VA Secretary on $10B Health Records Contract: ‘We Have To Get This One Right’

Embroiled in allegations that taxpayers improperly paid for his wife’s travels, Veterans Affairs Secretary David Shulkin promised to Congress that the agency responsible for caring for more than 9 million veterans would be better stewards of taxpayer dollars.

Shulkin, testifying before the House Committee on Veterans Affairs Thursday, told lawmakers he would follow recommendations made by the VA inspector general and personally reimburse the Treasury for several thousand dollars’ worth of expenses accumulated by his wife, who accompanied him on a trip to Europe last year.

Shulkin had been slated to appear before the House committee before the IG report went public to provide insight regarding President Donald Trump’s fiscal 2019 budget proposal, which seeks $198 billion for the department. That budget, however, includes a reduction of 27 full-time positions within the department’s office of inspector general, “leaving OIG far short of their desired staffing level,” said Rep. Tim Walz, D-Minnesota.

“The optics of cutting the IG are really, really bad,” Walz said.

Commercial Electronic Records Update

The president’s budget request includes $1.2 billion to fund a new commercial electronic health records platform. The request is a sure sign that VA is about to take the final step in a decision Shulkin made last year to sole-source a contract to software developer Cerner to build the same health records platform for VA the company is currently partnering with Leidos to build for the Pentagon.

After three botched attempts that cost taxpayers almost $2 billion to modernize its electronic health records system, Shulkin said, “We have got to make sure we got this one right.”

The contract is expected to be valued at $10 billion and will take a decade to roll out across VA’s massive infrastructure of hospitals, clinics and facilities. Shulkin explained a recent “pause” in the process occurred because VA needed to make sure the Cerner-built system would be interoperable with Defense Department’s system as well as “dozens of electronic health records systems out there” in the private sector.

“That’s a challenge the American health care system hasn’t figured out yet,” Shulkin said. “We think VA can help lead this for the whole country by making this interoperable.”

Chairman Phil Roe, R-Tenn., warned Shulkin that it would be “unthinkable that VA could spend billions on a project that doesn’t allow for seamless interoperability.”

Shulkin acknowledged that VA will be running both its legacy electronic health records system, VISTA, and the new commercial system simultaneously for the next 10 years. It will up the costs, but Shulkin told lawmakers it is necessary given VA’s current IT environment.

“We are going to be focused on maintaining VISTA because we have 130 transitions to happen over a 10-year period of time,” Shulkin said, noting that each VA facility runs a customized version of the old software. “We’ll be running VISTA until the vast last instance is turned over.”

Shulkin also noted that the budget request would allocate $129 million to “improve the veteran experience,” a nod to efforts that began under his predecessor to boost customer service to vets.