VA pauses $16B Oracle Cerner EHR deployments indefinitely to address error-ridden early rollout

The Department of Veterans Affairs is putting its big-ticket electronic health record overhaul with Oracle on an indefinite pause to address issues among five sites where the new system had been implemented, according to a Friday morning announcement.

The beleaguered effort involves a $16 billion contract with Oracle Cerner, which inherited the project last June when Oracle acquired Cerner for nearly $30 billion. Executives had vowed to get the rollout “back on track” amid lawmaker scrutiny that has persisted into 2023.

VA Secretary Denis McDonough had bumped back the EHR system’s rollout to additional sites multiple times throughout 2022 to address system outages and software errors that had caused numerous instances of patient harm. The VA was aiming to resume progress by June 2023.

Friday’s delay, however, doesn’t give an estimated date for when the deployment could continue.

“We’ve heard from Veterans and VA clinicians that the new [EHR] is not meeting expectations—and we’re holding Oracle Cerner and ourselves accountable to get this right,” McDonough said in the announcement. “This reset period will allow us to focus on fixing what’s wrong, listening to those we serve, and laying the foundation for a modern [EHR] that delivers for veterans and clinicians.”

The VA is working with Oracle Cerner to develop an amended contract that will increase the tech company’s “accountability to deliver a high-functioning, high-reliability, world-class EHR system,” the department said in the announcement. This will come with a new set of resource requirements for Congress to consider, which the VA estimated will run $400 million cheaper in FY 2023.

Mike Sicilia, executive vice president at Oracle Global Industries, said in an email statement that the company is happy to continue its work with the VA and likened the delay to working issues the Department of Defense had when it rolled out Cerner’s technology a few years back.

“We support the VA’s plan to improve the operation of the EHR at the current sites and take the necessary time to institute governance, change management and standardization changes to ensure the success of future VA deployments, similar to what DoD did a few years ago,” Sicilia said. “DoD’s modernization is now nearly complete, on time and on budget.  We will continue to closely coordinate with VA to provide enhancements and updates to the EHR.”

Friday’s news did not have a substantial impact on Oracle Cerner’s share price, though early word of the impending pause had already been circulated in an April 14 Wall Street Journal report.

The VA said it will not be scheduling additional deployments until the EHR system is “highly functioning” at the current five sites and can demonstrate its readiness for future sites.

“This readiness will be demonstrated by clear improvements in the clinician and Veteran experience; sustained high performance and high reliability of the system itself; improved levels of productivity at the sites where the EHR is in use; and more,” the department wrote. “When these criteria have been met and the reset period concludes, VA will release a new deployment schedule and re-start deployment activities.”

The one exception to the deployment pause is a VA-DoD integrated healthcare center in Chicago, where the departments will be targeting a deployment in March 2024 as previously planned.

Neil Evans, M.D., acting program executive director of the VA’s EHR Modernization Integration Office, said that the pause will better allow the government and Oracle Cerner to focus their efforts on amending the system’s issues.

“For the past few years, we’ve tried to fix this plane while flying it—and that hasn’t delivered the results that veterans or our staff deserve,” he said in the announcement. “This reset changes that. We are going to take the time necessary to get this right for veterans and VA clinicians alike, and that means focusing our resources solely on improving the EHR at the sites where it is currently in use and improving its fit for VA more broadly. In doing so, we will enhance the EHR for both current and future users, paving the way for successful future deployments.”