, including siloed information within individual institutions. It's difficult for physicians to know about their patients when treated at other hospitals.

It also makes it challenging for research teams at public health agencies to conduct studies on big groups of people, since they're frequently restricted to the patient data available within their hospital network, he added.

The national healthcare records system that Oracle is planning would be a way to pool all this data together in an anonymous format, making it available to healthcare providers and researchers while still protecting patients' privacy.

Is cloud expansion the key?

Oracle reported revenue growth on the back of cloud infrastructure services and SaaS sales and is looking at a massive cloud region expansion.

Oracle projects that its cloud business is set to grow from 22% to 25% in U.S. dollars for the entire year. The total cloud increase, including Cerner, is anticipated to rise from 44% to 47%.

As I have stated before, there will be a shift away from Cerner's usage of Amazon AWS for their population health platform towards OCI, or Oracle Cloud Infrastructure.

The hope and expectation is that transitioning toward OCI means moving away from custom programming language while developing a solution using modern software code built natively on a cloud environment.

But this is not an easy lift and shift, and requires new development.

National patient identifier needed

Many healthcare IT experts remain doubtful in the wake of the national database announcement. Experts in health technology and the federal government have spent years, if not decades, attempting to achieve this goal.

Even when systems communicate with each other, it is difficult for them to do so adequately. If we reflect on the past two years of trying to create a COVID-19 registry, for instance, that was a painful experience across different states and counties.

The key here is not the technology. Adoption of a unique identity system is the key.

I applaud Oracle for this bold vision. It’s a huge undertaking. And it's unclear at the moment exactly how Oracle plans to make it happen.

But if it works, the Oracle-Cerner merger could prove to be the closest partnership yet of marrying big tech with a healthcare software company. And it could mark a major step forward toward making more widespread interoperability a reality across the U.S. healthcare industry.

David Chou is an accomplished technology executive with deep experience in the healthcare space in the for-profit, non-profit, academic medical center, pediatric hospital and ambulatory settings focusing on value-based care. He has experience leading complex organizational transformations and digital solution integrations for global and regional organizations in a highly regulated industry.