Why are strategic owners and private equity exiting the Electronic Health Records market?

Feb 04, 2026·By Nelson Advisors

Strategic owners and PE appear to be exiting classic EHR assets because the legacy EHR business model is becoming low‑return, capital‑intensive and politically exposed, even as the data itself becomes more valuable for AI. The value is migrating to cloud, data platforms and AI infrastructure rather than to regulated transactional EHR software licenses.

What’s happening in a few specific cases - EMIS, Cerner

UnitedHealth / Optum UK (EMIS)

UnitedHealth acquired EMIS in 2023 for about £1.24bn to deepen its UK health tech presence.

It is now running a sale process for Optum UK, whose core asset is EMIS; reports suggest sponsor bids around £1bn+, with PE firms like TPG and Blackstone circling.

This looks like a portfolio reshaping and capital recycling move: Optum can keep benefiting from UK data/relationships through partnerships while freeing capital for higher‑growth analytics, virtual care and AI plays elsewhere.

Oracle / Cerner

Oracle bought Cerner for over $28bn in 2022 as a healthcare data beachhead.
Cerner’s rollout in large projects such as the U.S. VA has been troubled, with cost overruns and customer dissatisfaction, and Oracle Health’s share has “declined substantially” versus Epic.

TD Cowen now reports Oracle is evaluating selling Cerner and cutting 20–30k jobs to help finance a massive, roughly $156bn AI datacentre build related to a huge OpenAI contract.
In other words, Oracle appears to view cloud + AI infra as a far better use of balance sheetthan grinding away in an EHR segment where it is losing share and returns.

Why exit EHR when AI needs the data?

EHR economics are maturing and squeezed

Global EHR revenues are still growing (mid‑single to high‑single‑digit CAGR to 2030), but this is now a mid‑growth, infrastructure‑like market rather than a hyper‑growth SaaS story.

Penetration in OECD health systems is high; growth is mainly upgrades, add‑on modules and emerging markets, with intense pricing pressure from public purchasers.

Vendors face rising costs to meet regulatory, interoperability, cybersecurity and AI‑integration requirements, which erodes margins and makes large‑scale, on‑premise or hosted EHRs less attractive relative to lighter‑weight data/AI products.

The value is shifting from “system of record” to “data and AI layer”

EHRs originated as transactional systems and digital filing cabinets; the strategic value now lies in platforms that can aggregate data from multiple sources, normalise it and power AI models and real‑time decision support.

Health systems increasingly want modern data platforms and analytics layers that sit on top of EHRs, rather than being locked into a single monolithic vendor stack.

This enables owners to divest the heavy, regulated EHR asset but still participate in AI value creation via cloud, interoperability hubs, data warehouses and model‑as‑a‑service offerings that ingest EHR data under contract.

Strategic capital is being reallocated to AI infrastructure and cloud

Oracle faces a massive capex requirement for GPU‑rich datacentres to support a multiyear OpenAI cloud contract, with estimates of $156bn in required capital spend; selling Cerner is one option explicitly floated to fund this.

The risk‑adjusted return on hyperscale cloud + AI infrastructure, if Oracle wins enough workload, likely beats the return on trying to fix Cerner, regain share from Epic, and fund long, politically sensitive deployments.

UnitedHealth, similarly, can deploy capital into faster‑growing data analytics, care delivery and insurance adjacencies globally rather than continuing to own a UK GP EHR business that behaves more like regulated utility infrastructure.

Regulatory, political and reputational risk is high

UK primary‑care EHR (EMIS, System C etc.) is deeply entangled with the NHS, patient data sovereignty concerns and scrutiny of foreign ownership; this creates political risk, especially for a US insurer like UnitedHealth.

In the U.S., Cerner’s contract at the Department of Veterans Affairs has been plagued by technical problems and negative press, damaging Oracle’s reputation and increasing its exposure to government programme risk.

For diversified strategics, exiting or partially exiting EHR can de‑risk the portfolio, while they keep non‑ownership access to data through long‑term hosting, analytics or services contracts.

For PE, EHR now looks like a classic yield / platform trade, not a long‑duration growth story
Core EHR vendors have recurring revenue, high switching costs and entrenched positions, which suits PE’s appetite for cash‑generative, defensible assets.

CVC’s playbook at System C (platform consolidation, oncology bolt‑on, cross‑selling across health and social care) sets up a secondary buyout or strategic sale once operational levers are pulled.

Once value‑creation milestones are achieved and leverage is optimised, recycling into the next wave of health data/AI or specialised workflow software can offer better risk‑adjusted upside than holding EHRs through their slow‑growth, high‑capex AI retrofitting phase.

How AI interacts with EHRs (and who captures value)

Leading EHR vendors are actively embedding gen‑AI into documentation, search and decision support, with dozens to over a hundred live or in‑development use cases (note writing, chart summaries, ambient scribing, agentic assistants etc.).

AI performance improves as it accesses broader, more longitudinal and multi‑source data (labs, imaging, devices, claims, SDOH), which often requires data platforms that span multiple EHRs rather than any single vendor’s silo.

Cloud vendors and horizontal AI platforms (including those building health‑specific data fabrics) are therefore well positioned to capture outsized value, while EHRs increasingly behave as regulated transaction systems feeding those layers.

How to interpret this as an investor / strategist

EHR data are indeed critical for healthcare AI, but owning the EHR vendor is no longer the only or best way to monetise that data; data‑sharing, interoperability and analytics contracts can give you the data flows without owning the legacy software stack.

Strategics like Oracle and UnitedHealth are pruning capital‑intensive, politically fraught EHR assets to double down on cloud, AI and services where they see higher growth and returns, while PE steps in to own and optimise the “infrastructure” layer.

The next leg of value likely sits in:

Vendor‑agnostic health data platforms and interoperability hubs.
AI‑native clinical workflow tools that sit on top of EHRs.
Niche, high‑acuity modules (oncology, ICU, peri‑op) with clear ROI