A U.S. Department of Veterans Affairs decision to pursue a new direction in processing health records has created a highly visible endorsement of the use of commercial off-the-shelf (COTS) information technology by federal agencies. President Trump cited the VA’s action as an example of the administration’s commitment to vastly improve federal IT management.
The VA earlier this month awarded a contract to Cerner to develop an electronic health record (EHR) system for the department. The Cerner program will replace the existing VA patient data system, known as “VistA,” which was developed in-house and has been in use for at least 30 years.
The sheer size of Veterans Affairs, which serves 8.7 million veterans through 1,700 facilities, makes the decision to use an outside contractor noteworthy, as federal agencies strive to meet recently introduced initiatives promoting the outsourcing of information technology.
For vendors, the policy turn indicates more potential in the federal market. VA did not immediately disclose the value of the Cerner contract, but it could amount to several billion dollars. The U.S. Department of Defense in 2015 awarded a similar medical records contract to a consortium of companies including Leidos, Cerner and Accenture, which was valued at US$4.3 billion. DoD noted that the eventual cost of the program could reach $9 billion.
Time for a Change
The VistA system, which VA personnel designed in their off hours decades ago, has been heralded as a pioneering effort in EHR management. The program became a template for both government and private healthcare providers.
However, VA Secretary David Shulkin recently decided that it would be more appropriate for the agency to concentrate on healthcare and leave data processing to commercial specialists.
The department’s system “is in need of major modernization to keep pace with the improvements in health information technology and cybersecurity,” Shulkin said.
“Software development is not a core competency of VA,” he added.
“I said recently to Congress that I was committed to getting VA out of the software business, that I didn’t see remaining in that business as benefiting veterans,” Shulkin said, “and because of that, we’re making a decision to move towards a commercial off-the-shelf product.”
In addition to the need for modernization, the shift to the Cerner offering was triggered by the VA and DoD’s shared goal to create a seamless health record that would follow service personnel from active duty through veteran status.
After spending hundreds of millions on the effort, the agencies abandoned the project, largely because of the inability to provide proper interoperability functions, according to Shulkin. DoD then engaged the consortium of Leidos, Cerner and Accenture to provide EHRs for the military.
The prudent course for VA would be a similar approach based on the same technology, Shulkin concluded. As a result, the Cerner contract was issued as a sole source, noncompetitive transaction that potentially will assure compatibility by way of Cerner’s Millenium offering as the core technology for both the DoD and VA.
Another benefit of the sole source award is that it will save time, given that the DoD competitive process took more than two years from the initial Request for Proposals to the final contract award, Shulkin noted.
The emphasis on commercial off-the-shelf solutions began late in the Obama administration.
“Agencies need a more centralized and collaborative software management approach so that they can optimize utilization of commercial and COTS software licenses and maximize the use of best-in-class software purchasing and management solutions,” Anne Rung, then U.S. chief acquisition officer, said last year.
The effort to upgrade federal IT has been reinforced by the Trump administration.
“Our goal is to lead a sweeping transformation of the federal government’s technology that will deliver dramatically better services for citizens [and] stronger protection from cyberattacks,” the president said in a recent meeting with technology executives.
“VA Secretary Shulkin recently announced that we’re upgrading technology to allow the seamless transfer of veterans’ medical records from the Defense Department, which has been a huge problem for decades and decades for our great veterans,” Trump said.
The VA could encounter significant hurdles in implementing the COTS system.
“Many COTS solutions are built around private sector healthcare models and workflows with zero direct application to how the VA actually works, while VistA was developed specifically to meet VA’s needs according to its best practices,” noted Deanne Clark, senior health informatics consultant for DSS, in an online post.
Many private sector COTS vendors of EHR programs have failed to meet federal interoperability standards, she pointed out.
Additionally, the VistA system, as an open technology government-developed program, has been adopted widely for use in the private sector health system, Clark said, and it received a top ranking by 20,000 clinicians.
The VA will face challenges switching to an unproven system while simultaneously maintaining the existing VistA system during the conversion period, she said.
Despite those misgivings, Clark’s company, which has been a supporting contractor to VA, hopes to remain steadfast in that role.
“We want to see VA succeed at this effort,” she told the E-Commerce Times.
While the VA will switch out of VistA, Clark still sees value in the private sector version of VistA that will remain a service provided by her company.
“We support VA and our veterans, but we will continue to innovate, enhance, and modernize VistA for our present and future commercial clients, and hopefully throughout the duration of VA’s transition to COTS,” she said.
Multiple factors went into VA’s choice to use the COTS approach, Clark acknowledged.
“I know that Secretary Shulkin based the decision on a number of factors, and I am not aware of all of the information he had available to make that decision,” she said.
Contracting Competitors Busy at VA
While potential competitors for the VA contract could be miffed that the department used a sole source procurement, several seem satisfied with their existing business with the department.
For example, VA early last year gave 21 companies spots on a multiyear IT support contract known as “T4NG,” with a potential value of $22 billion.
The department in 2015 awarded a $624 million IT contract for health scheduling services to a former Lockheed Martin unit that is now a part of Leidos, along with Epic Systems, a major health IT provider.
“We remain focused on and committed to our mission of delivering a world-class electronic health records [system] to the men and women of our Armed Forces,” said Leidos Senior Vice President Jerry Hogge.
“Our MHS Genesis solution was designed with system interoperability in mind. The VA Secretary’s decision to accelerate getting the DoD and VA on a common electronic health record system represents a profoundly important milestone for our nation’s veterans, their families and beneficiaries,” he told the E-Commerce Times.
Epic declined to comment directly on competitive issues but noted its continuing work with VA.
The company is “proud to serve our veterans both through the VA scheduling project and through our customers that care for millions of veterans across America,” Epic said in a statement provided to the E-Commerce Times by spokesperson Meghan Roh.
In fact, there is a good possibility that Cerner might enlist other companies to support the COTS contract with VA.
“We look forward to sharing more information as we build the team of innovative and experienced partners that will join us to complete this vital work,” Cerner said in a statement provided to the E-Commerce Times by spokesperson Dan Smith.
In cooperation with the DoD, the VA project will improve interoperability, Cerner said, as well as the creation of a “single longitudinal health record that can facilitate the efficient exchange of data” for current and former service members.