Oracle Cerner has lost thousands of hospital beds in recent years because of hospital consolidation and large health systems shifting to its biggest competitor, according to EHR market share data and interviews with CIOs.
While Oracle Cerner netted 99 hospital clients between 2017 and 2022, it lost 7,955 hospital beds during that time period, per a report from KLAS Research. KLAS cited the "disparity in size between the small hospitals they gained and the larger hospitals they lost."
In that same time span, Epic picked up 434 hospitals and 94,656 beds, the KLAS report found. Epic, the nation's leader in hospital market share, is increasingly the EHR vendor of choice for large health systems. Oracle Cerner lost 15 hospitals that were part of large systems in 2022, all to Epic.
"This turnover likely reflects the uptick in mergers and acquisitions as more systems are forced to adopt the EHR of the 'parent' organization, likely impacting the magnitude of the system conversions," said Bradd Busick, senior vice president and CIO of Tacoma, Wash.-based MultiCare Health System. "In a time of financial pressure and a laser focus on being able to do more with the same (or less), systems are making the strategic decision to move to scalable platforms that enable retention (and recruitment) of our clinicians."
Among small health systems (between two and 10 hospitals), Oracle Cerner picked up 10 hospitals while losing nine in 2022, according to KLAS. Most of the vendor's gains were among standalone hospitals. The company didn't respond to a request from Becker's for comment for this story.
Linda Stevenson, CIO of Norwalk, Ohio-based Fisher-Titus, said smaller health systems like hers could be frustrated that Oracle Cerner often requires additional purchases for new platforms rather than making improvements to its EHR.
Saad Chaudhry, chief digital and information officer of Annapolis, Md.-based Luminis Health, said it's less about what Oracle Cerner and other smaller vendors are doing wrong and more about what Epic seems to be doing right.
But that doesn't mean Epic's market dominance will continue unabated. Mr. Chaudhry said because of CMS' meaningful use program, EHRs were designed to "check boxes" rather than truly digitally transform clinical workflows and hospital operations.
"As operating margins for organizations become harder to maintain in the black, and models of healthcare provision continue to evolve with new entrants in the provider space, perhaps there is a future where the EHR products themselves must change dramatically as well," he said. "A future where the current architecture and category of product are completely transformed in every way to usher in the next generation, akin to the shift in the phone markets when the iPhone was released."
"The question then becomes, who can pivot to this future better?" he added. "Would it be Epic, which indeed has both the resources and a larger customer base for such an endeavor? Or would it be Cerner or Meditech (or someone entirely new), given that they have an incentive (and perhaps a burning platform) to radically change the market?"
Larry Ellison, co-founder and chief technology officer of Oracle, has big expectations for how Cerner will evolve. In a 2022 blog post after his company purchased Cerner for $28.4 billion, he said Oracle's ultimate goal is creating a unified national healthcare database.
"Together, Cerner and Oracle have all the technology required to build a revolutionary new health management information system in the cloud," Mr. Ellison said in the post. "That system will deliver much better information to healthcare professionals. Better information will fundamentally transform healthcare."
The company also aims to leverage its enterprise resource planning and human resources tools to automate more functions for healthcare organizations.
"This new health management system will deliver much better information to healthcare professionals," Mr. Ellison said in the post. "It will help doctors deliver better patient outcomes, help public health officials improve public health policy and lower overall costs. That is now our primary mission here at Oracle."