VA’s $16 billion medical records overhaul could triple in cost

A service member shelves patient medical records at Ellsworth Air Force Base, S.D., March 26, 2009.


Veterans Affairs officials announced Wednesday they will delay the planned deployment of the department’s new electronic medical records to sites in Idaho amid concerns the $16-billion project could be endangering veterans and may triple in cost.

Senate lawmakers said the latest postponement — and other promised fixes to the training and deployment process — don’t go far enough to acknowledge the deep-seated problems with the system, some of which may not be reparable.

“For nearly two years, [local employees] have done all they can to provide healthcare to veterans in the middle of a pandemic, and with an electronic health record system that is not delivering,” Senate Veterans’ Affairs Committee Chairman Jon Tester, D-Mont., said during a hearing on the issue.

“We know this program faces very real problems. And we need to work together to make needed improvements without delay.”

But VA officials said they are not abandoning the project, despite growing concerns about its long-term viability.

“We’ve learned from these issues around patient safety,” VA Secretary Denis McDonough said at a separate press event Wednesday. “Our veterans deserve to have access to 21st century healthcare in a way that protects them and enhances their interests.”

The 10-year, $16 billion project was approved in 2017 by President Donald Trump and touted by his administration as a transformational event for the department by putting VA records on the same system as the Department of Defense for the first time. Military officials began using a new records system based on the same software in 2015.

But last week, the VA Inspector General’s office released a new report detailing 149 cases of patient harm, all of which were caused by the implementation of the new Oracle Cerner Millennium records software over a nine-month period at the department’s hospital in Spokane, Wash.

A flaw in the system sent about 11,000 orders to an unknown and unchecked file, where requests for items such as appointments or blood tests went unanswered. In at least two cases, the lost files caused “major harm” to patients.

The report was the latest in a series of negative assessments of the system unveiled by the inspector general over the last two years, several of which have prompted reviews and delays.

One month ago, the department announced plans to delay deployment to sites in Washington and Oregon because “the system hadn’t shown adequate reliability to support the current schedule.”

The latest delay came this week, when VA leaders announced plans to postpone deployment of the records system to sites in Boise, Idaho. That work was scheduled to begin this weekend.

Meanwhile, lawmakers are also scrutinizing the cost of the project after officials said the total over the next 30 years could approach $51 billion, when factors such as system maintenance, care changes and staffing issues are factored in.

“It is $40 billion over the cost estimate VA has been operating under until now,” said Sen. Jerry Moran, R-Kansas, ranking member of the veterans committee. “But until Monday, we were not aware how large that cost overrun truly is.”

VA officials said that those calculations factor in a host of expected costs outside of the software contract, and are not indicative of an over-budgeted endeavor. They also said they do not expect the system to cost more than the $16 billion agreed-upon price tag unless the 10-year implementation timeline is extended significantly.

But they did acknowledge shortcomings in training and adaptation of the software in past years.

Administrators promised that recent corrections — such as establishing new oversight protocols and staff training plans — would keep the project on schedule and produce the robust records system promised to staff and patients.

“We’ve taken sufficient steps to build additional safeguards, knowing where the vulnerabilities are based on experiences we’ve had, to reduce the risk of additional harm or to reduce the likelihood of similar problems occurring and other sites,” Dr. Gerard Cox, VA’s assistant under secretary for health for quality and patient safety.

“I feel like we have done everything possible to reduce the risk to patients.”

Officials from Oracle Cerner have said that many of the initial problems with getting the new system integrated into VA were expected and reparable.

“While I fully appreciate substantial challenges exist – all of which are legitimate and understandable – the fact is that more is working than is not,” said Mike Sicilia, executive vice president of Oracle Corporation, which took over the contract earlier this summer when it bought Cerner.

“There is nothing here that can’t be addressed in reasonably short order.”

Part of that work will be shifting operations to a new cloud-based system, in order to prevent outages and stalls. Officials said they have had nearly 50 such problem events since the first VA site began using the Millennium software.

Lawmakers remain skeptical.

In a statement last week, House Veterans’ Affairs Committee Chairman Mark Takano, D-Calif., said he was “extremely disappointed” with the process so far, including VA’s transparency about ongoing problems.

Committee ranking member Mike Bost, R-Ill., said he has “serious doubts about whether this project should continue, even if the fatal flaws at the initial rollout sites are fixed” because of the ongoing cost and safety questions.

Several other lawmakers have pushed for VA to abandon the project, a move that would cost billions of dollars and leave the department’s medical records systems with an uncertain future. McDonough said he is not considering that option.

“We will get to the bottom of these problems, and make sure that we can realize a modernized electronic health record that draws the full history of our veterans’ service to the country,” he said. “When we realize that potential, we will be able to expand exponentially the benefits for veterans and for the country.”

Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.



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Tony Beasley
Tony Beasley writes for the Local News, US and the World Section of ANH.