Lawmakers question VA health record’s costs and batched deployments

Even as the Department of Veterans Affairs prepares to resume go-lives of its new Oracle Health electronic health record system in 117 days, House lawmakers remain concerned about the modernization project’s total cost and the agency’s readiness for simultaneous deployments at medical facilities in the coming months.

VA paused most rollouts of the new software in April 2023 to rectify technical issues, patient safety concerns and usability challenges at the sites where the system has been deployed. Thus far, the new EHR system has been implemented at just six of VA’s 170 medical centers.

After working to address a host of problems at the sites where the software had been deployed, VA announced in December that it was moving out of its operational pause and would be rolling out the new system at four Michigan-based medical sites in mid-2026. VA Secretary Doug Collins later announced in March that the department was planning to deploy the software at nine additional medical facilities next year, bringing the total to 13 sites.

Despite assurances from VA and Oracle Health that rollouts of the new EHR system are back on track, lawmakers from both sides of the aisle used a House Veterans’ Affairs Technology Modernization Subcommittee hearing on Monday to question the department’s comprehension of the project's scale. 

Rep. Tom Barrett, R-Mich., who chairs the panel, noted that the latest estimate for the project’s lifecycle cost is roughly $37 billion, saying “we cannot keep writing a blank check that risks taxpayer money and slows down, or worse, endangers the delivery of veteran care.”

VA first signed a $10 billion contract — later revised to over $16 billion — with Cerner in May 2018 to modernize its legacy health record system and make it interoperable with the Pentagon’s new health record, which was also provided by Cerner. Oracle later acquired Cerner in 2022 and rebranded the new unit as Oracle Health.

The latest lifecycle cost figure comes after a 2022 estimate conducted by the Institute for Defense Analyses for VA predicted the ultimate cost to be around $50 billion. 

“I don't have confidence that they know, at the bottom line, what the final cost is,” Rep. Nikki Budzinski, D-Ill., told Nextgov/FCW following the hearing. She is the top Democrat on the panel.

Budzinski noted that VA never provided the Government Accountability Office with the updated lifecycle cost estimate, despite the fact the watchdog listed that as a priority recommendation for the modernization project.

“There's a difference between a back-of-the-napkin, ‘This is what we think it's going to be,’” she added. “We believe that, for that kind of taxpayer dollar, we should have a full breakdown of what it's going to cost — between program office cost, to consulting cost, to ongoing maintenance infrastructure — how each of those really very clearly is delineated, because this is tens of billions of dollars.”

With much riding on the project’s impending resumption, lawmakers were also particularly concerned about VA and Oracle Health’s readiness to launch the new system at multiple medical facilities at essentially the same time. All four go-lives at Michigan VA medical facilities this coming April are expected to occur almost simultaneously. 

VA Secretary Doug Collins told lawmakers in May that successful deployments of the new system next year will accelerate the modernization project moving forward. During her opening remarks on Monday, Seema Verma, Oracle Health's executive vice president, said VA and the company were looking to go live at 26 medical sites in 2027. 

Dr. Neil Evans — acting program executive director of VA's Electronic Health Record Modernization Integration Office — said the department “will now be using a market based approach for deployments with multiple medical centers working together and going live simultaneously in each deployment.”

He added that, “this approach allows us to scale up the number of deployments, enhance efficiencies and improve the sharing of best practices within and between markets.”

When pressed by Rep. Morgan Luttrell, R-Texas, about whether Oracle Health and VA have a contingency plan should the scheduled Michigan site go-lives fail, Verma said “that's a decision, I think, that we would discuss with the VA and figure out the appropriate.”

“We have no reason to believe that there would be a total failure of the system, because we haven't seen that in our, you know, the last few projects — whether it's our optimization projects or the go-live [at the Captain James A. Lovell Federal Health Care Center],” Verma said. 

Barrett expressed similar concerns, telling Verma that every VA site is different and “doing them all four together, to me, elevates the risk that there's going to be problems that arise or issues that are overlooked.”

Verma said Oracle Health and VA have had teams on the ground at the planned deployment sites and “it's not like we're turning on the system quickly.”

“We've been in these sites,” she added. “We've been doing assessments of the sites so we can understand what they have on the ground, what are the differences between each site, so we have a plan for each site and we have adequate staff and support for each of those sites.”

When asked for her assessment, Carol Harris, GAO’s director of information technology and cybersecurity issues, said “when you're doing it for simultaneous ones, I mean, there's a tremendous amount of resources that are going to go towards ensuring, for example, that ticket resolution is done, you know, under the contractual obligations.” 

“It's going to take a tremendous amount of resources that I'm not quite sure are sustainable,” she added.