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DoD, VA have spent $1B trying to build joint health records system

Jun. 12, 2013 - 04:30PM   |  
A wounded soldier receives treatment at a rehabilitation center at Walter Reed National Military Medical Center. When the soldier becomes a veteran, the Defense Department will confront a longtime challenge in transferring his health records electronically to the Veterans Affairs Department. (KEVIN LAMARQUE/AFP via Getty Images)

The Defense and Veterans Affairs departments appear to be abandoning plans to build a joint system to seamlessly share electronic health records when military service members become veterans.

Last month, Defense acquisition chief Frank Kendall announced the department’s plans to use commercial software to replace its existing electronic health records system, but said any system the department acquires will be able to communicate with VA’s system. VA had been pushing DoD to adopt its system instead, after the departments had decided this year not to build a new, joint system.

DoD’s decision follows a 30-day review of the Integrated Electronic Health Record (iEHR) program, an initiative that was supposed to replace past projects that sought to modernize the departments’ separate systems.

In a May 21 memo to Kendall, Defense Secretary Chuck Hagel said based on the review’s findings, which were not made public, he is “convinced that a competitive process is the optimal way to ensure we select the best value solution for DoD.”

Lawmakers and industry representatives have expressed concerns about the new tack. Both departments, including an interagency program office created to oversee joint electronic health records initiatives, spent more than $1 billion on their most recent efforts to build a joint system, according to lawmakers. The interagency program office alone has spent about $362 million this year on these efforts, according to figures released by Rep. Phil Roe, R-Tenn.

Meanwhile, the House passed a 2014 appropriations bills last week that would limit funding for development of the integrated health records system to no more than 25 percent of the $344 million in VA funding currently available for that initiative. The bill would restrict funding until the Government Accountability Office confirms that the system proposed by VA and DoD meets requirements.

DoD’s decision to acquire a new system follows the DoD and VA secretaries’ announcement in February to modernize and integrate their separate systems, as opposed to building a single system. The change was due in part to the skyrocketing costs of continuing work on a joint system. Costs would have reportedly ballooned from an estimated $4 billion to $12 billion.

As of last month, DoD had not estimated the cost of replacing its system with a commercial solution. VA, meanwhile, has decided to modernize its existing electronic health record system, which it said will be cheaper than procuring a commercial solution.

At a House committee hearing this year, Roger Baker, then chief information officer at VA, said the department estimated it would cost $16 billion to replace its existing system with a commercial electronic health record system.

DoD’s Kendall will assume direct responsibility for DoD health care records modernization and interoperability and will lead DoD coordination with VA on related technical and acquisition matters. How this will affect the role of Elizabeth McGrath, DoD’s deputy chief management officer and performance improvement officer, who had been leading DoD’s modernization effort, is unclear. Kendall said McGrath would still be involved in the project.

VA’s Baker, who was intimately involved in the project, has since resigned.

Staffing challenges within the interagency program office have been an issue. As of January, the interagency office was staffed at about 62 percent of the 236 employees allotted by both departments, according to a February Government Accountability Office report. Hiring more staff is one of the biggest challenges, GAO said.

DoD, in February, requested information from industry on how to develop a new core electronic health record system, but it has not said what core capabilities such a system would provide.

A comprehensive core system dependent on a single commercial software vendor could create a situation where the department is stuck using that system, even if it laterdoesn’t fully meet its needs, according to an industry source familiar with the electronic health record effort. The vendor could give DoD an attractive price and capabilities upfront, but modifying the system could be be very costly, said the source, who didn’t want to be named. DoD has not ruled out using at least parts of VA’s system, which is built on open source software, but some question why DoD would move forward with full and open competitions only to revert to using VA’s system.

“The lifetime cost of maintaining and serving software is cheaper and [more]efficient in an open environment,” said Seong Ki Mun, president and CEO of the Open Source Electronic Health Record Agent. The organization is currently under contract with VA to assist in modernizing the department’s electronic health record system.

“Managing open source code is like managing a live animal,” but it doesn’t mean software in use gets changed in real time, Mun said. There is a selective process for improving the software, he said.

But DoD has expressed concern that open source software would not be supported by a dependable, large systems integrator, Mun said. In the community supporting modernization of VA’s health record system, there are a number of big companies selling products and services to support the system’s software, but they’re not one of the large integrators DoD is familiar with, Mun said.

“The government’s job is to come up with the best solution, whether it’s open-source or not,” he said.

DoD spokeswoman Air Force Lt. Col. Melinda Morgan said the department would not release the names of the contractors that responded to its request for information because of legal issues. On, nearly 30 companies are listed as interested vendors. Although none of the large Defense contractors is listed, a number of them have moved into the health care space, including Lockheed Martin, General Dynamics, General Electric, CACI and SAIC.

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