VA overhauls operations: Contract cancellations and electronic health record modernization

The Department of Veterans Affairs (VA) is undergoing significant changes to improve efficiency, cut costs, and enhance healthcare and benefits for veterans. A key part of this transformation includes the cancellation of hundreds of contracts that were deemed non-mission-critical or duplicative. Additionally, the VA has launched a long-awaited effort to modernize its electronic health record (EHR) system through a $10 billion contract with Cerner Corporation.

This initiative is part of a broader strategy to streamline operations and ensure that funding is directed toward critical veteran services. With contract reviews, new system implementations, and comparisons of EHR systems, the VA aims to improve usability, integration capabilities, and overall healthcare quality for veterans.

VA cancels 585 contracts to optimize resources

As part of an extensive review of nearly 2,000 professional service agreements, the VA has identified 585 contracts for cancellation. These contracts, valued at $1.8 billion, were found to be redundant or unnecessary, leading to the reallocation of $900 million to healthcare, benefits, and other essential veteran services.

Cutting redundant contracts

The contracts slated for cancellation primarily include administrative services that the VA can handle internally. Examples include leadership coaching, staff mentoring, and meeting agenda preparation. Some contracts also involved creating “contract deliverables” for other contractors, leading to inefficiencies and unnecessary costs.

The VA carefully evaluated each contract to ensure that eliminating it would not negatively impact veteran services. Career subject-matter experts, senior leaders, and contracting officials reviewed the contracts before making final decisions.

Crucially, contracts that directly support veterans, such as those related to patient care, medical services, and third-party certifications, remain in place. The VA also took steps to consolidate similar contracts to reduce duplication while maintaining necessary functions.

Focusing on veteran-centered spending

VA Secretary Doug Collins emphasized that every dollar saved from unnecessary contracts would be redirected toward veteran services. “We are putting veterans first at VA. That means finding new and better ways to do our jobs and focus our resources,” Collins said.

This initiative aligns with broader efforts to optimize VA resources. The department manages nearly 90,000 contracts worth more than $67 billion, and the current review process is expected to be the first step in a larger effort to improve contracting efficiency.

$10 billion electronic health record overhaul

The VA’s other major modernization effort involves replacing its outdated Veterans Information Systems and Technology Architecture (VistA) with the Cerner Millennium EHR system. This transition is part of a $10 billion, decade-long contract designed to improve healthcare delivery for veterans.

By adopting the same EHR system as the Department of Defense (DoD), the VA aims to create a seamless medical record system for service members transitioning from active duty to veteran status. This integration is expected to reduce administrative burdens and enhance care coordination.

EHR system reviews and comparisons

The decision to implement Cerner’s EHR system followed extensive reviews and comparisons of EHR systems. The VA considered various options, including Epic EHR, NextGen EHR, and Cerner EHR, before finalizing its choice.

Epic EHR system review: Epic is a widely used EHR system known for its robust usability features and advanced integration capabilities. However, its high pricing and customization requirements made it less suitable for the VA’s large-scale needs.

NextGen EHR system review: NextGen offers a user-friendly interface with strong interoperability features. However, it is more commonly used in outpatient settings and lacked some of the scalability required for the VA.

Cerner EHR system review: Cerner Millennium was chosen due to its ability to integrate with the DoD’s MHS Genesis platform. It offers strong interoperability, comprehensive healthcare features, and scalable pricing models suitable for large government healthcare systems.

Challenges and oversight in the EHR transition

The VA’s EHR modernization effort has faced delays due to leadership changes and concerns about interoperability. Former VA Secretary David Shulkin had initially planned to finalize the Cerner contract in the previous fall, but negotiations were paused to address concerns about seamless data integration.

Ensuring a smooth rollout: Congress has closely monitored the project, with House Veterans Affairs Committee Chairman Phil Roe emphasizing the need for oversight. Lawmakers have visited DoD’s early implementation sites to assess the progress of MHS Genesis, which has encountered operational challenges.

The DoD’s initial testing found that the system was “neither operationally effective nor operationally suitable.” Despite these setbacks, the Pentagon remains committed to its deployment schedule, and the VA is working to learn from these early challenges to ensure a smoother implementation.

To support the transition, the VA has allocated $782 million in funding for the current fiscal year. Additionally, the department plans to establish a separate $1.2 billion fund to sustain the modernization effort.

Highlighting usability, features, and pricing in the new EHR system: One of the primary focuses of the Cerner EHR system review was usability. The system is designed to improve workflow efficiency, enhance patient data accessibility, and reduce administrative burdens for healthcare providers.

The Cerner EHR system offers several key features designed to enhance efficiency and patient care. One of its standout capabilities is interoperability, allowing seamless integration with the Department of Defense’s MHS Genesis platform for improved data sharing between agencies. The system also utilizes cloud-based storage, which enhances accessibility while reducing reliance on outdated infrastructure.

Additionally, real-time updates ensure that patient records are instantly refreshed, enabling better coordination among healthcare providers. Another important feature is its customizable dashboards, which give medical professionals tailored views of patient information, helping streamline workflows and improve decision-making.

The $10 billion contract covers a decade-long rollout, with scalable pricing options based on the VA’s evolving needs. Cerner’s EHR system offers flexible integration capabilities, allowing it to work alongside existing VA healthcare technologies while ensuring a smooth transition.

Redirecting VA resources for maximum impact

The VA’s contract cancellations and EHR system upgrades reflect a broader strategy to redirect resources toward core veteran services. By reducing inefficiencies and focusing on contracts that directly contribute to veteran care, the department aims to create a more responsive and accountable healthcare system.

While the VA is eliminating unnecessary contracts, it is also investing in new agreements that directly support veteran care. In some cases, new contracts will replace outdated ones to maintain or enhance service quality.

“This transition should be done right, not fast,” said Chairman Phil Roe, emphasizing that while cost savings are important, the quality of veteran services must remain the top priority.

The future of VA modernization efforts

The VA’s efforts to streamline operations are expected to continue, with further contract audits and additional modernization initiatives on the horizon. The department anticipates additional savings as it refines its contracting approach, allowing more funds to be directed toward veteran care.

Ultimately, these initiatives are designed to enhance the VA’s ability to serve veterans and their families. By eliminating wasteful spending and implementing modern technology, the department aims to provide more efficient, high-quality care. The modernization efforts signal a renewed commitment to prioritizing veteran well-being, ensuring that resources are directed where they are needed most.

As the VA moves forward with these reforms, continued oversight and adaptability will be crucial in making the transition as smooth and effective as possible. With billions of dollars at stake and the well-being of veterans on the line, the department must strike a careful balance between cost-cutting and service enhancement to fulfill its mission effectively.