VA secretary says Spokane VA’s budget won’t suffer as result of flawed records system

WASHINGTON – The secretary of veterans affairs on Wednesday pledged to look into reports that Spokane’s VA medical center could be forced to cut staff due to a budget deficit caused largely by a flawed computer system, but he stopped short of pledging not to reduce the hospital’s workforce.

In a news conference at VA headquarters, Secretary Denis McDonough said he stood by statements made by the chief of VA health care, Shereef Elnahal. In September and again on Friday, Elnahal said budget trouble related to the electronic health record system wouldn’t result in staff or service cuts at Mann-Grandstaff VA Medical Center, where the system has been tested since October 2020.

But in an email to supervisors at the medical center March 9, obtained by The Spokesman-Review, Mann-Grandstaff Director Robert Fischer said the regional office that oversees Northwest hospitals – called a “VISN” in VA parlance – had ordered the Spokane medical center to reduce its authorized staffing by more than 15% because of a projected budget deficit of about $35 million.

“If there’s any confusion on that, I’ll make sure that I follow up on it,” McDonough said, adding that he is in close contact with the regional office. “But as I understand it, what Shereef said is exactly what the VISN is saying, too.”

In 2018, the Trump administration awarded a $10 billion contract to the health technology company Cerner – which was acquired by the tech giant Oracle in 2022 – to replace the VA’s existing electronic health record system. In the more than two years since the department began testing the system at Mann-Grandstaff and its affiliated clinics across the Inland Northwest, it has hampered health care providers and contributed to patient harm, including the deaths of four veterans.

Despite those problems, the department launched the Oracle Cerner system at additional sites in Washington, Idaho, Oregon and Ohio in 2022. In April, VA leaders delayed future deployments of the Oracle Cerner system until the problems are fixed, but chose to keep using it at the hospitals and clinics where it has been deployed.

According to Fischer’s email, using the system has increased costs and decreased revenue enough to put Mann-Grandstaff on track for a $35 million deficit by the end of the fiscal year. That shortfall, he said, is effectively cutting the budgets of other hospitals in the region, including Seattle, Portland and Boise.

VA leaders have said pausing the system’s rollout means the department needs about $400 million more than they initially requested from Congress for the next fiscal year. On Wednesday, Rep. Cathy McMorris Rodgers, R-Spokane, sent McDonough a letter citing The Spokesman-Review’s reporting and asking him to commit to using the money Congress already has appropriated to prevent any reduction in staff or services at Mann-Grandstaff or the VA hospital in Walla Walla, where the system also has been launched.

“Under no circumstances should a VA medical center have to face a budget shortfall and a reduction in either staff or services as a result of the failed EHR,” McMorris Rodgers wrote, using the acronym for electronic health record. “VA medical centers still operating the Oracle Cerner EHR need more personnel and resources; not less.”

McDonough declined to make that commitment during the news conference, saying he would respond to the congresswoman’s letter directly. He said the VA has made a recent hiring push as it provides health care to more veterans than ever, adding, “We will spare no expense at getting precisely the people that we need to provide that care.”

Sen. Patty Murray, a Washington Democrat who chairs the Senate Appropriations Committee, said in a statement Friday that the VA has no shortage of money to retain staff at the hospitals affected by the Oracle Cerner system.

“Reducing staff at Mann-Grandstaff is completely unacceptable,” she said. “There is no question that VA has the funding necessary to continue these positions.”

In an interview after a hearing on May 9, Rep. Matt Rosendale, a Montana Republican who chairs the House VA Subcommittee on Technology Modernization, said he didn’t want to give the VA the full $1.8 billion the department requested before announcing the halt to the new system’s rollout. But he said he supports providing whatever funds are needed to restore services at the affected hospitals in Spokane; Walla Walla; Columbus, Ohio; and Roseburg and White City, Oregon.

“I have no qualms with providing the resources that they need,” Rosendale said. “We want to make sure that those five facilities are delivering the services at the levels that they were pre-Oracle.”

On Friday, Elnahal said the VA has a plan to make those facilities whole and “make sure that veterans are not impacted in any way in terms of the services available to them,” but he and McDonough have so far declined to say what that plan is and whether the department will set aside funding for the affected clinics and hospitals.