The VA’s new medical records system was linked to 149 incidents of patient harm. Four years later, the government raised the contract ceiling by another $16.9 billion.
Think about that. A system meant to improve veterans’ healthcare ended up harming patients. And the government expanded the amount it could spend with the same contractor.
That contractor is Oracle, the technology giant co-founded by billionaire Larry Ellison.
Now, Oracle didn’t receive another $17 billion. The government simply authorized that much additional potential business under the contract.
But how does a troubled government project end up creating even more business for the company behind it?
The answer goes back nearly a decade.
America Already Had a System
For decades, the VA operated its own medical records system called VistA.
It wasn’t perfect, and it needed modernization. But it was publicly developed, designed specifically for veterans’ healthcare, and already familiar to medical professionals.
In 2016, the VA commissioned an analysis comparing commercial software with upgrading VistA. According to former officials interviewed by ProPublica, the analysis found no clear advantage to switching to a commercial platform.
Then Trump took office.
His son-in-law Jared Kushner supported moving the VA onto the same commercial system selected by the Pentagon. Meanwhile, three wealthy Trump associates, known as the Mar-a-Lago Three, were influencing VA decisions despite holding no official government positions. They even reviewed a confidential draft of the contract.
In 2018, the VA awarded Cerner a nearly $10 billion contract without competitive bidding.
Oracle bought Cerner in 2022.
And the system soon became a major headache.
Patient safety incidents, software failures, frustrated doctors, and deployment delays followed. In 2023, the VA suspended most new deployments because the system wasn’t meeting expectations.
Oracle subsequently made improvements, and the VA resumed deployments. But in September 2026, the Government Accountability Office reported that 14 of its 18 recommendations for improving the modernization program remained incompletely implemented.
The following month, an association representing VA physicians and dentists called for further deployments to be paused pending independent safety reviews.
Yet the contract ceiling had already nearly tripled.
When Public Services Become Private Business
This is where the economics gets interesting.
The government has already invested billions in Oracle’s system, training workers, building infrastructure, and connecting medical facilities.
Replacing that system now could mean spending billions more, retraining thousands of employees, and potentially disrupting patient care again.
In other words, the more money the government spends on the contractor, the harder it becomes to leave the contractor.
That’s called vendor lock-in.
And it’s one of the ways private corporations can establish lasting power over public institutions.
The government starts by purchasing a service. Over time, it becomes dependent on the company providing that service. And eventually, changing suppliers becomes so expensive and complicated that continuing the relationship starts looking like the easier option.
Nobody needs to prove Oracle deliberately created this dependence. The economic incentives exist regardless.
The government bears the financial responsibility. Healthcare workers manage the problems. Veterans live with the consequences. And the corporation remains positioned to receive future business.
That’s a remarkably convenient arrangement for private capital.
Of course, modernization costs money, and the original VistA system had serious limitations. But was replacing it with a proprietary commercial platform really the best option? Could the government have invested in improving its own infrastructure instead?
Those questions deserve independent answers, especially before more billions are committed.
Because the VA exists to provide healthcare to veterans, not to guarantee a technology company a permanent customer.
America spent billions replacing its medical records system. Now replacing the contractor may be the more expensive problem.
That’s a hell of a business model.
