WASHINGTON, DC — VA has renegotiated its $10 billion contract with Oracle, the developer of its troubled new electronic health record (EHR) system, which is currently in use at only five sites across the VA healthcare system.
According to VA, the contract includes more accountability and significant penalties for the developer in the case of future system flaws or outages. It also provides more leverage for the department to use against Oracle to swiftly fix the ongoing issues at those five installation sites.
VA signed the original contract with the software developer Cerner in 2018. Cerner would go on to be bought by Oracle in 2022. The contract was for 10 years, the expected length of the EHR rollout, and included a five-year option period that expired last month.
The contract was criticized almost from the moment it was signed, with the chief complaint being the haste with which it was negotiated and the fact that VA chose to forego an open bid process, instead signing with Cerner, which was providing a similar version of the EHR to DoD healthcare facilities. The hope was that using the same base EHR would allow the two systems to better share patient information, and that Cerner’s experience with the DoD rollout would mean a smooth installation for VA. That proved not to be the case, however.
The EHR was launched at the Mann-Grandstaff VA Medical Center in Spokane, WA, in October 2020. Almost immediately, facility staff began uncovering significant problems with the system—ones that prevented them from carrying out daily tasks and for which they had to develop time-consuming workarounds. It would eventually be revealed that some of these system flaws contributed directly to patient harm, including several cases of “catastrophic harm.”
Over the last three years, the system has racked up hundreds of incident reports at the five installation sites in Spokane, Walla Walla, Columbus, Roseburg and White City, experiencing disruptions or full outages dozens of times. The two most recent outages occurred in April, both of which lasted about five hours.
Between the pandemic and ongoing system flaws, the timeline for the full EHR rollout has been delayed for years and is currently halted as VA tries to make the system work as advertised. This has left legislators deeply frustrated with both VA and Oracle, as well as at the original contract, which both Congress and the department say did not provide strong enough monetary penalties against the developer in case of problems.
According to VA officials, this newly renegotiated contract includes not just stronger penalties, but extensive metrics that can be used to gauge Oracle’s progress. Most notably, though, the new agreement is for five one-year terms rather than being a five-year contract. VA officials said they hope this will further motivate Oracle to show significant improvement over the next 12 months.
“We recognize that this one-year option that we’ve just exercised is a great opportunity for us to test whether we can get those five sites working,” VA Secretary Denis McDonough told legislators at a Senate hearing last month. “We have providers in each of those five sites and vets at each of those sites who have big expectations—and they’re tired of waiting.”
“We got improved accountability metrics, including enhanced credits to VA when the system is down, as it has twice in the last month, he added. “It’s maddening. There’s always a cost to that. We have to measure it in dollars, but it’s actually measured in vets’ outcomes.”
While the renegotiated contract seems to address many of the criticisms levied at the original agreement, legislators remain skeptical.
“While we appreciate that VA is starting to build accountability into the Oracle Cerner contract, the main questions we have about what will be different going forward remain unanswered,” Representatives Mike Bost (R-IL) and Matt Rosendale (R-MT) said in a joint statement. Bost is the chairman of the House VA Committee and Rosendale the chair of the VA Subcommittee on Technology Modernization.
“We need to see how the division of labor between Oracle, VA and other companies is going to change and translate into better outcomes for veterans and savings for taxpayers,” they said. “This shorter-term contract is an encouraging first step, but veterans and taxpayers need more than a wink and a nod that the project will improve. We will continue closely overseeing this effort to get veterans and VA staff the fully functional electronic health record they deserve.”
