The DOD-MHS/VA Lovell ‘success story’ can’t process 60% of pharmacy prescriptions: House Committee

July 24, 2024 | by

Here we go again. The Department of Defense’s Military Health System (MHS), the Department of Veterans Affairs (VA), and Oracle have all cited the Captain James A. Lovell Federal Health Care Center in North Chicago as a successful joint implementation. It is the only joint, fully integrated MHS/VA facility, was the only exception to the full pause on Oracle Cerner implementations in going live on 9 March, and so stands alone in complexity and importance. Oracle EVP Ken Glueck, in excoriating Business Insider, pointed to Lovell as a successful implementation to prove It Could Be Done! [TTA 31 May].

Except…except. House Representative Matt Rosendale (R-Mont.), the chairman of the House Committee on Veterans’ Affairs Subcommittee on Technology Modernization, a skeptic from Day One, investigated with other committee members. Several unnerving findings: 

  • “The pharmacy is completely reliant on outside help to operate”. 
  • “The Oracle Cerner pharmacy software functions so poorly that the permanent pharmacy staff can only process about 40% of the prescriptions.”. That means 60% of prescriptions go unfilled.
  • “The Committee staff visited James A. Lovell twice, and the employees are reporting the same frustration, hypervigilance, and burnout that the managers of the other four facilities testified about last September.”
  • 100 new staff have been hired at Lovell, with another 100 on the way.
  • About 800 experienced staff from other facilities and VA’s central office pitched in after the 9 March go-live.

Rosendale, in his opening remarks, expressed great concern that VA Secretary McDonough could realistically resume Oracle Cerner EHRM go-live at any scale, given the Lovell experience. He also noted that “the Veterans Health Administration is facing a $12 billion budget deficit, the financial impacts of the EHR on the organization’s staffing have never been budgeted or seriously reckoned with.” 

His conclusion was strong language: “Veterans and taxpayers deserve to know how large the Oracle Cerner bill truly is. Congress as well as the public need all of the information in order to make an informed decision about whether this is worth it, and whether the inevitable sacrifices are truly justified. Anything less is dereliction of duty.” Hat tip to HIStalk 7/24/24

Oracle’s Q4/FY 23 earnings push Cerner to background, stock price soars on AI deals; 81% of VA clinicals really can’t stand Cerner

June 13, 2024 | by

Oracle keeps blue side up but disappoints Mr. Market, Cerner results now fall into the background as stock price soars despite misses. Oracle kept it upbeat in reporting its Q4 and FY2023 results this past Tuesday 11 June, and it paid off.

  • Its Q4 revenue of $14.3 billion was up 3%, with Q4 GAAP earnings per share was $1.11 while non-GAAP (adjusted) earnings per share was $1.63.
  • FY23 revenue totaled $53.0 billion, up 6%, with GAAP earnings per share at $3.71, while non-GAAP earnings per share was $5.56. 

Overall results were disappointing for Wall Street analysts. The blue side is that the stock has surged big time with a YTD high yesterday, closing above $140. The secret sauce? New AI-related contracts and demand for Oracle Cloud Infrastructure. On the call and in the release Oracle CEO Safra Catz announced new cloud sales to Google and Microsoft for OpenAI and ChatGPT. OpenAI will run deep learning and AI workloads on Oracle Cloud. Oracle also sold 30 contracts worth $12 billion in Q4.

The surprise on the call for this Editor? The Cerner business will no longer be identified and broken out, which is major league unusual for a specific, large product line. From HIStalk News 6/12/24: CEO Safra Catz said, “I will no longer be breaking out the Cerner business in my results. And even though it will begin to grow modestly throughout the year in both revenue and operating margins, it’s not necessary to break it out anymore because it is now operating in a growth mode.” A way of concealing ongoing bad news? Major hat tip to HIStalk on the earnings call summary, Investors Business Daily, Oracle earnings release

Not that many at the VA, MHS, or elsewhere actually like Cerner. An internal and unpublished survey for the Department of Veterans’ Affairs (VA) by KLAS, obtained by Bloomberg News, reported results for Oracle Cerner, and they were close to disastrous. On the metric “Users who feel the health software enables “high-quality care”, here were the results on positive answers by the doctors, nurses, and other users of Oracle’s EHR:

  • 19% for VA Oracle Cerner
  • 30% for DOD Oracle Cerner (MHS–Ed.)
  • 49% Average US Oracle Cerner
  • 71% Average Epic Systems Customer

That means that 81% of VA users, in the five facilities and offsite center where it’s been deployed, now for over a year and with consultants over it like paint on a brand new car, believe the Oracle Cerner system does not do Job #1 of healthcare–enabling high-quality healthcare. “There is a trend toward improvement, however, most users still indicate a negative experience,” according to VA researchers quoted in the report.

The other big surprise is that 70% of MHS users believe exactly the same. MHS is the ‘success story’ implementation, jointly with Leidos, and now complete. (Ken Glueck, please take note)

KLAS also contrasted this to their existing information for US EHR users. 49% of Cerner US users believe it facilitates high-quality care–contrasting unfavorably with 71% of Epic customers. However, these numbers are not comparable to either the VA or MHS as most hospital systems have been in place for years/decades, and have had abundant time to shape them against system needs plus work out the inevitable ‘bugs’. But the performance of Cerner versus Epic on this metric translates to preference in the small world of healthcare. 

Drilling down into the survey:

  • About 22% of VA respondents said their training on the new system was helpful
  • About 45% said they had received communication about why the VA was moving to the new EHR

The survey was conducted in March-April 2024 as part of VA’s ongoing evaluation of the Oracle Cerner EHR. Responders were 2,000 Cerner EHR users, with a 25% response rate of those solicited. The report was for VA leadership and for Congress. In a response to Bloomberg, Terrence Hayes, press secretary for the VA, said “That’s why we conduct surveys like this: to better understand the experience of our providers in the field, so we can make the EHR better for staff and veterans alike.”

Seema Verma has a long and troubled row to hoe to make this work for VA, MHS, and all Cerner users. Nowhere to go but up. Becker’s

Mid-week update: Cano Health CEO finally booted, interim named; further information on Oracle Cerner layoffs

June 21, 2023 | by

Cano Health CEO Marlow Hernandez stepping down, but remains on Cano’s board of directors. It looks like Florida-based value-based primary care provider Cano Health is finally starting to clean up its act. The fallout from the long-delayed shareholder meeting taking place last Thursday (15 June) was that the Cano 3 (resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold), finally got their way with ousting Hernandez. Mark Kent, who was named chief strategy officer in April, will be taking over as interim CEO while the board performs an external search. No time frame was specified.

Hernandez’s departure was not a surprise since Cano had a miserable Q1, with a $60.6 million net loss versus 2022’s barely-there $100,000. Their adjusted EBITDA was only $5 million, compared to $29.2 million in Q1 2022 [TTA 12 May]. Their new chairman of the board, Sol Trujillo, also has a background in turnarounds.

The Cano 3 own about 35% of the shares and one, Barry Sternlicht, invested at least $50 million in the cracked SPAC’s PIPE. They started to push for change back in April. Today (20 June), they issued a statement approving of Mark Kent’s interim appointment though they were not able to prevent the reelection of directors Alan Muney and Kim Rivera as they urged shareholders to do in a 15 June public statement. 

Despite the ouster, the Cano 3 still have plenty of disagreements with how the company is run, nailing these to the door in their 20 June statement responding to what they called an “Offensive Friday Afternoon “News Dump” Regarding its Leadership Transition”:

  • Per his employment agreement, Hernandez is required to step down as a board director now that he is no longer CEO. “Dr. Hernandez’s employment agreement plainly states that ‘the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason.” They also cite a “history of insider dealings and fiduciary delinquency.”
  • They demand that directors Angel Morales, Dr. Alan Muney, Kim Rivera, and Solomon Trujillo resign immediately as “Dr. Hernandez’s enablers for far too long”. The board permitted the reelection of directors Muney and Rivera despite 82% of shareholders withholding their votes, citing Cano’s post-meeting statement. 
  • Shareholders now must entrust the selection of a new CEO to a board that is not reflective of the majority of shareholders who have lost over 90% of their share value, and not collaborating with the Cano 3 on reforming the board and a new direction of the company. “In fact, it rejected our Group’s two highly qualified director candidates and a proposal to collaborate on a credible refresh of the Board. We are left to question whether Dr. Hernandez and his boardroom allies are continuing to box us out because they are hiding something nefarious. If not, we urge the Board to immediately align with us on a path forward that includes the addition of our candidates – Guy Sansone and Joe Berardo, Jr. – and other essential changes to leadership and strategy.” Both Sansone and Berardo are very senior executives with long, successful records in leading healthcare services and startups.

(Cano Health shares closed at $1.42 today, a decent bump from their valley last week.) To be continued….  Healthcare Dive

Last Friday, TTA was one of the first to cover the Oracle Cerner layoffs (along with HIStalk) affecting the Cerner Federal teams. This week’s coverage elsewhere confirmed that the layoffs were a minimum of 500 to possibly 1,200, plus rescinded job offers and reduced open positions as this Editor saw from employees posting on the Reddit group. They–in particular, The Register (below), confirmed where this Editor would not go in cause-and-effect–that the layoffs were largely due to VA holding further implementations after multiple failures in the five VA systems where it was implemented between 2020 and 2022. The layoffs were also due to the Department of Defense (DoD) Military Health System (MHS) implementation as largely completed, although not glitch-free. It’s a clear cleanout of what Oracle perceives as a problem. 

Oracle did not respond to these publications’ requests for comments.

The new contract’s focus is to fix these five and implement a sixth (James Lovell in Chicago) which is joint with MHS by 2024. This has to be accomplished before implementation starts in the 160 remaining centers plus satellite medical clinics (CBOCs). VA has much leverage in the five one-year terms and the monetary penalty structure [TTA 18 May]. The pressure to perform for an awakened VA–and Congress–is going to be intense on those remaining, and whomever is shifted over from Oracle. This Editor also noted speculation that Oracle Cerner may start to wash its hands of the just-renewed VA EHR implementation by outsourcing most of it.  The Register, Becker’s, Healthcare Dive   TTA’s coverage of the Cerner/VA implementation here.