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Ellison’s prediction that Cerner would help Oracle woo massive health-industry customers has so far failed to become reality in the US, while gaining some momentum overseas. Existing clients say they have seen little improvement in the software, which has long been plagued by technical glitches such as difficult integration between products.
When the purchase was announced, Ellison said it would be “Oracle’s corporate mission” to give medical professionals the data to make better treatment decisions. The deal, he said, was “about saving lives.” But for now, customer departures have accelerated — at least a dozen major clients inked deals to replace Oracle Health software in 2023, according to people familiar with the deals and documents seen by Bloomberg. The previous year, the business lost clients with a combined capacity of 4,658 patients, according to KLAS Research, an industry analyst.
Epic, in particular, likes to brag about retention. One of the most popular presentation slides at the company is blank and titled “Customers Which Have Switched From Epic to Cerner,” said Eric Helsher, Epic’s vice president of client success. When a health tech vendor is acquired by another company, he said, user satisfaction often declines and the culture changes.
For now, the focus is on trimming expenses, especially labor costs, to bring the unit closer to “Oracle standards,” as Catz put it. “The situation at Cerner — that is just not how we run a place,” she said during a late 2022 investor meeting. Thanks to aggressive cost cuts, Cerner’s annual operating margin is about 33%, the documents show.
While that was true, it didn’t tell the full story, according to people familiar with the matter. The customers who have been shifted to Oracle’s cloud are by far the smallest and least technically complicated, such as family clinics with only a few doctors running on standardized software. The vast majority of the cloud transition has yet to happen, and will involve moving major customers that have their own domains — unique and often highly customized versions of Cerner’s software.