AUG 13, 2014 8:13pm ET

DOD-VA EHR Train Poised to Go Off the Rails

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What most worries me about the Obama Administration is that it never sees the train wreck coming that everyone else sees. It reacts painfully slow to events and gets bit every time because no one looks around the corner for what is next.

Well, it isnít the biggest wreck coming, but the Departments of Defense and Veterans Affairs are setting up for another failed attempt at interoperable electronic health records. Itís bad enough--morally indefensible actually--that sharing data was not a priority during 13 years of war. Finally, under the Obama administration, the departments were going to implement a shared EHR system. But departmental politics and powerful contractors again trumped care of soldiers and the administration backed down, enabling DOD to commercially contract for its own EHR that would be made interoperable with VAís.

Of course, DOD and the VA will tightly integrate their separate EHRs and make them interoperable, we are assured. Just like they were going to do with each of the multiple iterations of EHRs each department has had in the past two decades.

Early estimates have the cost of DODís EHR pegged at $11 billion, but early estimates are nothing more than a launching pad for skyrocketing expenses when real work begins. Does anyone know of a major EHR project where integration costs came in as projected?

But real concern may lie with some of the vendors under consideration. Three teams so far have entered the competition to secure DODís contract, although more may be coming. The teams are IBM/Epic Systems/Impact Advisors; Computer Sciences Corp./Allscripts/Hewlett-Packard; and Cerner/Accenture/Leidos (a spin-off of SAIC). These are large, accomplished and powerful companies, but some have blemishes that should not be minimized.

Cerner, CSC and Accenture all went to England in the past decade to make lots of money off the nationís $18 billion national EHR program, and all three failed to distinguish themselves. It wasnít entirely their fault; the national program had fatal errors from the start as it was run by U.K. government folks who didnít listen to anyone else, but the vendors were not adequately prepared for what they walked into. Now, these contractors are angling to get all that money from the militaryís health system, which is run by U.S. government folks who donít listen to anyone else, including Secretary of Defense Chuck Hagel who initially demanded a shared DOD/VA electronic health record.

Since late 2012, Allscripts has been recovering from a corporate self-implosion and has made considerable progress. Zacks Investment Research recently noted improved financial performance but expressed concerns about the companyís liquidity, ďwhich seems to be deteriorating as hinted by a declining cash balance and a wider long-term debt to capitalization ratio.Ē Further, it is fair to ask if Allscriptsí Sunrise system is really on par with Cerner and Epic hospital systems, and if Allscripts has the scalability of the other two.

Finally, and most worrisome, does anyone really think that in a few years DOD and VA will be interoperable? In July 2014, a Government Accountability Office audit concluded that both departments are not making a lot of progress on modernizing and integrating their EHRs. It hasnít been a priority yet and absent entering another war, why would it be more of a priority now?

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