VA secretary says department shouldn’t need more money from Congress for $16 billion electronic health record system

WASHINGTON – The head of the Department of Veterans Affairs said Monday the department will not need to request more money from Congress to complete the nationwide rollout of a computer system projected to cost at least $16 billion over a decade, after an internal watchdog agency said the already-delayed effort’s cost is likely to rise.

VA Secretary Denis McDonough’s remarks came after the VA Office of Inspector General released a report Monday morning that estimated the effort to replace the department’s homegrown electronic health record system – which health care providers use to track patient information and coordinate care – would cost roughly an additional $2 billion for each year it runs behind schedule.

“I continue to believe that we have the budget authority that we need over the life of this project,” McDonough said in response to a question from The Spokesman-Review. “If we have reason to believe that that’s changed, we’ll obviously go straight to Congress and talk that through with them. … But at the moment, I believe that we have the budget authority we need.”

VA has come under fire from lawmakers and government watchdog agencies for a lack of transparency about the cost of the project, including a $10 billion contract with Cerner Corp. to develop the new system and an estimated $6 billion more for technology infrastructure upgrades and other spending needed to make it work. Two reports from the Office of Inspector General in 2021 found VA likely underestimated the total cost by as much as $5.1 billion, for total cost of more than $21 billion.

The report released Monday projected the department would spend an extra $1.95 billion for each year beyond the planned 10-year implementation period. The initial launch at the Mann-Grandstaff VA Medical Center in Spokane was delayed twice before it went ahead, amid a local surge in COVID-19 cases, in October 2020.

Two years after the rollout was set to begin, the system has been implemented at just two of the nation’s 171 VA medical centers and fewer than a dozen of the department’s more than 1,000 clinics. The Cerner system launched in Walla Walla on March 26 and is scheduled to go live in Columbus, Ohio, on Saturday.

After The Spokesman-Review reported that a veteran was hospitalized at Mann-Grandstaff in March with heart failure after the Cerner system contributed to an important medication being mistakenly stopped, which hospital leaders reported as potentially “severe harm,” McDonough said in the press briefing he was not aware of any other cases in which a veteran was harmed in connection to the Cerner system.

VA officials, Cerner executives and a representative from the Office of Inspector General are set to testify before a House VA subcommittee Tuesday on problems with the Cerner system identified in Spokane and other sites in the Inland Northwest. McDonough will appear before the full House VA Committee about the department’s budget on Thursday.