VA expects to save $16B by going open source for health records

The Veterans Affairs Department is turning to open-source solutions to modernize its electronic health records system partly to avoid the estimated expense of $16 billion to buy a commercial system, said Roger Baker, VA's CIO and assistant secretary for information and technology.

VA developed the $16 billion estimate through an independent validation exercise and by comparing itself with the Kaiser Permanente health system, Baker said at a May 11 hearing of the House Veterans' Affairs Committee's Oversight and Investigations Subcommittee.

Because Kaiser spent $4 billion to purchase a commercial digital record system for 36 hospitals, VA would likely need to spend $16 billion as a reasonable estimate to cover its 153 hospitals, Baker added.

“To avoid those costs and to find a way to involve the private sector in modernizing [VistA] VA is turning to open source,” Baker said. VistA, the Veterans Health Information Systems and Technology Architecture, is a collection of about 100 integrated software modules.

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Open-source development is a “powerful method of producing production-quality software” that meets or exceeds current standards in commercial and government-produced products, Baker said. Although the licensing, costs and security requirements of open-source products are different, they are no better and no worse than those of commercial products, he added.

“VA expects the rate of innovation and improvement in VistA can be increased without increasing our cost budget by better involving the private sector (and true private sector practices) in both the governance and development of VistA for Open Source,” Baker said.

VA recently advertised for custodial agent to operate the open-source development community for VistA. Baker estimated that the cost of the custodial agent would be less than $10 million per year.

However, Joel Willemssen, managing director of IT at the Government Accountability office, cautioned that VA, as it modernizes VistA, should coordinate with the Defense Department on the plans for a joint system.

He noted that VA spent $600 million on its VistA modernization from 2001 to 2007. In April 2008, it estimated an $11 billion total cost to complete the modernization by 2018, Willemssen said.

In recent months, GAO reported problems with the plan for a joint system, including gaps in enterprise architecture and investment management for the system.