Oracle must stop kicking the Cerner can down the road—it’s time to get decisive

In 2022, Oracle completed its acquisition of electronic health records (EHR) leader Cerner for $28 billion in what HFS Research called a “copycat transaction.” At the time, it was fashionable for Big Tech to buy healthcare assets (Microsoft acquired Nuance, Amazon picked up PillPack and One Medical, and Google partnered with MEDITECH). Oracle suffered from acute FOMO (fear of missing out) to get into the game.

Fast forward from the Cerner acquisition, and the healthcare market remains fluid. As a new administration takes office in Washington, there is heightened uncertainty about policy and its impact. However, segmented market forces will continue to drive decisions. Health systems and hospitals will choose EHRs that suit their business, and Cerner’s outlook does not look healthy.

Cerner’s, aka Oracle Health’s, performance has been less than stellar since the acquisition

While Cerner became part of the rebranded Oracle Health, that did not stop it from taking several hard hits, including shrinking market share (see Exhibit 1) over the last four years. Its implementation by Veterans Affairs (VA) was paused in 2023 after almost five years of contracting as the company experienced various technical challenges. In the process, it implemented only a handful of VA-affiliated centers instead of all 176. To compound those challenges, Oracle Health has, according to multiple reports, reduced its workforce by close to 50%, including shutting down Cerner’s Kansas City campus and consolidating operations. Unsurprisingly, Oracle took these actions after losing several high-value clients, representing thousands of hospital beds, primarily to Epic Systems. It is particularly telling when a company loses business to competitors that are universally disliked and considered difficult to work with.

Exhibit 1: It is no longer news but the status quo that Epic has grown its market share by 8%, while Cerner declined by ~3% in the US market

Source: Becker’s Hospital Review, HFS Research, 2025

Still, all is not lost for Cerner, which has made gains with small and mid-sized hospitals and healthcare centers. The VA is set to relaunch with Cerner in 2025. Its international business has seen more success as it continues to win new business, particularly in the Middle East. Oracle Health plans to launch its next-generation electronic health record powered by AI. It connects Oracle Health Command Center and Oracle Health Clinical AI Agent, and embeds Oracle Health Data Intelligence in 2025. To top it all off, there is star power behind Oracle Health, which is led by Seema Verma, the former Centers for Medicare and Medicaid Services (CMS) administrator, and cheered by Larry Ellison, executive chairman and CTO of Oracle, who announced the move—again—of Oracle headquarters to Nashville, the supposed US health services capital.

Oracle Health’s position in Oracle’s portfolio does not match the ambitious narrative

Given the $28 billion purchase price and the billions spent since, it is interesting that it is a treasure hunt to find Oracle Health, specifically its EHR, on Oracle.com (see Exhibit 2). Oracle’s 2024 10K filing further indicates minimal strategic intent with Oracle Health despite contributing approximately 10% of total corporate revenues. Oracle Health’s position across the three reporting segments is nebulous and reflects an uncomfortable placement—forced to leverage AI and cloud, not a native or seamless value proposition. While the public narrative indicates an AI-powered Oracle Cloud leveraging next-generation EHR, there is limited evidence beyond Oracle’s press releases.

Exhibit 2: Oracle Health is lost in the Oracle wilderness

Oracle Health is fast running out of options for its EHR

The headwinds are relentless and getting stronger in an uber-competitive digital health market, particularly in the mature EHR platform segment. Oracle Health has no hiding place and very limited runway to start firing on all cylinders. It is down to three realistic options:

1. Change the paradigm: EHRs are typically used as an admin and clinical tool to organize, manage, comply with, and, more recently, augment clinical diagnostics. Reimagine that paradigm in the age of interoperability with the aid of Oracle Cloud to make it accessible to consumers and patients. This is not unlike MyChart by Epic, but it is more advanced and unconstrained by the provider. There is a market for health and care needs plagued by fragmented data that is not useful. Oracle Health has very little to lose and should consider blowing up the legacy and outflanking the market to address its unframed and evolving needs.
2. Spin it off and call it a day: The US EHR market is mature, with more than 95% of hospitals adopting it. Only limited growth is seen with physician practices, a segment Cerner has not played at scale in the past and to which it will remain unattractive. So, carve out Oracle Health’s EHR assets (legacy Cerner and any new bells and whistles) and spin it off as an independent entity on its own or in partnership.
3. Make international markets the home: Cerner is finished in the US market. There is really no coming back. Speak to any CIO with EHR implementation, and most will swear never again. No business case is compelling enough for health systems to move toward Cerner en masse. So, it may be time to shift Oracle Health HQ to the Middle East and address a growth market there.

The Bottom Line: Oracle is unlikely to succeed with healthcare platforms as it has in other industries—it’s time to move on.

The market has run out of patience with Oracle Health. Health systems don’t consider Cerner or Oracle Health as a primary solution. Oracle Health is stuck in the mud, and its prospects are limited. It’s time for it to take drastic action to move beyond sustained losses.