Cost of Integrated Defense-VA Health Record Jumped to $12 Billion

This story has been updated.

The estimated cost of developing an integrated electronic health record for the Defense and Veterans Affairs Departments spiraled to nearly $12 billion by last September, VA Chief Information Officer Roger Baker said in a press call this morning. The mounting costs led top leaders of the two departments to call a halt to the joint effort on Feb. 5.

Baker said original estimates for the completed iEHR ranged between $4 billion and $6 billion, but by last year had jumped to double the high-end estimate. Elizabeth McGrath, deputy chief management officer at Defense, told members of the House Veterans Affairs Committee yesterday that integration expenses accounted for part of that increase, but did not specify how much.

Though the iEHR effort has been dropped, Baker said Defense and VA will acquire as many as 50 joint and shared medical applications, and pegged the cost of those acquisitions to between $4 billion and $6 billion, the original projected cost of the entire iEHR.

Baker said joint applications include a pharmacy system intended to serve 501 Defense and 276 VA locations and help fill 190 million prescriptions a year; a laboratory system for blood tests where results flow automatically into patient records; and another joint application to document, monitor and report immunizations.  

The two departments also could adopt each other’s medical applications, Baker said. “If DoD has an application that we believe is at the top end of the market, we will adopt that,” he said, but did not specify any likely candidates.

VA’s barcode medication administration system, which codes prescriptions as well as patients’ and clinicians’ IDs to ensure the right patient is given the right prescription at the right time, is a “market leading app” that he believes Defense will adopt.

VA proposed yesterday that Defense adopt its Veterans Health Information Systems and Technology Architecture, known as VistA, which would lead to plug and play compatibility, Baker said.

McGrath said Defense will conduct an analysis of VistA, including costs. VA needs to educate Defense about the strengths of  VistA as “they don’t know it as well as we do,” Baker said.

He added that VA has done a poor job in marketing VistA to key audiences, including Congressional staff, to counter what he called canards about the system, such as the fact that it runs on the old MUMPS programming language. Hundreds of commercial companies use MUMPS because “it is very fast and effective,” Baker said.

Users include Epic Systems, which provides the health record system used by Kaiser Permanente, operator of the largest private health care system in the country. Industry sources have told Nextgov that they expect Epic has responded to a Defense request for information for an EHR “with the most capability in the shortest period of time for the least cost.”