US Veterans Affairs Dept shoots down $10B Oracle Cerner dream

Despite Ellison's health world ambitions, Uncle Sam resets massive project over harm to patient health

A $10 billion Oracle Cerner project has ground to an indefinite halt following repeated problems with the rollout of electronic health records, some of which have caused physical harm to patients.

In a major blow to Oracle’s healthcare ambitions, the Department of Veterans Affairs — the $297-billion budget federal unit — announced EHR deployments would be halted while it focused on improving five sites that currently use the new EHR, as part of a larger program reset.

VA would fix the issues with the EHR that were identified during the recent “assess and address” period, the department said in a statement.

It would also continue to listen to veterans and clinicians about their experience with the EHR, and redirect resources to focus on optimizing the EHR at the sites where it is currently in use: Spokane VA Health Care System, VA Walla Walla Health Care, Roseburg VA Health Care System, VA Southern Oregon Health Care, and VA Central Ohio Health Care System. Crucially, additional deployments are not set to restart until VA is confident the new EHR is “highly functioning at current sites and ready to deliver for veterans and VA clinicians at future sites,” it said.

“We’ve heard from veterans and VA clinicians that the new electronic health record is not meeting expectations – and we’re holding Oracle Cerner and ourselves accountable to get this right,” said VA secretary Denis McDonough. “This reset period will allow us to focus on fixing what’s wrong, listening to those we serve, and laying the foundation for a modern electronic health record that delivers for Veterans and clinicians.”

Also in the statement, Dr Neil Evans, acting program executive director of the electronic health record modernization integration office, admitted that past attempts to “fix this plane while flying it" had not delivered the "results that Veterans or our staff deserve."

“We are going to take the time necessary to get this right for Veterans and VA clinicians alike, and that means focusing our resources solely on improving the EHR at the sites where it is currently in use, and improving its fit for VA more broadly,” he said.

In October last year, the VA said it would delay pending deployments of the Oracle Cerner electronic health record (EHR) system until June 2023 because of ongoing problems with the system.

The decision followed a Senate committee hearing in June which heard errors following the go-live of a new Oracle Cerner electronic health records system had harmed nearly 150 patients at a Washington hospital.

Four days after Mann-Grandstaff VA Medical Center in Spokane switched over to its new Cerner software, staff became aware of an "unknown queue" problem which had the potential to cause harm to patients, according to testimony given to the US Senate Committee on Veterans' Affairs.

Oracle acquired Cerner — a specialist developer of electronic health records systems used throughout the world — for $28.3 billion in June last year.

With the acquisition, Oracle inherited a 10-year contract with the Department for Veterans' Affairs signed in 2018. The deal was to design a health records system for VA hospitals and communicate with an EHR system that Cerner was installing for the US Department of Defense, replacing legacy systems, some of which were 40 years old.

Speaking at the hearing, David Case, deputy inspector general, Office of Inspector General, Department of Veterans Affairs, explained the Oracle Cerner EHR system requires a healthcare provider writing a medical order for tests or other services to match the order to a certain delivery location. If a provider's selected option does not match the order to the correct delivery location, then the order would go to the unknown queue. Healthcare providers were unaware that their orders were not being acted upon.

The VA and Oracle Cerner are working on changing contract terms to increase Oracle Cerner’s accountability “to deliver a high-functioning, high-reliability, world-class EHR system,” the most recent statement said. It expected VA estimated costs on the project would fall by $400 million in the 2023 financial year.

The only project still set to go ahead is Captain James A. Lovell Federal Health Care Center in Chicago, where the new EHR is scheduled to go-live in March 2024.

The decision to indefinitely suspend the VA’s Oracle Cerner rollout will not be part of Oracle's vision for healthcare.

On an investors call for Q3, Oracle founder and CTO Ellison made a big play of its inroads into healthcare markets following the Cerner acquisition.

“While we are pleased with this early success of the Cerner business, we expect the signing of new health care contracts to accelerate over the next few quarters,” said Ellison, before going on to list 14 new contract wins or software implementations for electronic health records.

Included in the list was the Department of Veterans Affairs (VA), which Ellison said had deployed the company’s unified electronic health record system to 19 additional sites. It was unclear which time period he referred to, but the VA website records only four new implementations during 2022.

Oracle was offered the opportunity to respond. ®