Chair Heinrich Opens MilCon, VA Appropriations Subcommittee Hearing On VA Electronic Health Record Modernization

WASHINGTON – Today, U.S. Senator Martin Heinrich (D-N.M.), Chair of the Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies opened a hearing to receive an update on the U.S. Department of Veterans Affairs’ (VA) efforts around Electronic Health Record Modernization.

VIDEO: Chair Heinrich Opens MilCon, VA Appropriations Subcommittee Hearing [HD DOWNLOAD LINK HERE]

Witnesses appearing in today’s hearing include:

Panel I:

• Donald M. Remy, Deputy Secretary for VA
• Shereef Elnahal, MD, Under Secretary for Health for Veterans Health Administration
• Terry Adirim, MD, Program Executive Director for VA Electronic Health Record Modernization Integration Office
• Jon J. Rychalski, Assistant Secretary for Management and Chief Financial Officer for VA

Panel II:

• Mike Sicilia, Executive Vice President of Industries for Oracle
• Brian Rieksts, PhD, Research Staff Member for the Cost Analysis and Research Division at the Institute for Defense Analyses
• David Case, Deputy Inspector General for VA

Testimony and an archived video of the full hearing are available here.

Senator Heinrich’s remarks as prepared for delivery are below.

Good morning.

This hearing of the Military Construction, Veterans Affairs, and Related Agencies Appropriations Subcommittee is now called to order.

Today we will discuss VA’s efforts around Electronic Health Record Modernization – or EHRM.

This is a large but important initiative that was promised to result in a single health record for an individual from Service entry through a veteran’s life, with seamless health data sharing.

Unfortunately, implementation efforts to date have been plagued by delays, provider complaints, patient safety concerns, and questions about the accuracy of reporting to Congress, particularly related to costs.

Our goal today is to address these issues over two panels.

With that I would like to welcome Donald Remy, Deputy Secretary of Veterans Affairs and the accountable official for VA’s Electronic Health Record Modernization initiative.

He is accompanied by:

• Dr. Terry Adirim, the Program Executive Director of the EHRM Integration Office;
• Dr. Shereef Elnahal, VA’s Under Secretary for Health; and
• Mr. Jon Rychalski, Assistant Secretary for Management and Chief Financial Officer.

I want to start by reiterating the Committee’s support for VA’s EHRM objective.

This is an extremely important effort to solve a decades-long problem, and it is essential that VA get it right for the health and safety of veterans.

In addition, this is a major investment and VA has a responsibility to taxpayers to ensure the system works and its success can be measured.

In 2018, when VA announced it was signing a sole source contract with Cerner Corporation – now known as Oracle Cerner - VA estimated its EHRM initiative would cost $16.1 billion over 10 years.

Congress was told that this amount incorporated the full cost of deploying and operating the new Health Record across VA’s enterprise, including $10 billion for Cerner Corporation to provide the record itself.

Since that initial estimate, we learned that VA did not include all of the costs required for a successful implementation, and did not report those omissions to Congress in a timely way.

This lack of transparency was disappointing and the Committee is glad that VA has made the effort to be more forthright under new leadership.

Based on a recent independent cost estimate completed by the Institute for Defense Analysis, at VA’s request, the cost to the Department could be significantly more than the initial estimate.

The nearly $50 billion estimate assumes a longer deployment timeline and 15 years of sustainment costs, as well as additional related and necessary costs that VA did not initially contemplate.

The components and elements raised by IDA are reasonable and appropriate to consider, which is why it is standard practice to have a third party complete a life-cycle cost estimate before contracts are awarded.

It is irresponsible that this step was skipped by VA when rushing to sign a sole-source contract in 2018, though I will acknowledge that none of today’s witnesses who are responsible for EHRM today were part of that decision.

We will discuss that estimate more in the second panel, and would appreciate VA’s view of it.

To date, Congress has appropriated $8.2 billion since fiscal year 2018 to VA’s dedicated account for this effort, though more has been spent.

Of this money, VA has allotted about $4.1 billion – 40 percent of the contract ceiling - toward the Oracle Cerner contract, and the system has been deployed to five sites, with 166 to go.

I understand that there was a lot of upfront cost to the system, but would like a clear understanding of what that funding has bought us.

Closures related to COVID had a huge impact on rollout, but that is not the only challenge this effort is facing. Of significant concern is how the new system has been received by providers.

This initiative will not succeed without provider buy-in.

It is not surprising that productivity decreased following rollout, but it is not clear whether it has improved over time.

I understand that providers from the first rollout site, which deployed nearly two years ago, are still raising concerns.

More alarming are concerns that the new system is a risk to patient safety, and reports of repeated system degradations and outages.

We know VA and Oracle Cerner have taken steps to address these issues, including training processes.

I look forward to hearing about how that collaboration is moving forward.

Finally, I would like to discuss VA’s deployment schedule.

Last year VA took a strategic pause to assess the program and lessons learned.

The last deployments were in June, and VA has postponed all planned rollouts until 2023, while still intending to meet the goal to be fully deployed in 2028.

I am glad VA is not rushing deployments until there is more confidence in the likelihood of success, but the Department needs to be straight forward with Congress about what is reasonable and achievable.

This effort is too important and it needs to succeed.

With that, I recognize Ranking Member Boozman for his opening comments.