Must read: Oracle’s ‘deadly gamble’ on Cerner (new with audio file!)

Larry Ellison’s $28 billion bet on Cerner is drawn and quartered in this Must Read. If any further confirmation is needed that Cerner was the proverbial pig-in-poke for Ellison’s Big Vision of welding all that Cerner EHR data with Oracle’s massive technology, it is right here. Ashley Stewart and Blake Dodge, writing for Business Insider, do a masterful job of painting how badly Ellison and Oracle misjudged what they were getting into with what proved to be Cerner’s “broken and dysfunctional system” that in the VA implementation has been put on hold, with one exception, for a year or maybe more.

What Ellison thought he was buying in 2021 could be summarized by what he said at Oracle CloudWorld in fall 2023. FTA: What if, instead of guesswork, doctors could lean on generative AI to comb through a patient’s medical records, along with those of millions of other patients? With such a massive database, doctors could spot the warning signs of disease faster, reduce the need for trial and error, and make better-informed decisions about treatment. In other words, pump all that massive data into Oracle’s AI models and watch all that data, now going to waste, transform healthcare.

The problem was Cerner itself. Its EHR was not the wonder that Ellison saw circa 2005 when he first approached them and was rebuffed as a Silicon Valley interloper. It had become a system that wore lead boots compared to Epic. In the provider market, it was sinking to a distant #2. But one revelation in the article is that by 2020 Oracle saw Cerner as a must-have. As a smaller system, it was perceived as more interoperable between health systems, providers, and with third parties. Data would be more readily accessible. Pandemic-era relaxations on data sharing further loosened restrictions on access. The looseness appealed to Ellison and Company–and Cerner’s book of business would also help Oracle compete in cloud computing with Amazon (AWS) and Microsoft.

But Healthcare Reality dawned with the first implementations in the VA that started in 2020, a big win that turned into a rolling disaster that led to unknown queues, vanishing prescriptions, records, and appointments, and much more as chronicled here in the past four years, by Congressional investigations, and the VA’s OIG. No, the problems weren’t easily ‘fixable and addressable’ in Mike Sicilia’s (Oracle) words to Congress in hearings shortly after the acquisition closed. In fairly short order, the rollout came to a screeching halt after thousands of Oracle fixes, with only five systems implemented through last June, no end of disasters, patient deaths, and exacerbated illnesses. Other than the Lovell/MHS joint facility March rollout, there will be no further installations planned by the VA until the next fiscal year that starts in October. The most optimistic timeline for resumption is by end of this calendar year. As Congress is making clear, without proof of improved performance par with VistA in the current systems, do not hold your breath for any new ones.

An additional revelation in the article is that over time, VistA had become so customized to each VA medical center that Cerner could never meet those demands expected by the staff. It stopped trying, leading to more dissatisfaction. Perhaps that standardization looks good at the 40,000 foot level, but there were reasons for the customizations based on the veteran population and practice. Things that took two minutes in VistA now took ten in Cerner–if you were lucky. In the closed VistA system, those customizations were passed around other centers and regions–in VA-speak, Veterans Integrated Services Networks or VISNs. (Editor’s note: recalling from one of her former companies, any IT vendor implementing a system VISN by VISN soon learned about each one’s unique demands at multiple levels.)

“Oracle is still learning what they have actually acquired from Cerner,” according to an Oracle executive quoted in the article. The VA has become a ‘shackle’ trapping the Ellisonian Grand Vision of Oracle’s Transforming Healthcare–in time for him to enjoy his victory. Cerner’s slide to a distant #2 has reduced All That Data that made Cerner worth $28 billion, adding to a crushing debt load that this Editor and others noted in 2022. Layoffs and freezes haven’t made much difference, but have led to the loss of experienced Cerner support. The VA failures and drain of resources to fix it, the vacuum in support, and technical problems have led to, in a Providence system executive’s words, the perception that Cerner is ‘circling the drain’. And perception becomes reality. Health systems are choosing the costly route of moving now rather than later. The article mentions two major systems defecting to Epic, Intermountain and UPMC, but they are only two out of the 12 that announced in 2023. 

The narrative succeeds in bringing together many threads, but most of all in bringing to life the dry facts of Cerner’s many patient failures in the VA, including the individual deaths from the unknown queues [TTA 18 Mar 2023] and the human story of the Two Charlies–Charlie Bourg (himself affected by the unknown queue) and Charlie Monroe, both veterans near Spokane’s Mann-Grandstaff VA medical center. They advocate for veteran patients affected by the Cerner EHR’s many flaws.

One of the flaws not mentioned is Cerner’s odd lack of concentration on training criticized by Congress in 2023 [TTA 19 Apr 2023]. Another sequel or extension to this article could delve into the DOD-Military Health System’s implementation, a Leidos-Cerner project that has had few of the reported problems of Cerner Millenium in the VA. This was quoted by a former VA official as a ‘terrible decision’ that knocked onto the VA in implementing into a much larger and more complex healthcare system. Hat tip to HIStalk 5/22/24

Editor’s Closing Note: A wise doctor told me once that most errors in practice are made at the beginning and at the end of one’s career. In business, your Editor has seen this parallel happen time and time again. Even the smartest of chairmen and CEOs, when they stay too long at the fair, often make poor decisions. Is it age? Illness? No one left with the courage to tell them no, this is a bad move, this isn’t working? I think of the last years of Centene’s leader Michael Neidorff, 25 years in leadership, ousted by an activist shareholder. Mark Bertolini of Aetna, shoved aside from the merger with CVS he engineered. Frank Lorenzo, who created the biggest airline combine ever, Texas Air Corporation. Even legends like Larry Ellison at 79 may not be what they were. In attempting to capstone his storied career, and with the best of intentions in transforming the broken, dysfunctional healthcare system, has he made a gamble that could bring Oracle to its knees?

Listen (for the first time!) to Editor Donna read this article with extra asides and comments (plus a small flub or two). Now on Soundcloud.

Our view from last week: Is Oracle Health’s Big Vision smacking into the wall of Healthcare Reality? Their business says so. 

Categories: Latest News.


  1. Natalie

    It is a massive undertaking to change the healthcare EMR functionality of today. But it must be done. It can be done. I can see it too. I say to Larry Ellison, you keep at it! … With all the AI coming up I think you are going in the right direction. Throw everything you have at it because when you figure it out, it will change not just the VA but the world!

  2. David Flood, M.D.

    As an orthopedic surgeon, I have used both systems. I like Cerner more than Epic. I hope Mr.Ellison and his team can get this to work out.