Oracle’s acquisition of Cerner faces significant challenges

Larry Ellison’s vision of revolutionizing medicine crystallized in his doctor’s office when he needed medication for cholesterol. His doctor prescribed him a statin called Crestor based on general factors such as age and family history. However, Ellison realized that this was just an educated guess. That moment sparked his idea: What if generative AI could analyze patient records along with millions of other people to better detect disease and guide treatment?

At Oracle CloudWorld, Ellison highlighted the integration of medical data with Oracle artificial intelligence models to revolutionize electronic health records (EHRs). This vision led to Oracle’s acquisition of Cerner for $28.3 billion in 2021, which managed EHR departments in a quarter of U.S. hospitals, including those run by the Pentagon and the VA. Ellison’s goal was to use Cerner data to create a futuristic EHR system that could improve patient outcomes and reduce costs.

Cerner’s Rocky Road to the Oracle’s Fold

However, Cerner’s integration was fraught with problems. The implementation of the system at the VA, serving 9 million veterans, was disastrous. More than 11,000 doctor’s orders disappeared in the “unknown queue”, causing patients to miss necessary treatments. These failures harmed 149 patients and contributed to three deaths. The futuristic health care system Ellison envisioned seemed far away, as Oracle needed to fix Cerner’s dysfunctional system to prevent greater harm to veterans.

Ellison first contacted Cerner two decades ago during the medical technology boom. Despite optimistic prospects for digitizing medical records, Cerner co-founder Neal Patterson was skeptical of Big Tech’s role in health care and dismissed Ellison’s progress. Years later, Cerner won significant government contracts for EHR systems at the Department of Defense and the VA. But Patterson’s death in 2017 and subsequent internal conflicts left Cerner vulnerable.

The fight for stability and functionality

Before Oracle acquired Cerner, the latter was overwhelmed by government contracts. The VA’s transition to Cerner’s system resulted in doctors and nurses spending too much time entering data, jeopardizing patient care. Missing orders and a complex system led to serious patient care problems, as exemplified by a homeless patient at risk of suicide whose care order disappeared, resulting in hospitalization after a system failure.

Oracle underestimated the challenges facing Cerner. The company realized the scale of these problems after the Cerner acquisition, due to constant downtime and system failures. Oracle executives assured lawmakers of their commitment to fixing the problems, promising to move to the cloud and make system improvements.

Despite Oracle’s efforts, including installing new hardware and bringing in top engineers, problems persisted. Of note, a design error in the scheduling system led to insufficient mental health follow-up visits, which contributed to the veteran’s death from substance use relapse. Another veteran died after a pharmacy error resulted in a needed medication not being delivered.

Ellison’s health aspirations are met with a harsh reality

Ellison was determined to revolutionize the EHR, but the VA contract proved to be a significant burden, diverting resources from his broader vision. As a result of these struggles, the morale of Oracle’s health team suffered. Lawmakers and stakeholders have called for repealing the VA contract because of ongoing problems, highlighting the complexity of adapting a vast government system to a standard EHR designed for the private sector.

Ellison viewed health care as a backwards business. Dr. David Agus, a renowned oncologist who treated Ellison’s nephew and collaborated on health care investments, noted Ellison’s commitment to solving health care issues. “Larry actually solves the problem, not just gives money,” Agus said. But the Cerner acquisition came with challenges beyond Ellison’s control.

Oracle’s ongoing struggles and future prospects

Nearly two years after acquiring Cerner, Oracle said it had made thousands of improvements. “Our veterans and the people who care for them deserve a world-class EHR system.” – said Seema Verma, director of Oracle Health and Life Sciences. However, implementation of the system remained on hold, and the VA imposed higher penalties on Oracle for missed performance goals.

Despite promises to stabilize Cerner’s system, Oracle had problems. The company did not fully migrate Cerner to the cloud, and outages continued to occur. For example, a system outage in April forced VA staff to revert to manual notes. Further complicating matters, Cerner continued to lose customers to competitors such as Epic, which impacted Oracle’s potential to leverage Cerner’s data for advanced artificial intelligence models.

Human toll

Mr. and Mrs. Charlie, two veterans advocating for better care in Spokane, highlighted these failures. Their personal experiences with Cerner’s flawed system spurred their efforts toward a solution. Despite Ellison’s grand ambitions, the immediate priority of the Charlie family and other supporters was to ensure veterans received the care they deserved without further harm from systemic failures.

Larry Ellison’s vision for integrating artificial intelligence with EHR systems was intended to transform healthcare. However, the practical challenges of managing and repairing Cerner’s faulty systems were significant. Oracle’s acquisition of Cerner has brought to light deep-seated problems that continue to impact veterans’ care, prompting calls to re-evaluate the VA contract and focus on delivering reliable and effective health care solutions.