VA to spend $10B on Cerner EHR to replace legacy system

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The Department of Veterans Affairs will spend $10 billion over 10 years to implement a new Cerner electronic health record to replace its decades-old legacy system.

By comparison, the Department of Defense in 2015 awarded a $4.3 billion contract to a Leidos-led team to modernize its EHR with Cerner’s Millennium—the same system that the VA is procuring. However, the VA’s healthcare system is about three times the size of DoD’s, has 2.5 times more facilities, 3.7 times more interfaces and triple the number of licensed users.

While the VA is still negotiating with Cerner and hopes to soon sign a contract, agency officials for the first time disclosed publicly the $10 billion price tag for the high-profile EHR project in testimony on Thursday before the House Oversight and Government Reform Committee’s IT Subcommittee.

“This is going to be the largest implementation of a healthcare system EHR ever—and, it’s going to be a really big undertaking,” Scott Blackburn, the VA’s acting chief information officer, told lawmakers. “The key difference between previous efforts is we’re going to be buying a commercial off-the-shelf solution and absolutely minimizing the customization.”

“The $10 billion is not what’s needed at contract award—the $10 billion is for the duration of the contract, and I’m really not at liberty to talk about specifics of the price negotiation (with Cerner),” said John Windom, the VA’s program executive for EHR modernization.

In addition, agency officials testified that the VA’s patient population will require the purchase of a greater number of services and capability requirements than DoD, including greater healthcare interoperability and information exchange nationwide with community providers.

Also See: VA requests $782M in initial funding for Cerner EHR

“We realize implementing Cerner Millennium across the country’s largest integrated healthcare system will not be easy—but, we strongly believe it is the right thing to do,” said Blackburn. “Our new electronic health record system will enable VA to keep pace with the improvements in health IT and cybersecurity, which the current system—VistA—is unable to do.”

According to Blackburn, currently there are 130 separate instances, or distinct versions, of the VistA EHR. Further, he reported to the subcommittee that the VA would have to spend about $19 billion over 10 years to upgrade and maintain VistA to industry standards, which would still not provide all the needed enhancements, upgrades and seamless interoperability with DoD.

“Maintaining our current VistA system is not an option. It would be incredibly costly,” commented Blackburn. “By moving to the same exact product—the same exact instance that DoD has—it will all be one record.”

He added that the VA is working with the White House’s Office of American Innovation—created in March by the Trump administration—to figure out how to achieve interoperability with community providers in the private sector. At the same time, Blackburn noted that Cerner is a member of the CommonWell Health Alliance, which includes a “network of private hospitals,” but “no solution right now will give us 100 percent” interoperability with the private sector.

“That solution does not exist right now, but I think that would be a longer term goal for our country,” concluded Blackburn. “That’s actually a problem that we’re working with the White House on.”

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