Cancelling iEHR: How the DoD and VA May Have Saved $2.7 Billion

Published: February 12, 2013

Cloud ComputingContract AwardsDEFENSEDISAElectronic Health RecordHealth CareHealth ITVA

The DoD and VA's recent announcement that their joint effort to create an integrated electronic health record (iEHR) would be cancelled unleashed a torrent of criticism from Congress and the media. This criticism may not be justified, however, as a series of pilots and proof of concept projects underway at the Pacific Joint Information Technology Center (JITC) could prove that a far cheaper, cloud-based alternative exists. This alternative approach may deliver joint EHR interoperability faster and at a total cost of $1.3 billion; $2.7 billion less than the $4 billion that achieving joint iEHR was originally estimated to cost.

The Department of Defense and Department of Veterans Affairs announced recently that they would be cancelling plans to create a new integrated electronic health record, or iEHR, for the medical care of veterans and military personnel. Instead, the departments will focus on employing existing technologies to make their current systems interoperable. This announcement drew a swift rebuke from Congress and criticism from the media and blogosphere concerning the estimated $1 billion that has been wasted laying the foundation for the now-defunct joint iEHR.
Somewhat lost in all of this was the fact that the DoD/VA also announced the timetable for delivering the efficiencies promised by iEHR would be sped up thanks to the new strategy. Many seem to have taken these assurances with a grain of salt, as if the DoD/VA were trying to soften the blow of the iEHR announcement by promising faster results that may or may not be achieved. For my part I am not sure that the promises made by Defense Secretary Leon Panetta and Veterans Affairs Secretary Eric Shinseki are idle. Rather, I suspect that in time the cancellation of iEHR will be seen as a courageous move reflecting the kind of leadership we expect from our national leaders.
Think I have lost my marbles? Give me a moment to make my case. I think the promises can be kept because I believe the contract infrastructure is already in place to make DoD/VA system interoperability a reality; and in a short time frame too. In June 2011, the Military Health Service (MHS) awarded task order # GSQ0911DF0046 to Smartronix via the Alliant large-business contract vehicle. This task order was intended to provide contractor services “for medical Information Management/Information Technology related research studies, proofs of concepts, prototyping and demonstrations of advanced technology to address specific medical information needs” at the Pacific Joint Information Technology Center (Pacific JITC). For those unfamiliar with it, Pacific JITC is the Hawaii-based MHS organization dedicated “to rapidly research, test and develop warfighter medical solutions and products, through pilots or prototypes that provide mission critical value and actionable information to the DoD … and the VA.” Among the solutions to be explored in the task order were defining an open standards-based approach for meeting current and future interoperability requirements and evaluating the applicability of a cloud interface to provide required health data and services.
Fast forward to May 2012 and the award of 7 Pacific JITC Proof of Concept contracts with a ceiling value of $300 million. This effort was put into place to enable a “paradigm shift” transitioning electronic Health Records (EHRs) to a cloud-based solution. Smartronix also won a spot on this IDIQ contract. The final DoD/VA solution adopted will deliver EHR capabilities through the cloud. Consider as further evidence that the joint DoD/VA announcement concerning iEHR specified that the Janus graphical user interface will be deployed at seven rehab sites in July. Janus is a web-based interface developed for none other than Pacific JITC.
If I am correct about all of this, it means that the DoD has dedicated up to $300 million to the initial cost of developing interoperable, cloud-based EHR. Given the work done so far, it is conceivable that the DoD will not need to spend all $300 million to get the interoperable EHR capabilities that it requires. Available spending data on the Pacific JITC Proof of Concept contracts has not been updated since September 2012, but at that time less than $12 million had been obligated. A few years ago estimates commonly put the cost of developing iEHR at $4 billion. So, even if it eventually cost all $300 million of the Pacific JITC Proof of Concept contract to achieve joint DoD/VA EHR interoperability, and even $1 billion has already been spent, the resulting $1.3 billion price tag would represent cost savings of $2.7 billion.
Achieving this level of savings would be an important accomplishment, which is why I believe that cancelling iEHR was a courageous move for which Mr. Panetta and Mr. Shinseki should be applauded, not criticized.
Before I close, a couple details require filling in. Foremost among these is whether or not a commercial cloud service provider be necessary to host the cloud-enabled EHR. My belief is no, at least not in the near-term. The Defense Information Systems Agency’s Defense Enterprise Computing Centers (DECCs) can host whatever solution comes out of the PACJITC effort. The VA already announced in January 2012 that DISA would host the joint EHR in its data centers and DoD has designated the Defense Manpower Data Center as the single "identity management" source for joint EHR. DISA may choose to include the future hosting of EHR as a cloud service once it puts a cloud strategy into place, but it remains to be seen if this will be the case.