Cerner Corp. Wins VA EHR Contract

Cerner Corp. nailed down a $4 billion-plus Department of Defense contract in 2015. The deal with the VA bypassed the typical public bidding process.

Department of Veterans Affairs Secretary David Shulkin in a White House briefing last week (screenshot courtesy whitehouse.gov)

Perhaps one of the few universally agreed-upon notions in American politics is the need to modernize the Department of Veterans Affairs, on multiple fronts. One of the most glaring is its cybersecurity track record: for more than a decade and a half straight, the Department failed its annual audit under the Federal Information Security Management Act (FISMA), with each yearly report highlighting material weaknesses.

The VA today announced a move likely intended to close some of those gaps, the decision to port the their electronic health records system to the same one already in use by the Department of Defense. The contract was directly awarded to Kansas City-based Cerner Corp., and will ideally allow for seamless integration between the two Departments' systems, allowing the records to transfer more smoothly as active duty military members move into retirement and VA oversight.

Dr. David Shulkin, the Department’s Secretary, gave a candid assessment regarding the state of the VA last week that hardly blinked while laying bare a host of departmental issues. The speech covered 13 areas of need, including problems of access, transparency, out-of-date reporting systems, and IT.

“With the exception of one area…we will not be coming back to Congress or the administration to ask them for additional money. That one exception is to modernize our IT systems,” he said, continuing to mention that he would announce before July 1st a decision “that’s either going to look towards outsourcing our current system to a commercial vendor or picking a system that is a commercial off-the-shelf system and to get VA out of the software business, and that will require an initial capital investment that’s not in our fiscal year budget.”

Today’s announcement would seem to be the result of that decision. Asked immediately after if an IT upgrade was the most expensive task on the VA’s plate, he instantly said “Yes.”

Cerner Corp. nailed down a $4 billion-plus Department of Defense contract in 2015. The deal with the VA bypassed the typical bidding process, given the priority outlined by the Secretary Shulkin last week. According to the Wall Street Journal, neither contract value nor implementation timeline have yet been disclosed.

In the Department of Defense deal, Cerner, rather than the federal government, stores the data involved. The provision came as an after-the-fact modification to the initial contract, announced on the eve of 2016. The “sole-source award” to house the EHRs was originally budgeted to cost $50 million over the course of the 10-year contract, later adjusted to over $70 million.

Calling it a “national public health crisis,” Shulkin did direct attention to the issue of veteran suicides, which studies estimate number more than 20 every day. He cited the effort to change that troubling pattern as his top clinical priority.