Millions in Cost Overruns Hit Effort to Merge VA, Military Health Records

Communication Airman, Staff Sgt. Samuel Camarista and Maj. Brett Ringger work together to ensure the electronic health care records systems are running during ARCTIC CARE 2017 between Kodiak Area Native Association and military IT systems to better support medical providers before seeing patients in Port Lions, Alaska, on March 29, 2017. (U.S. Air Force photo by Tech. Sgt. Wendy Day)
Communication Airman, Staff Sgt. Samuel Camarista and Maj. Brett Ringger work together to ensure the electronic health care records systems are running during ARCTIC CARE 2017 between Kodiak Area Native Association and military IT systems to better support medical providers before seeing patients in Port Lions, Alaska, on March 29, 2017. (U.S. Air Force photo by Tech. Sgt. Wendy Day)

VA officials acknowledged Wednesday that a $16 billion project aimed at finally providing common, easily searchable electronic health records for the VA and the Department of Defense has already been hit with a $350 million cost overrun.

John Windom, executive director of the VA's new Office of Electronic Health Record Modernization, said the original estimates for the program had not included the $350 million projected costs over 10 years for the salaries of the government employees who would work on it.

At a hearing of the new House Veterans Affairs Subcommittee on Technology Modernization, which was formed in July primarily to oversee the project, Windom said Congress had been forewarned that the salaries of the employees would not be included in the contract with Cerner Corp., but he was met by skepticism.

"I find it hard to believe that such a basic part of the program -- government salaries -- could be overlooked," said Rep. Jim Banks, R-Indiana, the subcommittee's chairman.

Banks said the cost overrun emerged "before any real work actually began" on the project to make health records of two huge departments compatible.

"How can that be?" he asked.

"I'm not ready to sound the alarm yet," Banks said, but added that the cost overrun increased his concerns over whether the program was feasible.

"The more I learn, the more daunting it has become," Banks said. "Some thought we could merely install the Cerner system. That apparently is not enough."

Windom said he expected efficiencies would be developed as the project proceeds to hold down future costs.

"There are going to be efficiencies gained we can't forecast at this point," he said.

Previous attempts to mesh the electronic health record systems have either failed or been abandoned, most recently in 2013 when then-Defense Secretary Leon Panetta and then-VA Secretary Eric Shinseki dropped an integration plan after a four-year effort and the expenditure of about $1 billion.

In the latest effort, then-acting VA Secretary Robert Wilkie in May awarded a $10 billion, 10-year contract to Cerner, of Kansas City, to develop an integrated electronic health record system. Related costs over the course of the contract were estimated to put the total cost at about $16 billion.

In comments at the hearing, and in his questioning of witnesses, Rep. Phil Roe, R-Tennessee, chairman of the full committee, said he had warned Wilkie, who was sworn as VA Secretary in July, of pitfalls in the enormously complex task of meshing VA and DOD health records.

"If we don't get this right, you and I need to go in the witness protection program,"

Roe said he told Wilkie.

Even if the VA and DOD systems could be successfully merged, "what are we going to do about outside practitioners?" Roe said.

Roe noted that about 35 percent of the veterans currently receiving VA health care have chosen to opt for private care, and that number was expected to rise under the VA Mission Act signed into law by President Donald Trump earlier this year to expand community care.

"That is a challenge, definitely," said Dr. Laura Kroupa, acting chief medical officer of the VA's Office of Electronic Health Record Modernization. "We're working on that."

Problems have already emerged in Seattle and Spokane, the first sites chosen by the VA for the installation of the new EHR systems, said John Short, chief technology integration officer at the newly established office.

Nearly all of the five-year-old computers in Seattle and Spokane will have to be replaced to adapt to the new system, Short told the subcommittee.

-- Richard Sisk can be reached at richard.sisk@military.com.

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