Veterans Affairs Reboots Oracle Health Records Project For $330M

The US Department of Veterans Affairs has restarted a project to implement Oracle electronic health records in its hospitals after the project was suspended in 2023.

The VA has confirmed to The Register that a $330 million payment to Oracle for Cerner software and support has been approved for four new Michigan sites selected in Ann Arbor, Battle Creek, Detroit, and Saginaw for deployment in 2026.

The new payments relate to a $300 million agreement for optimization of the electronic health records (EHR) management system and a $29 million deal for identity and access management support and enhancement, published late last year, a spokesperson said. These payments come under the original $9.99 billion deal, launched in 2018.

The deals mean Oracle Cerner will also be used to support medical facilities already using the software in Spokane and Walla Walla, Washington; Columbus, Ohio; Roseburg and White City, Oregon; and North Chicago, Illinois.

Oracle acquired Cerner – a specialist developer of electronic health records systems used throughout the world – for $28.3 billion in June 2022. With the acquisition, Oracle inherited the ten-year deal to design an EHR system for VA hospitals and communicate with a system that Cerner was installing for the US Department of Defense, replacing legacy systems, some of which were 40 years old.

The implementation at Mann-Grandstaff VA Medical Center in Spokane went live in 2020 but Veterans Health Administration patient safety experts found 60 concerns with the new software, according to a US Senate Committee on Veterans Affairs hearing in 2022.

During the same hearing, Mike Sicilia, executive vice president at Oracle, said Cerner and the VA had implemented system changes to reduce the number of errors. He promised to "fix it first and work out the economics later."

In October 2022, the VA said it would delay pending deployments of the Oracle Cerner EHR system until June 2023 because of ongoing problems. In April 2023, it suspended the project indefinitely.

At the time, former VA secretary Denis McDonough said: "We're holding Oracle Cerner and ourselves accountable to get this right. This reset period will allow us to focus on fixing what's wrong."

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In December 2024, the VA announced it would restart the project with the implementation of new software at its medical centers in Michigan.

While the VA and Oracle say they have made progress addressing the EHR system's flaws, they both acknowledge that some still have not fixed, including the pharmacy module and referral routing. They claim they can continue to improve the system while preparing for go-lives.

Oracle and the VA have been asked to comment.

The House of Representatives Committee on Veterans Affairs is set to assess what improvements have been made, and whether the system can be deployed in Michigan in 2026 without negatively impacting the delivery of care to veterans and productivity for VA employees.

Earlier this month, VA secretary Doug Collins said he would consider restarting the EHR system project sooner than planned. "I believe that we can do it and do it properly, not rushed. There's enough information there that I believe we can actually get it done quicker, but it's going to take looking at." ®