VA's new health record could yield savings – in 10 years

As the Department of Veterans Affairs embarks on a decade-long, $16 billion journey to replace its homegrown electronic health records system with a commercial platform, there's some hope there will be savings on the post-implementation side.

Currently, operation and maintenance costs for the 40-year-old Vista system exceed $1 billion per year.

At a June 26 hearing of the House Veterans Affairs Committee, a key tech oversight official said this figure could actually come down following the implementation of the Cerner system.

"I sure hope that it's a hell of a lot less than the $1 billion we currently spend," said Dave Powner, the director of IT management issues at the Government Accountability Office. "We got standardization. We won't have an old language. And we can save a lot of money in the hosting arena," he said.

Especially with regard to hosting, VA historically has been "one of the worst agencies on consolidating their data centers," Powner said. "This is an opportunity to do that right with the Cerner implementation."

Cerner CEO Zane Burke told the panel that the future O&M "will be less than the ongoing costs of the current Vista system." Burke explained that Vista's complexity, with more than 100 different versions each with its own upgrades and training, creates a situation "significantly more expensive" than working with the single instance of Cerner.

"We do anticipate taxpayer savings over time," Burke said.

Committee Chairman Rep. Phil Roe (R-Tenn.), himself a physician, isn't so sure.

"Mr. Powner, I hope you're right. But in my experience in the private world was that I always spent more and more on technology, not less," Roe said.

The three-hour-plus hearing included testimony from Acting VA Secretary Peter O'Rourke and officials leading the VA's health record acquisition and implementation plan.

O'Rourke noted that the Cerner project falls under his direct control now, in the absence of a Senate-confirmed deputy secretary. Trump administration nominee Robert Wilkie will take over leadership, assuming he is confirmed. Several Democrats on the committee took the opportunity to prod the acting secretary on the lack of Senate-confirmed leaders in key agency positions, including the CIO job and the head of the Veterans Health Administration.

O'Rourke announced the first three task orders on the Cerner contract covering the overall project plan, site assessments and data hosting.

John Windom, the retired Navy captain who led the Pentagon's health record acquisition and is currently a senior executive at VA, explained that Cerner is now on the hook to deliver a master schedule within 60 days.

The system implementation for the initial operating capability sites will launch on Oct. 1 of this year. Full implementation at those sites is currently scheduled to take 18 months.

Windom also explained that in addition to the $10 billion Cerner contract, the VA was planning on paying $4.59 billion for infrastructure updates and $1.2 billion for program management.

Powner is concerned that the planned $16 billion spend could go up and wants better documentation of implementation costs. He's also looking for VA to nail down its analysis of how much of Vista is actually being replaced by Cerner. Estimates range between 50 percent and 90 percent.