The Department of Veterans Affairs (VA) is on the cusp of a significant moment as it prepares to restart deployments of its new Oracle Health electronic health record (EHR) system, a project that has been under scrutiny since its inception. With rollouts slated to begin in mid-2026, this endeavor represents a critical turning point in the modernization of veterans’ healthcare technology.
### Reset and Reassess: A Paused Mission
Back in May 2018, the VA initially signed a ballooning $10 billion contract—later revised to over $16 billion—with Cerner to revamp its aging health record system. This ambitious initiative aimed to create an interoperable EHR that would not only serve veterans but also mesh seamlessly with the Department of Defense’s (DOD) health record system, also powered by Cerner. Following Oracle’s acquisition of Cerner in 2022, the medical software division was rebranded as Oracle Health.
Unfortunately, the project has faced numerous setbacks. The first deployment at the Mann-Grandstaff VA Medical Center in Spokane, Washington, in 2020 revealed significant challenges, including usability issues and patient safety concerns. By April 2023, VA officials decided to pause most rollouts to address these issues.
### Restarting the Initiative
As of December 2023, the VA announced it would exit its reset phase and resume the deployment of the new system, starting with four medical sites in Michigan in mid-2026. VA Secretary Doug Collins has made it clear that modernizing the EHR is crucial. He aims to enhance the collaboration between the VA and Oracle and shift the responsibility back to Oracle for resolving system challenges.
This proactive approach includes regular site visits by VA Deputy Secretary Paul Lawrence to the facilities where the new EHR will be implemented. He has emphasized that achieving a fully functioning Federal EHR system at every VA medical center by 2031 is the department’s “no-fail mission.”
### Coordination and Improvements
During the reset period, the VA took the opportunity to renegotiate its contract with Oracle Health. The new agreement includes enhanced accountability measures and improved oversight at medical sites using the EHR, which many believe is essential for the project’s success.
On December 15, during a hearing of the House Veterans’ Affairs Technology Modernization Subcommittee, Dr. Neil Evans, the acting program executive director of the VA’s Electronic Health Record Modernization Integration Office, shared optimistic news. He reported that the VA has made significant strides in stabilizing its systems, boasting improved performance metrics and reliability. Evans highlighted ongoing enhancements, new features, and changes based on feedback from staff, making clear that the administration is committed to evolving the system.
### Legislative Scrutiny and Budget Considerations
Despite these positive developments, both Congress and the Government Accountability Office (GAO) remain watchful. The project’s estimated costs have skyrocketed, with a new lifecycle cost estimate hovering around $37 billion. A previous study predicted that the total expenses could climb to around $50 billion. Such financial projections naturally raise eyebrows among lawmakers, leading to calls for fiscal prudence and effective oversight.
The GAO has made 18 recommendations to further improve the EHR modernization process, including the need for an updated cost estimate and an integrated schedule that reflects the delays incurred during the reset period. Alarmingly, Congress has noted that 16 of these recommendations remain unimplemented.
### Concerns Over Rollouts
Lawmakers, including Rep. Tom Barrett, the chair of the House panel, have expressed significant concern over the VA’s approach of rolling out the system in batches. The simultaneous deployment across four Michigan sites may elevate the risk of encountering unresolved issues. While Evans asserts that this strategy will aid in the VA’s market-based deployment approach, apprehensions linger about the potential for additional complications.
Additionally, the engagement with GAO’s recommendations has come under scrutiny, with officials like Rep. Nikki Budzinski questioning the VA’s responsiveness to essential suggestions that could enhance the initiative’s success.
### Financial Strings Attached
In a recent spending package, Congress introduced provisions aimed at increasing transparency around the EHR modernization project. Lawmakers allocated $3.4 billion for its deployment in fiscal year 2026 but included stipulations that would withhold 30% of that funding until July 2026. This funding would hinge on the VA providing an updated lifecycle cost estimate and a detailed implementation schedule by facility.
Moreover, numerous accessibility issues remain unresolved, with reports suggesting that the system is not fully compliant with federal accessibility guidelines. This adds another layer of complexity to an already challenging initiative.
Both the VA and Oracle Health have avoided commenting on these accessibility issues due to ongoing litigation, highlighting the myriad hurdles that still lie ahead as the modernized EHR is poised to finally see broader adoption. The outlook is cautiously optimistic, but the challenges before them cannot be understated.
