VA needs updated cost estimate and rollout schedule for EHR, watchdog says

As the Department of Veterans Affairs prepares to resume deployments of its new electronic health record system at 13 medical facilities next year, a report from a congressional watchdog is calling for VA to get a better idea of the troubled modernization project’s total cost and expected timeframe for completion. 

The Government Accountability Office’s review, published on Wednesday, comes as VA moves out of pause on most rollouts of its new EHR software that was instituted in April 2023 following a series of technical, performance and safety concerns associated with the system. 

The report found that VA “is making incremental improvements to the new electronic health record system but much more remains to be done.” This includes the need for the department to develop an updated cost estimate and integrated master schedule that account for the project’s operational pause and previous delays. 

VA initially signed a $10 billion contract — which was 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 combined unit as Oracle Health.

Almost as soon as the new system was implemented in 2020 at the Mann-Grandstaff VA Medical Center in Spokane, Washington, however, the modernization project was plagued by a series of glitches and troubling reports about patient safety. Prior to the pause, VA had deployed the system at only five medical facilities. The department subsequently worked with DOD to roll out the new system at a joint facility in North Chicago last March during the “reset” period. 

“Given the pause, the volume and complexity of user-driven priority projects, other delays, and continuing issues, an updated cost estimate is essential to understanding the magnitude of VA’s investment,” GAO’s report said. “Similarly, a realistic and updated integrated schedule can show when major events are expected as well as the completion dates for all activities leading up to them, which can help determine if the program’s parameters are realistic and achievable.”

The report echoes many of the same concerns that were expressed at a House hearing last month, during which lawmakers and federal watchdog officials also pushed for VA to craft an integrated master schedule and develop an updated lifecycle cost estimate. Estimates for the project’s full completion have ranged from $16.1 billion to almost $50 billion.

VA announced in December that it was readying to deploy the new system at four of its Michigan-based medical facilities in mid-2026. The department subsequently said earlier this month that it would be adding nine to-be-named sites to the deployment schedule for next year. 

Beyond recommending that VA develop the updated cost estimate and master schedule, the watchdog also said the department should identify “baselines and performance targets” for the metrics it uses to measure program and system performance.

While the department agreed with two of the recommendations, it said it “concurred in principle” with the need to maintain a lifecycle cost estimate, given the uncertainty of what will happen after the current agreement with Oracle Cerner, now Oracle Health, ends.

“VA noted that it intends to employ best practices to develop a cost estimate for site deployments through May 2028, which is when the current contract with Oracle Health concludes, assuming all options are exercised,” the report said. “However, the department acknowledged that not all VA medical centers would have the modernized EHR system by the end of the contract; therefore, VA stated that the life cycle cost estimate would be dependent on a future acquisition.”