Lawmakers call for updated VA Oracle EHR cost estimate

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The sign of the Veterans Affairs Department is hung on the podium during a news conference at the VA on September 8, 2014. · Healthcare Dive · Alex Wong via Getty Images

Emily Olsen

Wed, Feb 26, 2025, 2:57 AM 4 min read

The Department of Veterans Affairs needs to figure out an updated — and potentially much higher — cost estimate for the rollout of an Oracle electronic health record across its facilities, witnesses and lawmakers said at a House subcommittee hearing on Monday.
Cost projections for the embattled EHR deployment range from the VA’s 2019 estimate of about $16 billion to an independent evaluation of nearly $50 billion, testified Carol Harris, director for information technology and cybersecurity at the Government Accountability Office.
Though the nearly $50 billion price tag is likely more realistic, neither estimate reflects the many changes to the program over the past two years — including a period when new EHR deployments were largely put on hold, she added. “Cost of this is an unknown at this point,” said Rep. Tom Barrett, R-Mich. “We have to make this work, but we also have to be mindful, knowledgeable about the costs that that’s going to take.”

Dive Insight:

EHR vendor Cerner, which was later acquired by technology giant Oracle, first scored the contract to replace the VA’s aging medical record system in 2018. About two years later, the new EHR went live at the first VA facility, Mann-Grandstaff VA Medical Center in Spokane, Washington.

But the project has faced a score of shortfalls, including patient safety issues, technology challenges and system reliability concerns. Only six medical centers out of 170 are currently using the Oracle record — and the program has already cost about $12.7 billion, according to Harris’ written testimony from the House Committee on Veterans’ Affairs meeting on Monday.

Meanwhile, the VA’s 2019 cost projection of around $16 billion is “severely outdated and incomplete” and doesn’t include changes to the program over the past six years, according to Harris’ written testimony.

An independent cost assessment, issued by the nonprofit Institute for Defense Analyses in 2022, assumes $32.7 billion for a 13-year implementation phase and $17.1 billion for 15 years of continuing operations and maintenance.

But neither earlier estimate reflect the full impact of delays, system change and updated processes, according to Harris’ written testimony.

Neil Evans, acting program executive director of the Electronic Health Record Modernization Integration Office at the VA, said the agency is committed to building out a master schedule for new deployments as well as a cost estimate for the project.

First, the office will build a schedule to resume deployments at four facilities in Michigan in mid-2026, which will inform the build of a larger lineup, he said. The master schedule will serve as a foundation for the cost estimate.

Representatives from the VA and Oracle said the program is now at a turning point.

Seema Verma, executive vice president of Oracle Health and Life Sciences and CMS administrator during Donald Trump’s first administration, said the new Trump administration is committed to accelerating the rollout and that the company has completed “countless” system improvements.

“The totality of updates, enhancements, investments and innovations to the EHR show that this is a dramatically improved system from what was originally deployed in Spokane in 2020,” she said.

The VA is also exiting a long pause on new EHR deployments, after the agency largely halted the rollout in 2023 to focus on improvements at sites that were already using the Oracle record, except for a deployment at Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois.

However, even if the project continues in Michigan as scheduled, it’s “impossible” to deploy the record to the remaining approximately 160 VA facilities before the initial contract with Oracle ends in 2028, Harris said.

Additionally, job cuts at the VA, part of a larger cull of the federal government workforce, is also a concern for the EHR rollout, said Rep. Nikki Budzinski, D-Ill.

Eight probationary staffers at the EHRM office were let go, Evans said. Additionally, 16 staff members signed up for “deferred resignations,” which allows them to leave while receiving pay and benefits through September.

The office’s organizational chart is approved for about 330 workers, and it employs around 250 people, Evans said. However, he noted the EHR modernization project is a “priority” for the VA, and other workers — including other government employees and vendor staff — contribute to the program.

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