When You Mix Military and Health Bureacracy



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When You Mix Military and Health Bureacracy
By Aditya Singh • Issue #21 • View online
The US Department of Defense (DoD), Coast Guard (USCG), and Veterans’ Affairs (VA) are replacing their electronic health record systems with a singular connected ecosystem using the Cerner electronic health record (EHR) software.
Just implementing this new solution was estimated to cost $16 billion when the VA testified to Congress in 2018. Now, watchdogs are saying that costs were underestimated by billions, and a series of critical software errors and cybersecurity threats are delaying the modernization project.
Technology is a critical area of investment as we seek to build a more connected and intelligent healthcare system, and watching from the missteps of a large implementation by federal agencies can offer vital warnings.

Winning Billions Back-to-Back
The Department of Defense (DoD) oversees much of the US military and operates the Tricare, the healthcare program for active duty Americans and their families. In 2013, the DoD announced the Healthcare Management System Modernization contract, which the EHR vendor Cerner won a multi-billion dollar deal for.
Cerner’s solution to revamp the DoD’s healthcare software was an EHR software called MHS Genesis.
Just two years later, the Department of Veterans’ Affairs (VA) announced intentions to revamp its own EHR systems, ideally in a way that would build atop and work with the MHS Genesis system being rolled out with the DoD. The entire modernization program is called the Electronic Health Record Modernization (EHRM).
Cerner ended up winning that contract as well, and in 2018, the company estimated that the EHRM would cost $16.1 billion over 10 years, including $4.3 billion in upgrading infrastructure like desktop/laptop computers and systems interfaces.
Cerner's industry partners in the rollout of the Electronic Health Record Modernization (EHRM) program with the VA.
Cerner's industry partners in the rollout of the Electronic Health Record Modernization (EHRM) program with the VA.
What is Cerner?
Headquartered in Kansas City, Missouri, the Cerner Corporation is a software vendor for health information technology (HIT). Since its inception in 1979, the company has built and acquired a number of products like Millenium+, its flagship cloud-based EHR today.
The EHR market is currently partially dominated by Cerner, with rivals Epic and AllScripts occupying other large swaths of the care provider market.
In 2005, Cerner, along with General Electric and other HIT vendors paid the Rand Corporation to conduct a study on the economic savings that could be generated with EHR adoption. The 2005 study claimed $81 billion in savings annually. This study helped push the 2009 HITECH Act through Congress, which gave billions in federal stimulus to encourage adoption of EHR across the country.
Cerner revenues tripled from $1 billion to $3 billion from 2005 to 2013.
A high cost to implement, redundancy in data, and the high administrative burdens of using EHR meant that only 27% of physicians made more money after implementing EHR.
The company has also been in hot water for costly installations and defective software.
A rushed $31 million installation of Cerner in an Athens, GA health system led to medication mistakes, communication glitches, and scheduling debacles that spiraled into the CEO and CIO of Athens Regional Health System resigning.
A New York hospital settled with Cerner for $38 million after the Cerner EHR failed to send out bills in 2017 which led to significant financial losses and forced layoffs in coming years.
In 2022, the Oracle Corporation, known as one of the largest software companies in the world, bought the Cerner Corporation for a whopping $28.3 billion deal. Among other concerns with the Oracle acquisition is that the company will be working to leverage access to patient data for building other cloud products and probably cross-selling its other extensive database products.
Overbudget and Delayed
As of June 2022, the DoD estimated that the rollout of the MHS Genesis platform across the DoD and USCG passed the halfway mark and was on track to finish deployment by the end of 2023.
The VA’s EHRM program, on the other hand, is facing more scrutiny. Its deployment of Cerner Millennium was halted until 2023 earlier this year after a significant technical defect at Mann-Grandstaff VA hospital. The hospital and its associated clinics across Washington and Idaho were forced to switch to paper records.
This crisis only highlighted alarms set off by the Office of the Inspector General (OIG) under the VA in 2021. The report highlighted that cost estimates were not sufficiently documented and even omitted some sources of cost.
Another report by OIG mentioned that there were serious deficiencies in training staff on the new software at the Mann-Grandstaff Hospital, months before the outage in March 2022. Surveys included in the report are staggering.
  • 62% disagreed that “relevant patient information is readily available within the new VA EHR
  • 53% disagreed that they were "able to share patient information within new VA EHR with other clinicians without difficulty”
  • 65% disagreed that they were “able to navigate different applications of the new EHR without difficulty”
  • 55% disagreed that “I am able to document patient care in the new VA EHR without difficulty”
Looking Forward
The drama around the Cerner rollout with the VA is not unheard-of. EHR tends to be a costly piece of software that requires a lot of training when implemented for the first time.
The VA picked Cerner for claims that Cerner itself would be best suited to be interoperable with the MHS Genesis software of the DoD and USCG. After all, it’s the same software vendor, and Cerner Millennium was supposed to take advantage of the power of the cloud to pull and share data across the DoD-USCG-VA ecosystem.
These efforts have proved to be significantly more expensive than previously estimated, and it may even be fair to say these issues may persist as Cerner seeks to complete the rollout across more VA locations across the country.
It highlights that the EHR market is in need of disruption with a player that can navigate the complexities of healthcare software and privacy requirements whilst also being a solution that works out of the box and that is easy for clinicians to operate.
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Aditya Singh

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