[Senate Hearing 111-894]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-894

                     VA'S IT PROGRAM: LOOKING AHEAD

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            OCTOBER 6, 2010

                               __________

       Printed for the use of the Committee on Veterans' Affairs





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         Available via the World Wide Web: http://www.fdsys.gov
                     COMMITTEE ON VETERANS' AFFAIRS

                   Daniel K. Akaka, Hawaii, Chairman
John D. Rockefeller IV, West         Richard Burr, North Carolina, 
    Virginia                             Ranking Member
Patty Murray, Washington             Lindsey O. Graham, South Carolina
Bernard Sanders, (I) Vermont         Johnny Isakson, Georgia
Sherrod Brown, Ohio                  Roger F. Wicker, Mississippi
Jim Webb, Virginia                   Mike Johanns, Nebraska
Jon Tester, Montana                  Scott P. Brown, Massachusetts
Mark Begich, Alaska
Roland W. Burris, Illinois
Arlen Specter, Pennsylvania
                    William E. Brew, Staff Director
                 Lupe Wissel, Republican Staff Director













                            C O N T E N T S

                              ----------                              

                       Wednesday, October 6, 2010
                                SENATORS

                                                                   Page
Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii........     1
Burr, Hon. Richard, Ranking Member, U.S. Senator from North 
  Carolina.......................................................     2
Johanns, Hon. Mike, U.S. Senator from Nebraska...................     3
Brown, Hon. Scott, U.S. Senator from Massachusetts...............     4

                               WITNESSES

Baker, Roger W., Assistant Secretary for Information and 
  Technology, U.S. Department of Veterans Affairs................     4
    Prepared statement...........................................     6
        Enclosure................................................    11
Meagher, Edward Francis, Chairman, VistA Modernization Committee 
  of the American Council for Technology Industry Advisory 
  Council and Vice President, Healthcare Strategy, North American 
  Public Sector, Computer Sciences Corporation...................    12
    Prepared statement...........................................    14
    ACT-IAC VistA Modernization Report...........................    16
Finn, Belinda J., Assistant Inspector General for Audits and 
  Evaluations, Office of Inspector General, U.S. Department of 
  Veterans Affairs...............................................   116
    Prepared statement...........................................   118
Tullman, Glen, Chief Executive Officer, Allscripts...............   121
    Prepared statement...........................................   123
Munnecke, Tom, Former Information Technology Official, U.S. 
  Department of Veterans Affairs.................................   125
    Prepared statement...........................................   127
        Appendix.................................................   130

 
                     VA'S IT PROGRAM: LOOKING AHEAD

                              ----------                              


                       WEDNESDAY, OCTOBER 6, 2010

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:33 a.m., in 
room 418, Russell Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.
    Present: Senators Akaka, Burr, Johanns, and Brown of 
Massachusetts.

     OPENING STATEMENT OF HON. DANIEL K. AKAKA, CHAIRMAN, 
                    U.S. SENATOR FROM HAWAII

    Chairman Akaka. This hearing of the United States Senate 
Committee on Veterans' Affairs will come to order.
    Today, the Committee examines VA's IT program with an eye 
toward the future. I thank the Ranking Member, Senator Burr, 
very much for his deep interest in this issue.
    Many important VA benefits depend on information 
technology, from the delivery of quality care to the processing 
of education and disability claims, and to any effort to ensure 
seamless transition from DOD to VA. While it is true that VA 
has been a leader in adopting electronic health records, VA's 
overall history with IT projects is far from perfect. VA has 
stumbled over the years on its path toward the goal of an 
electronic VA.
    More recently, we had a financial and logistics system fail 
known as CoreFLS. To make matters worse, the contractor was 
paid a bonus. Software systems processing G.I. Bill claims 
suffered many false starts. And last summer, VA halted 45 
projects that were dramatically over budget and overdue, 
including an outpatient scheduling system that was 3 years 
overdue.
    I do not wish to dwell in the past. We must, however, learn 
from these mistakes and take action to avert them in the 
future.
    The administration has made it a priority to improve the 
delivery of veterans' benefits through technology. With 
appropriate technologies VA will more efficiently serve 
veterans by reducing the time it takes to process benefits. 
Moving forward, VA must clearly articulate a vision for its IT 
program. VA's day-to-day management must reflect this vision, 
and the lines of communication that compel IT development must 
remain open between VA leadership and users.
    Every VA medical facility across the Nation must operate 
with a fully electronic medical record. The Lifetime Electronic 
Record also needs to become a reality. G.I. Bill processing 
software needs to be good enough to allow veterans, the 
schools, and VA to access and file claims in hours instead of 
weeks. And we must be in line to eventually replace the paper-
centric disability claims process with an electronic business 
solution.
    This hearing is one effort among many to carry out 
oversight of IT. Again, I welcome everyone to today's hearing. 
I look forward to the testimony from our panel and to 
continuing work with the many interested parties as we seek to 
ensure VA is on the right track.
    Let me call on our Ranking Member, Senator Burr, for his 
statement.

        STATEMENT OF HON. RICHARD BURR, RANKING MEMBER, 
                U.S. SENATOR FROM NORTH CAROLINA

    Senator Burr. Aloha, Mr. Chairman.
    Chairman Akaka. Aloha.
    Senator Burr. Welcome to our witnesses.
    Mr. Chairman, I thank you for your willingness to schedule 
this hearing even though the Senate is out of session. I want 
to thank my colleagues, Senator Johanns and Senator Brown, for 
being here.
    Mr. Chairman, seldom do we have a witness that you and I 
share from the standpoint of their State presence, but I would 
like to welcome Glen Tullman, the CEO of Allscripts. They have 
a presence in 15 States. I am proud to tell you two of those 
are Hawaii and North Carolina, so it is appropriate that we 
would have him here today and I want to thank him for taking 
time out of his busy schedule to discuss the company's 
experience with electronic health records and interoperability 
in the private sector.
    We are here to discuss an integral tool of VA's mission, 
the use of technology to deliver effective benefits and 
services to the American veterans. Within VA, the Office of 
Information and Technology is responsible for the management 
and oversight of VA's information technology assets. With a 
budget of over $3 billion and a mission so important to the 
successful delivery of services to veterans, Congressional 
oversight and involvement is critical.
    Today, we take a step toward strengthening the partnership 
between this Committee and the Office of Information and 
Technology in addressing the challenges confronting VA's 
effective management of its IT assets. We have seen a number of 
IT projects important to VA's mission fail and others 
discontinued over the last decade. These failures and 
discontinuations have cost taxpayers hundreds of millions of 
dollars. Despite continued warnings from the IG, GAO, and 
Members of Congress, problems delivering useful IT projects on 
time and on budget persist at VA. At times, these failures have 
left me wondering whether or not VA has the capability to 
deliver IT programs of significance on time, on budget, and 
within specifications.
    However, since Mr. Baker's appointment at VA 16 months ago, 
there seems to be a genuine effort to overhaul this portion of 
VA's operations. The installation of the Project Management 
Accountability System by the Assistant Secretary appears to be 
a strong first step in reigning in out of control and oversized 
contracts and projects. I look forward to hearing Mr. Baker's 
assessments about how PMAS has affected the culture at the VA.
    With today's modern technology, there are several IT 
capabilities that are expected from companies and health 
networks doing business across the country. These include the 
ability to process claims, schedule appointments, conduct real-
time accounting, and share information seamlessly with other 
partners. Unfortunately, these are all areas where VA continues 
to struggle, oftentimes producing not a single result that was 
desired at the outset of the program.
    One example of this is their proposed scheduling program 
that took 9 years, $127 million to produce nothing. VA still 
needs a new scheduling program in order to improve patient 
health care delivery at each VA facility.
    The cancellation of the proposed accounting system is also 
concerning. Although this decision should be applauded as a 
sign that the VA is moving away from bloated and oversized 
projects and contracts, let me state that the inability to 
identify expenditures in real time is hamstringing VA's 
capability to know how much their cost of conducting business 
really is.
    Interoperability with DOD is another area that continues to 
need improvement. As witnesses will testify, the capability to 
share information across systems is available, but to date, it 
appears that even though there has been nominal success by VA, 
we are far from where we need to be.
    I look forward to hearing specifically where VA currently 
stands with regard to having the appropriate technological 
capabilities to deliver veterans the time-sensitive services 
that they have earned, and more importantly, they deserve.
    Again, I thank you, Mr. Chairman. I thank our witnesses.
    Chairman Akaka. Thank you very much, Senator Burr.
    Now we will have the opening statement from Senator 
Johanns.

                STATEMENT OF HON. MIKE JOHANNS, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Johanns. Mr. Chairman and Ranking Member, thank you 
very much for putting this hearing together and welcome to the 
witnesses.
    As I was listening to the Chairman and Ranking Member 
speak, I thought back to my days as Secretary of Agriculture, 
and I have to tell you, IT systems were the bane of my 
existence. [Laughter.]
    So I start out telling you that because I think I 
understand what you are going through here.
    This is not a good history. There is just no way of getting 
around it. It is frustrating to me as it is to you, I am sure, 
that projects come in over budget; that after working on a 
project and spending enormous amounts of money, the project is 
abandoned.
    The other thing that is a little harder to quantify but is 
enormously real is the amount of staff time that is invested. 
Again, that is just very, very difficult to quantify, but those 
staff members who are committing their time to a project are 
not doing other things, and so they are constantly playing 
catch-up.
    So, I think this hearing is enormously important. I will 
say this, Secretary Baker, I do think you are trying to get on 
top of this and I think you are trying to move in the right 
direction. My hope for today's hearing is that we get an honest 
assessment from all the witnesses as to where we are at to 
date, and although it is never pleasant to talk about the 
problems that are out there that you know are going to end up 
on our desk and then your desk, I would like to hear some 
thoughts about where we are as we head toward the future here.
    So, Mr. Chairman and Ranking Member, thanks for pulling 
this hearing together. I look forward to the testimony.
    Chairman Akaka. Thank you very much, Senator Johanns.
    Now we will have the opening statement of Senator Brown of 
Massachusetts.

                STATEMENT OF HON. SCOTT BROWN, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Brown of Massachusetts. Thank you, Mr. Chairman. I 
concur with the opening statements of the Ranking Member, 
Senator Johanns, and yourself: I am here to learn and to see 
what tools and resources we can either provide or are needed to 
do your job better for the folks that need your help. So thank 
you.
    Chairman Akaka. Thank you very much, Senator Brown.
    I want to welcome the witnesses on today's panel. In the 
interest of opening a dialog amongst our witnesses, we have 
only one panel.
    First, we have the Honorable Roger Baker, Assistant 
Secretary for Information and Technology at the Department of 
Veterans Affairs.
    We have Belinda Finn, Assistant Inspector General for 
Audits and Evaluations, Office of Inspector General for the 
Department of Veterans Affairs. Ms. Finn is accompanied today 
by Mario Carbone, Director of the Dallas Office of Audits and 
Evaluations.
    We also have Ed Meagher, Vice President of Healthcare 
Strategy for the Computer Science Corporation.
    We have Tom Munnecke, a former VA IT official.
    Finally, we have Glen Tullman, Chief Executive Office of 
Allscripts.
    I thank you all for being here this morning. Your testimony 
will appear in the record.
    Mr. Baker, you are now recognized for 5 minutes.

     STATEMENT OF ROGER W. BAKER, ASSISTANT SECRETARY FOR 
INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Baker. Well, thank you, Chairman Akaka, Ranking Member 
Burr, Members of the Committee. It is indeed a pleasure to 
appear in front of you again to discuss the state of VA's 
Office of Information and Technology.
    Sixteen months ago the Members of this Committee confirmed 
me as President Obama's choice for Assistant Secretary for 
Information and Technology. At that time, you made it clear 
that you understood the significant challenges VA faces with 
information technology. I have appreciated your insights and 
your support over the last 16 months as we have worked to 
address those challenges.
    As my written testimony goes into much more detail, we have 
aggressively dealt with the largest issues facing IT at VA. 
First, Senator Burr, as you noted, we introduced the Program 
Management Accountability System, which has already had a 
dramatic impact in transforming the results of our development 
organization. Today, VA hits its system development milestones 
80 percent of the time, a rate that nearly every CIO, public or 
private sector, would envy. We achieved this transformation by 
forcing projects to deliver functionality in small increments 
and communicating a schedule adherence in the organization. 
During 2010, we generated over $200 million of cost avoidance 
in our development organization by stopping or reforming poorly 
performing projects, money we have asked to reprogram to other 
uses to benefit veterans.
    Second, in information security we have achieved our goal 
of having visibility to every desktop computer in the 
organization--as of yesterday, that is 310,722 of them--by 
September 30. What this means is that we can begin dealing with 
IT security holes in our infrastructure based on objective 
metrics and factual observations, not anecdotal incidents.
    Third, we are now publishing metrics from across our 
operations organization to measure our operational excellence. 
At an enterprise level, our metrics show that our key systems 
are highly available. For example, our VistA systems across the 
country average 99.95 percent availability. We also know that 
customer support is a local experience so we are focused on 
measuring and publishing metrics on customer experience and 
customer satisfaction at an individual facility level.
    Fourth, we once again have established for fiscal year 2011 
a prioritized operating plan that will guide our decisions 
about where to invest our resources during the year. The intent 
of this is to give us clear visibility from plan to budget to 
spend to results, on every one of those more than $3 billion in 
our appropriation.
    My written testimony also highlights several notable 
product delivery successes, deliveries that are tangible 
results of our disciplined approach to managing IT, including 
the new G.I. Bill Long Term Solution, Pharmacy Re-Engineering, 
and the Virtual Lifetime Electronic Record. These systems are 
already having an impact on the quality of care and the speed 
of benefits for our Nation's veterans.
    While I am proud of the accomplishments of the VA IT 
organization over the last 16 months, I recognize that much 
more work remains to be done. As the only department-level 
consolidated IT organization in the Federal Government, I 
believe that VA IT must strive to be a leader both inside and 
outside of government. The Office of Information and Technology 
has made substantial strides forward and is well on its way 
toward achieving this goal. Indeed, in a number of areas, VA 
has blazed a trail of innovation that the rest of the 
government is beginning to follow.
    Looking forward, we must use our new and disciplined 
management approaches to help us deliver improved IT systems 
that will have a direct impact on veterans, including the new 
Veterans Benefits Management System that will aid the Veterans 
Benefits Administration in achieving the Secretary's goal of 
``breaking the back of the backlog.'' We must deliver the 
Virtual Lifetime Electronic Records Initiative, ensuring that 
all providers of services to veterans have ready access to the 
information they need to provide quick and effective services.
    We must deliver on the IT projects essential to the other 
14 major initiatives, including ending veterans' homelessness 
and improving access to care, that will promote the 
transformation of VA as envisioned by Secretary Shinseki. And 
we must create an open source model for the VistA Electronic 
Health Record System, bringing back the innovation that made 
VistA the best Electronic Health Record System in the country.
    Mr. Chairman, while we have made significant improvements 
and had many successes over the last 16 months, as we look 
forward, I think it best to look back to the words of my 
confirmation testimony, and that is that there is no easy path, 
no simple answer, and no short-cut solution to creating a 
strong IT capability at VA. Achieving this will require hard 
work, disciplined management, and honest communications.
    Thank you, Mr. Chairman, Ranking Member Burr, and Members 
of this Committee for your continued support of veterans, their 
families and their survivors, of the VA, and specifically of 
our efforts to transform VA IT. I am prepared to answer any 
questions you might have at this point. Thank you.
    [The prepared statement of Mr. Baker follows:]
     Prepared Statement of Roger W. Baker, Assistant Secretary for 
    Information and Technology, U.S. Department of Veterans Affairs
    Thank you Chairman Akaka, Ranking Member Burr, and Members of the 
Committee. It is indeed a pleasure to appear in front of you again to 
discuss the state of VA's Office of Information and Technology. My 
testimony will address the current status of the Department's major 
Information and Technology (IT) transformation initiatives as well as 
our future plans.
    Sixteen months ago, the Members of this Committee confirmed me as 
President Obama's choice for Assistant Secretary of Information and 
Technology. During our pre-hearing discussions, you made it clear that 
you understood the significant challenges VA faced with information 
technology. I have appreciated your insights and support over the last 
16 months to bring VA's technology into the 21st century.
    Under this Administration, the Office of Information and Technology 
has made substantial strides forward, and is well on its way toward 
achieving the goal of being the best IT organization in the Federal 
Government, and comparable to many well-run private sector IT 
organizations. Indeed, in a number of areas VA has blazed a trail of 
innovation that the rest of government is beginning to follow. I would 
like to hit the high points of the last 16 months for you.
Customer Service:
    The most dramatic change at VA has been in the relationship between 
OI&T and the Administrations (Veterans Health, Veterans Benefits, and 
National Cemeteries). With the Under Secretaries, and with the 
continuous support of Secretary Shinseki, we have set a tone of 
cooperation that has made it possible for us to effectively address 
many difficult problems at the second largest agency in the Federal 
Government. As an example, the successful delivery of the new GI Bill 
long-term processing solution, discussed in detail later in my 
testimony, was clearly an intense cooperative venture between OI&T and 
the Veterans Benefits Administration (VBA). Whenever asked by the 
Secretary about an issue or a success regarding the GI Bill, our team's 
answer consistently starts with ``we.'' We built the system as a team, 
and we delivered the system as a team and that relationship is the 
single largest contributing factor to what is, for VA, a stunning 
victory and reversal of past practices--the successful installation of 
the GI Bill system on schedule in March of this year, and the complete 
conversion of all GI Bill processing to this system next August.
    Thanks to Robert Petzel, M.D., Under Secretary for Health, Mr. 
Michael Walcoff, Acting Under Secretary for Benefits, and Mr. Steve 
Muro, Acting Under Secretary for Memorial Affairs, that same 
cooperative approach has spread throughout VA and continues to thrive. 
Together, we are ensuring that our staffs ``get the message'' that only 
by working together can we solve problems and not point fingers.
Program Management Accountability System:
    In June of last year, after dealing with the failure of the 
Replacement Scheduling Application (RSA), this administration 
introduced the Program Management Accountability System, or PMAS. Soon 
after, we stopped 45 ongoing and failing IT projects and, after 
analysis, canceled 12 and re-formed the other 33 to meet the strict 
requirements of PMAS. Our actions on those 45 projects generated $54 
million in cost avoidance in 2010, allowing us to put those dollars to 
use on other critical investments to serve America's Veterans, their 
families and survivors. More importantly, we substantially decreased 
the risk of failure in the 33 projects that were re-planned and re-
formed.
    Under PMAS, all projects must deliver customer-facing functionality 
every 6 months (or less) without exception. This rapid delivery 
approach, with names such as Incremental or Agile development, is 
already used extensively throughout the private sector, where they 
cannot afford to waste millions on IT projects that never deliver. For 
VA, we combined rapid delivery with a management methodology that 
enforces strict adherence to project milestones.
    The level of culture change accomplished within the VA IT 
development area over the last year simply cannot be understated. In 
March of this year, it became VA policy that all systems development 
projects would be managed under PMAS. Over 2,500 development staff, 
employees and contractors, now focus on making committed schedule dates 
as paramount, and break down all projects into deliverables that can be 
accomplished in less than 6 months. The measurable results are 
dramatic.
    Last year, approximately 283 development projects at VA met their 
milestone dates an estimated 30 percent of the time. I say estimated 
because we have no real way of knowing, as IT development projects 
simply weren't tracked to their committed dates prior to PMAS. Today, 
VA has 97 active development projects, tracked in real-time through a 
project database and dashboard--they are meeting their milestone dates 
over 80 percent of the time. I know of no other Chief Information 
Officer (CIO), government or private sector, who has this level of 
insight into such a large portfolio of development projects. I can 
assure you, however, that most IT development organizations, public or 
private sector, would be ecstatic with meeting 80 percent of their 
committed milestones.
    In 2010, VA had a cost avoidance of nearly $200 million by 
eliminating poorly performing projects and restructuring many others to 
lower risk, reduce spend rates, and incremental development plans.
Information Security:
    As you are aware, the VA IT enterprise is massive, with 153 
hospitals, 853 community-based outpatient clinics (CBOC), 57 benefits 
processing offices, and 131 cemeteries and 33 soldier's lots and 
monument sites on a single, consolidated network. Our mission requires 
that we hold Personally Identifiable Information and Personal Health 
Information on approximately 26 million Veterans, and that we make that 
information available quickly to health care providers and benefits 
personnel who need it to provide the most effective services to 
Veterans. Our network supports over 400,000 users, and over 700,000 
devices.
    To vastly improve our information security posture, this spring we 
embarked on a project to provide visibility to every desktop on the 
network by the end of the fiscal year. I am pleased to report that we 
achieved that goal, thanks to a lot of hard work on the part of many 
OI&T employees. By the end of the calendar year, we will also have 
achieved full implementation of our medical device isolation 
architecture, which is essential to mitigating security vulnerabilities 
in our medical devices. Finally, we will achieve full visibility to 
every device on our network during fiscal year 2011, putting us on par 
with the best managed private sector organizations. Our ability to 
provide immediate response to vulnerabilities and threats within our 
enterprise, as well as enacting a proactive approach to centralized 
monitoring, reporting, compliance validation and providing maximum 
service availability, is quickly establishing VA as a model of 
excellence for the rest of the Federal Government.
Operational Excellence:
    I am proud to tell you that our operations organization provides 
excellent service to our hospitals, benefits offices, and cemeteries. I 
can tell you this because, starting in my first month at VA, we began 
to measure and publish key metrics that tell us how we are doing. We 
started at the core, measuring network availability (which averages 
99.99 percent), Veterans Health Information Systems and Technology 
Architecture (VistA) system availability (99.95 percent), and help desk 
wait times. We have expanded these measurements to include a list of 
nearly 167 metrics covering aspects of our network, our service 
provision and our system/application provisioning that help us 
understand what works well and what does not.
    Along our customer service theme, we are now focusing on providing 
metrics on how well we are doing at each individual VA facility. We 
will soon begin reporting key IT support metrics at each VA facility, 
allowing national operations staff to work more easily and more quickly 
with the facility CIO and the facility director to identify and address 
issues that cause poor support. We also recently introduced a program 
to allow continuous monitoring of customer satisfaction at each 
facility, measured in a way that lets us compare customer satisfaction 
for our services versus those of similar private sector organizations. 
We intend to continue to augment the reporting of metrics and automate 
the collection of vital information thru the implementation of 
Enterprise Management Framework (EMF). The ability to measure these key 
processes and adjust accordingly is central to continuous operational 
improvement--a hallmark of a mature operation. Customer satisfaction is 
a local issue. In an enterprise the size of VA, it is not enough to 
focus on the averages. We must work to identify and address issues that 
affect local customer support and satisfaction, and to play our part in 
ensuring that each Veteran receives the best services possible.
Financial Management:
    Finally, we created a detailed financial plan for OI&T in both 2010 
and 2011, known as the Prioritized Operating Plan. This plan has two 
main purposes. First, it creates a vehicle for us to agree, with our 
customers, on what the high priority IT services and projects are, and 
allocate our resources to ensure success on the most important items. 
It also allows us to communicate, clearly and objectively, which 
projects and services will not be accomplished. Second, it allows us to 
track our expenditures, from plan to budget to spend to results, and 
know the business purpose for spending each dollar and then track the 
results we expect to obtain from the expenditure.
                      project delivery highlights
    I would like to take a moment to talk about three projects that 
have been notable successes for VA IT over the last year.
New GI Bill Long Term Solution (LTS):
    As I mentioned earlier, I'm pleased to report that VA has made 
tremendous strides in delivering Post-9/11 GI Bill benefits in a timely 
and accurate manner. We've also made significant progress in the 
development and deployment of our new processing and payment system. As 
a result of these significant strides, VBA recently reported that at 
the end of August last year, VA had processed payments for only 8,185 
students for the fall 2009 semester. For the current fall term, VA has 
already processed payments for more than 135,000 students. The average 
time to process an enrollment certification in August 2010, was 10 
days, down from 28 days one year ago.
    We delivered and deployed Release 1.0 of the long-term solution 
(LTS) on schedule on March 31, 2010. In June and August 2010, we 
successfully deployed Releases 2.0 and 2.1 of the LTS. Release 2.0 
allowed the complete processing of all new claims under the LTS, while 
Release 2.1 allowed the conversion of all previously processed records 
from the ``Interim Solution'' to the LTS. Through these deployments, we 
successfully converted over 500,000 Chapter 33 claimant records from 
our interim processing system into the LTS and are paying over 600,000 
claimants from the LTS. We also added greater functionality to that 
originally planned for the LTS, adding functionality to include: 
enabling payment of retroactive housing allowance adjustments to those 
individuals eligible for the increased rates in 2010; automatically 
generating letters to individuals to provide them better information on 
their benefits; and facilitating claims processing for the Fry 
Scholarship recipients. VA is now processing all Post-9/11 GI Bill 
claims in this new system, thereby replacing the interim processing 
system and its associated manual job aides.
    Most importantly, the new system was installed, and record 
conversion accomplished, with no significant errors. This meant that we 
were able to achieve our primary goal, which was to have the LTS 
installed in time to process fall semester claims without introducing 
processing errors or delays that might affect claims processing. The 
success of this roll-out is well above the industry norm.
    While delivery of the LTS has been accomplished, functionality to 
automate interfaces to other systems has been delayed. The interfaces 
with the VA-ONCE system for certification of enrollment, and the 
benefits delivery payment system, previously scheduled for 
September 30, 2010, are now scheduled for October 30, 2010, and 
December 31, 2010, respectively. These delays are due primarily to the 
level of effort required to ensure that data conversion and basic 
allowance for housing (BAH) retroactive payment calculations were 
accomplished without introducing processing errors that would require 
manual correction and thus impact fall benefit processing.
Pharmacy Re-Engineering:
    Pharmacy Re-Engineering (PRE) was one of the original 45 projects 
stopped in June 2009 under PMAS. At that time, PRE was a classic case 
of a VA IT project that had been unable to deliver functionality to 
customers over a period of many years. At the time it was stopped, PRE 
had just announced another one year slip in its delivery schedule, and 
management was not confident that no further slips would be 
encountered.
    In October 2009, we re-formed and re-started the project under an 
incremental delivery project plan, with six increments originally 
defined. I am pleased to report that Pharmacy Re-Engineering is now in 
production in our Charleston, SC facility, and will soon move into beta 
test at additional facilities.
    PRE Increment 1 (Foundational Enhancements) reached Initial 
Operating Capability (IOC) on October 23, 2009, a full 39 days ahead of 
schedule. This release provides tools to allow sites to begin setup 
required for Increments 3-4 and minor enhancements to the existing 
pharmacy system.
    PRE Increment 2 (Pharmacy Enterprise Customization System) reached 
IOC as scheduled on March 5, 2010. This release provides tools to allow 
customization of commercial software system data used for medication 
order checking to better meet VA business practices.
    PRE Increment 3 (Medication Order Check Healthcare Application--Non 
Dosing) reached IOC on June 29, 2010. This release was delivered 28 
days beyond its planned due date because of delays in dependent 
projects and issues related to testing required before going live in a 
hospital environment. Enhanced order checks included in this release 
address a number of critical patient safety issues in legacy pharmacy 
applications.
    PRE Increment 4 (Medication Order Check Healthcare Application--
Dosing) reached IOC as scheduled on August 30, 2010. New maximum daily 
dose, daily dose range, and dosing guidelines provide clinicians with 
tools to reduce potential over- or under-dosing of prescribed 
medications.
    When fully deployed, PRE increments 1-4 are expected to reduce 
accidental dosing errors (ADEs) by approximately 10 percent and will be 
used by approximately 10,000 pharmacy employees in the processing of 
108 million outpatient prescriptions and 15 million inpatient orders 
annually. All of this will enhance the continued success of our Malcom 
Baldridge Award-winning VA Pharmacy system.
                                  vler
    In April 2009, President Obama charged the Secretaries of Defense 
and Veterans Affairs with creating a Virtual Lifetime Electronic Record 
(VLER) to improve our ability to provide services to our Nation's 
Servicemembers, Veterans, their families and their beneficiaries. We 
have made substantial progress. Most visibly, we are now ``live'' in 
two pilots of the Nationwide Health Information Network in San Diego, 
CA and Hampton Roads in Norfolk, VA. This Nationwide Network is 
critical to VLER in that it will provide access to private sector 
records that are a large part of the lifetime of care received by 
Servicemembers and Veterans.
    We have also implemented a consolidated eBenefits portal where 
Servicemembers and Veterans can access information on the benefits they 
are receiving or may be due. The eBenefits portal will eventually be 
the single point of entry for all benefits information. Perhaps most 
importantly, the eBenefits portal effectively bridges the conversion 
from active duty to Veteran status by allowing Servicemembers to retain 
the same login information they had as an active duty participant. This 
simple change is critical to the VLER concept.
    Also critical to the VLER concept is the adoption by VA this summer 
of the Department of Defense's (DOD) Electronic Data Interchange--
Personal Identifier, or EDI-PI, as the common identifier to be included 
in all VA records. This ensures that, once authenticated, both VA's and 
DOD's systems will have a shared, common way of identifying all records 
about a single individual. Thanks to outstanding DOD cooperation, we 
have also agreed that DOD will provide an EDI-PI for all individuals 
seen by VA, even if they were not known to DOD when the Veteran served.
Looking Forward:
    While I am proud of the accomplishments of the VA IT organization 
over the last 16 months, I also recognize that much, much more work 
remains to be done. As the only Department-level consolidated IT 
organization, I believe that VA IT must strive to be a leader both 
inside and outside of government. To that end, I would tell you what my 
goals are for us in the coming years:

    1. Deliver effectively and efficiently the new Veterans Benefits 
Management System, aiding Veterans Benefits Administration in achieving 
the Secretary's goal of ``breaking the back of the backlog.''
    2. Achieve the Virtual Lifetime Electronic Records initiative.
    3. Deliver the IT projects essential to the other 14 major 
initiatives that will promote the transformation of VA as envisioned by 
Secretary Shinseki.
    4. Create an Open Source model for the VistA electronic health 
record system, bringing back the innovation that made VistA the best 
electronic health record system in the country.
    5. Solidify and refine PMAS to ensure that VA IT development 
projects continue to meet aggressive yet realistic customer delivery 
milestones.
    6. Leverage the ``visibility to the desktop'' initiative to ensure 
compliance with critical information security policies throughout the 
enterprise.
    7. Continue to ensure VA IT transparency by publicly publishing 
PMAS data, operational metrics, privacy breaches, and other management 
information of interest to the public.
    8. Increase internal customer satisfaction with VA IT services by 
focusing on local support metrics and satisfaction.
    9. Maintain the prioritized operating plan as the primary vehicle 
for communicating with our internal customers on budget decisions.
    10. Continue to implement IT infrastructure improvements that 
increase our service levels and decrease cost.
                               conclusion
    Mr. Chairman, while we have made many significant improvements and 
had many successes over the last 16 months, we have only just begun 
down the path that we must follow to achieve our ultimate goal of a 
21st Century VA. I think it best to reiterate the words from my 
confirmation testimony that are still quite true today: ``There is no 
easy path, no simple answer, and no short-cut solution to creating a 
strong IT capability at VA. Achieving this will require hard work, 
disciplined management, and honest communications.'' Thank you Mr. 
Chairman, Ranking Member Burr, and Members of this Committee for your 
continued support: of Veterans, their families and survivors; of VA; 
and of our efforts to transform VA IT. I am prepared to answer any 
questions at this time.
                               Enclosure




    Chairman Akaka. Thank you very much, Mr. Baker.
    Now, we will accept the testimony of Mr. Meagher.

     STATEMENT OF EDWARD FRANCIS MEAGHER, CHAIRMAN, VISTA 
MODERNIZATION COMMITTEE OF THE AMERICAN COUNCIL FOR TECHNOLOGY 
   INDUSTRY ADVISORY COUNCIL AND VICE PRESIDENT, HEALTHCARE 
   STRATEGY, NORTH AMERICAN PUBLIC SECTOR, COMPUTER SCIENCES 
                          CORPORATION

    Mr. Meagher. Aloha, Chairman Akaka, Ranking Member Burr, 
and Members of the Committee. I am honored to be here and I 
thank you for the opportunity to appear before you today to 
discuss the findings of the Industry Advisory Council's report, 
``VistA Modernization Report: Legacy to Leadership,'' and as 
you requested, to provide my views on current successes and 
failures in VA IT and recommendations for success in the 
future.
    While discussing the VistA Modernization Report, I will be 
representing the Industry Advisory Council. However, while 
discussing any other issue, I will be representing myself only.
    ACT-IAC is a unique nonprofit public-private partnership 
dedicated to advancing the business of government through the 
application of technology. The agenda is government-driven. 
ACT-IAC provides an ethical forum for collaboration where 
government and industry can create solutions for the most 
pressing government IT issues and challenges. That forum is 
objective and vendor and technology neutral. ACT-IAC also 
provides education and training to build essential knowledge 
and skills for government and industry professionals who want 
to serve the IT community. The greatest value of ACT-IAC is in 
its ability to deliver strategic insight and actionable 
solutions to advance government's ability to serve citizens and 
the Nation. Participation in the organization is open to any 
member of the government IT community who shares our commitment 
to advancing the business of government.
    In September 2009, VA's Assistant Secretary Roger Baker 
asked IAC to assess the issues, challenges, and opportunities 
associated with modernizing the current legacy VistA system and 
make recommendations to address these issues and challenges to 
take advantage of the opportunities that are presented. At no 
expense to the government, IAC formed a committee of senior 
executives representing 42 of its over 500 member companies, 
and I was asked to chair this committee.
    We began a process of first educating ourselves about the 
issues involved in modernizing a large, mission-critical legacy 
system and then specifically looking at the current state of 
VA's legacy VistA system. We looked at 24 alternative 
approaches to modernizing, and after narrowing those to six 
approaches, we examined those six in greater detail. In 
addition to the alternative subcommittee, we created 
subcommittees to explore and analyze options concerning 
architecture, implementation models, deployment models, 
governance, opportunities and impact, terms and definitions, 
and finally, reports and presentations. We estimate that over 
7,000 man hours over a 6-month period went into the preparation 
and development of this report.
    The committee operated on a consensus-based model, and we 
are all very proud of the fact that the final report was 
unanimously endorsed by all members of the committee. Our 
recommendations can be summarized as two high-level strategic 
recommendations and seven specific actionable recommendations 
that describe programmatic next steps to implement our 
strategic recommendations. We believe we successfully 
negotiated the middle path such that our recommendations are 
not overly prescriptive nor are they just simply well intended 
generalizations. We believe we have recommended a sound, 
realistic approach that, while challenging, has a high 
probability of success and the potential to reaffirm VA's 
position as the preeminent leader in health information systems 
and electronic health records.
    The two high-level strategic recommendations are: one, that 
VA commit to and announce a plan to move to an open source, 
open standards model for the reengineering of the next 
generation of VistA. This action should be a strategic policy 
for the VA. The working group recommended, second, that current 
VistA applications be placed on an aggressive program of 
stabilization with limited tactical upgrades and enhancements, 
driven only by patient safety and other mandated requirements.
    If implemented, these recommendations will put the VA on a 
clear path to a future state where the next generation of VistA 
will be developed and deployed in a comprehensive state-of-the-
art ecosystem that is more easily, robustly, and cost-
effectively maintained; that allows for growth and change that 
encourages innovation; that promotes collaboration and 
interoperability; and most importantly, facilitates the 
delivery of the most advanced health care possible to the most 
deserving of populations, our Nation's veterans.
    The working group then made four specific recommendations. 
So, based on their reputation for objectivity and sound 
judgment, the VA reached out to the federally Funded Research 
and Development Center community to rapidly tap into their 
skills and knowledge base resources to rapidly design and build 
a working model of the core ecosystem and to identify and 
validate the best model for the governance and business 
operation of this open source organization. Finally, FFRDC 
should be used to provide the functional decomposition of the 
current VistA application suite to deliver state-of-the-art 
functional specifications.
    Finally, we made three additional recommendations as to how 
the VA should acquire the functionality in the new ecosystem 
and manage the transition between legacy VistA and the new open 
source-based VistA 2.0. I would ask that the Committee include 
the entire ACT-IAC VistA Modernization Report as part of my 
testimony.
    [The report follows Mr. Meagher's prepared statement.]
    Mr. Meagher. Now, speaking for myself exclusively as a 
former VA Acting Assistant Secretary, Acting CIO, Deputy 
Assistant Secretary, and also former Chief Technology Officer 
over a 6-year period, I would offer this personal assessment of 
the current VA IT environment. The centralization of all IT 
functions, funding, and personnel under the leadership of the 
CIO was and remains critical for the long-term success of IT at 
the VA. While a transition from decentralized to centralized 
management may have not gone smoothly, I believe that most of 
the issues have been addressed by Mr. Baker and his team. He 
has instituted a customer service orientation that puts the 
needs and requirements of the veteran and the VA employee 
serving the veteran first and foremost. It is important to 
continue support for this centralized model.
    Next, while there are literally dozens of high-priority IT 
requirements that need to be addressed, I believe it is 
critical that two of them be assigned the highest priority and 
that critical resources, funding, and focus be applied to them 
first and continuously. They are the modernization of VistA and 
the movement of the benefit claim processing to an all-digital 
fully computable system with the expeditious phasing out of 
paper-based records and a minimalization of the use of imaging 
of paper to only those situations where a digital computer 
representation is not possible. The successful prosecution of 
these two programs----
    Chairman Akaka. Mr. Meagher----
    Mr. Meagher [continuing]. Will yield the greatest 
improvements.
    Chairman Akaka. Please summarize your statement.
    Mr. Meagher. Yes, sir. I would like to ask that the rest of 
my comments be submitted for the record. Thank you, sir.
    [The prepared statement of Mr. Meagher follows:]
     Prepared Statement of Edward Francis Meagher, Chairman, VistA 
    Modernization, Committee of the American Council for Technology 
 Industry Advisory Council and Vice President, Healthcare Strategy CSC
    Aloha Chairman Akaka, Ranking Member Burr, and Members of the 
Committee: I am honored to be here and I thank you for the opportunity 
to appear before you today to discuss the findings of the Industry 
Advisory Council's report, ``VistA Modernization Report; Legacy to 
Leadership'' and as you requested to provide my views on current 
successes and failures in VA-IT and recommendations for success in the 
future. While discussing the VistA Modernization Report I will be 
representing the Industry Advisory Council. However, while discussing 
any other issue I will be representing myself only. ACT-IAC is a unique 
non-profit, public-private partnership dedicated to advancing the 
business of government through the application of technology. The 
agenda is government driven. ACT-IAC provides an ethical forum for 
collaboration where government and industry can create solutions to the 
most pressing government IT issues and challenges. That forum is 
objective and vendor and technology neutral. ACT-IAC also provides 
education and training to build essential knowledge and skills for 
government and industry professionals who want to serve the IT 
community. The greatest value of ACT-IAC is in its ability to deliver 
strategic insight and actionable solutions to advance government's 
ability to serve citizens and the Nation. Participation in the 
organization is open to any member of the government IT community--
government or private sector--who shares our commitment to advancing 
the business of government.
    In September 2009, VA's Assistant Secretary for Information and 
Technology, Roger Baker asked IAC, ``to assess the issues, challenges, 
and opportunities associated with modernizing the current legacy VistA 
system and make recommendations to address these issues and challenges 
and take advantage of the opportunities presented. IAC formed a 
committee of senior executives representing 42 of its over 500 member 
companies and I was asked to chair this Committee. We began a process 
of first educating ourselves about the issues involved in modernizing a 
large, mission critical legacy system and then specifically looking at 
the current state of VA's legacy VistA system. We looked at 24 
alternative approaches to modernization and after narrowing those to 6 
approaches we examined those 6 in greater detail. In addition to the 
alternatives subcommittee we created subcommittees to explore and 
analyze options concerning architecture, implementation models and 
extensions, deployment models, governance, opportunities and impacts, 
terms and definitions and finally reports and presentations. We 
estimate that over 7000 man hours over a six month period went into the 
preparation and development of this report. The Committee operated on a 
consensus based model and we are all very proud of the fact that the 
final report was unanimously endorsed by all Members of the Committee. 
Our recommendations can be summarized as two high level strategic 
recommendations and seven specific, actionable recommendations that 
describe programmatic next steps to implement our strategic 
recommendations. We believe we successfully negotiated a middle path 
such that our recommendations are not overly prescriptive nor are they 
well intended generalizations. We believe we have recommended a sound, 
realistic approach that while challenging has a high probability of 
success and the potential to reaffirm the VA's position as the 
preeminent leader in health information systems and electronic health 
records.
    The two high level strategic recommendations are:

    1. The working group recommends that the VA commit to and announce 
a plan to move to an open source, open standards model for the 
reengineering of the next generation of VistA (VistA 2.0). This action 
should be a strategic policy for the VA.
    2. The working group recommends that the current VistA application 
be placed on an aggressive program of stabilization, with limited 
tactical upgrades and enhancements driven only by patient safety and 
other mandated requirements

    If implemented these recommendations would put the VA on a clear 
path to a future state where the next generation of VistA would be 
developed and deployed in a comprehensive, state-of-the-art ecosystem 
that is more easily, robustly, and cost effectively maintained; that 
allows for growth and change; that encourages innovation; that promotes 
collaboration and interoperability; and most importantly facilitates 
the delivery of the most advanced healthcare possible to the most 
deserving of populations, our nations veterans.
    The working group then made four specific recommendations that the 
VA reach out to federally Funded Research and Development Centers 
(FFRDC) to tap into their skills and knowledge based resources to 
rapidly design and build a working model of the core ecosystem and to 
identify and validate the best model for the governance and business 
operation of the Open Source organization that will operate this 
ecosystem. Finally an FFRDC should be used to provide the functional 
decomposition of the current VistA Application Suite to deliver state-
of-the-art:

     functional and design specifications of current 
application functionality
     functional and design specifications for required 
application functionality
     functional and design specifications for additional 
application functionality

    Finally, we made three additional recommendations as to how the VA 
should acquire the functionality in the new ecosystem and manage the 
transition between legacy VistA and the new, Open source based VistA 
2.0. I would ask that the Committee include the entire ACT-IAC Vista 
Modernization Report as part of my testimony.
    Speaking for myself, as a former VA Acting Assistant Secretary and 
Acting CIO and Deputy Assistant Secretary and Deputy CIO as well as the 
VA's former Chief Technology Officer over a six year period I would 
offer this personal assessment of the current VA-IT environment. The 
centralization of all IT functions, funding, and personnel under the 
leadership of the CIO was and remains critical to the long term success 
of IT at the VA. And while the transition from decentralized to 
centralized management may not have been handled in the wisest, most 
thoughtful manner in the past I believe most of the oversights and the 
heavy handed approaches to operating within a centralized management 
model have been addressed by Assistant Secretary Baker and his team. He 
has instituted a customer service orientation that puts the needs and 
requirements of the veteran and the VA employee serving the veteran 
first and foremost. It is important to continue to support this 
centralized model. Next, while there are literally dozens of high 
priority IT requirements that need to be addressed I believe it is 
critical that two of them be assigned the highest priority and critical 
resources, funding, and focus be applied to them first and 
continuously. They are the modernization of VistA and the movement of 
all benefit claims processing to an all digital, fully computable 
system with the expeditious phasing out of paper based records and the 
minimalization of the use of the imaging of paper to only those 
situations where a digital, computable representation is not possible. 
The successful prosecution of these two programs will yield the 
greatest improvements to VA healthcare and benefits delivery that will 
allow the VA to deliver on Secretary Shinseki's promise to transform 
the VA into a 21st century organization. Finally, I believe there must 
be a practical, over arching vision established that describes how all 
of this comes together and the long discussed but not yet realized goal 
of ``One VA'' becomes a reality. This will require the setting aside of 
traditional boundaries between VA healthcare and benefits delivery, 
between VA and DOD, and ultimately between VA and all of the other 
public and private sector entities that provide or could provide our 
veterans with the best care possible. The modernization of VistA along 
the lines our report recommends and the commitment to finally build and 
operate an all digital, all computable benefits administration system 
are critical, essential steps to achieving what we all want, a veteran 
centric VA capable of delivering on our nations sacred commitment to 
``care for him who shall have borne the battle and for his widow and 
his orphan.''





    Chairman Akaka. Thank you. It will be placed in the record.
    Now we will receive the testimony of Ms. Finn.

 STATEMENT OF BELINDA J. FINN, ASSISTANT INSPECTOR GENERAL FOR 
   AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. 
                 DEPARTMENT OF VETERANS AFFAIRS

    Ms. Finn. Thank you, Mr. Chairman and Members of the 
Committee. Thank you for the opportunity to discuss VA's 
management of its information technology projects. Mr. Mario 
Carbone, who is with me today, is responsible for several of 
the audit reports I will be discussing.
    The OIG has reported on the Department's management of its 
IT projects over recent years. My testimony today will 
summarize our work, highlight our insights regarding the IT 
governance structure, and discuss some key themes that we see 
reoccurring.
    As part of our audit of VA's management of information 
technology capital investments, we examined VA's realignment of 
its IT program from a decentralized to a centralized management 
structure. We reported that the ad hoc manner in which the 
Office of Information and Technology, or OI&T, had managed the 
realignment had resulted in an environment with inconsistent 
management controls and inadequate oversight.
    In September 2009, we reported that VA needed to manage its 
major IT development projects in a more disciplined and 
consistent manner. In general, we found that VA's processes 
were adequate. However, OI&T had not always communicated, 
complied with, or enforced its software development 
requirements. Once again, we attributed these management lapses 
to the centralization in an ad hoc manner.
    Over the past 2 years, our audit work on several IT system 
development projects has identified problems with inadequate 
project and contract management, staffing shortages, and a lack 
of guidance. These recurring themes have repeatedly hindered 
OI&T's efforts to develop their systems.
    For example, we have issued three reports on the Financial 
and Logistics Integrated Technology Enterprise. This is 
commonly known as FLITE. Our review of these programs concluded 
that program managers were repeating problems from the failed 
CoreFLS project. Specifically, the FLITE program managers did 
not always take well-timed actions to ensure the achievement of 
cost, schedule, and performance goals have sufficient staff in 
critical areas or clearly define staff roles and 
responsibilities; clearly define VA's training requirements for 
the pilot project; effectively identify and manage all risk 
associated with the Strategic Asset Management pilot project. 
This was a key component of the FLITE system.
    We recommended that VA establish stronger program 
management controls to improve the deployment of the SAM pilot, 
beta, and national projects. Specifically, we recommended that 
the program establish controls to facilitate achieving cost, 
schedule, and performance goals, as well as mitigating program 
risk.
    Finally, our audit of the Post-9/11 G.I. Bill Long Term 
Solution reported that OI&T had developed and deployed both LTS 
releases one and two on time. However, these releases did not 
always meet the functionality that was expected for those 
releases. We concluded that the program still needed more 
management discipline and processes to ensure the project meets 
both the performance and the cost goals required.
    In conclusion, the Department historically has struggled to 
manage IT development projects to successfully deliver desired 
results within the cost and schedule constraints.
    Mr. Chairman, thank you for the opportunity to be here 
today. We would be pleased to answer any questions that you or 
the other Members of the Committee may have.
    [The prepared statement of Ms. Finn follows:]
Prepared Statement of Belinda J. Finn, Assistant Inspector General for 
Audits and Evaluations, Office of Inspector General, U.S. Department of 
                            Veterans Affairs
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to discuss the Office of Inspector General's (OIG) findings 
regarding VA's management of its information technology (IT) projects. 
I am accompanied today by Mr. Mario Carbone, Director, Dallas Office of 
Audits and Evaluations, Office of Inspector General.
                               background
    The use of IT is critical to VA providing a range of benefits and 
services to veterans, from medical care to compensation and pensions. 
If managed effectively, IT capital investments can significantly 
enhance operations to support the delivery of VA benefits and services.
    However, when VA does not properly plan and manage its IT 
investments, they can become costly, risky, and counterproductive. As 
we have reported, IT management at VA is a longstanding high-risk area. 
Historically, VA has experienced significant challenges in managing its 
IT investments, including cost overruns, schedule slippages, 
performance problems, and in some cases, complete project failures. 
Some of VA's most costly failures have involved management of major IT 
system development projects awarded to contractor organizations.
    My statement today focuses on the results of our audits of the 
Department's management of its IT projects over recent years. In 
summarizing this work, I will highlight initial insights regarding VA's 
IT governance structure and process and discuss some key themes that 
reoccur in VA's IT system developments.
                        it governance challenges
    In 2009, we provided an overarching view of VA's structure and 
process for IT investment management [Audit of VA's Management of 
Information Technology Capital Investments (Report No. 08-02679-134, 
May 29, 2009)]. As part of the audit, we examined VA's realignment of 
its IT program from a decentralized to a centralized management 
structure. The realignment was to provide greater accountability and 
control over VA resources by centralizing IT operations under the 
management of the Chief Information Officer (CIO) and standardizing 
operations using new processes based on industry best practices--goals 
that have only partially been fulfilled.
    We reported that the ad hoc manner in which the Office of 
Information and Technology (OI&T) managed the realignment inadvertently 
resulted in an environment with inconsistent management controls and 
inadequate oversight. Although we conducted this audit more than two 
years after VA centralized its IT program, senior OI&T officials were 
still working to develop policies and procedures needed to effectively 
manage IT investments in a centralized environment. For example, OI&T 
had not clearly defined the roles of IT governance boards responsible 
for facilitating budget oversight and IT project management. OI&T also 
had not established the governance board criteria needed to select, 
review, and assess IT projects. OI&T does not expect to complete key 
elements of these new critical processes until FY 2011.
    Further, in September 2009, we reported that VA needed to better 
manage its major IT development projects, valued at that time at over 
$3.4 billion, in a more disciplined and consistent manner [Audit of 
VA's System Development Life Cycle Process (Report No. 09-01239-232, 
September 30, 2009)]. In general, we found that VA's System Development 
Life Cycle (SDLC) processes were adequate and comparable to Federal 
standards. However, OI&T did not communicate, comply with, or enforce 
its mandatory software development requirements. OI&T did not ensure 
that required independent milestone reviews of VA's IT projects were 
conducted to identify and address system development and implementation 
issues. Once again, we attributed these management lapses to OI&T 
centralizing IT operations in an ad hoc manner, leaving little 
assurance that VA was making appropriate investment decisions and best 
use of available resources. Moreover, VA increased the risk that its IT 
projects would not meet cost, schedule, and performance goals, 
adversely affecting VA's ability to timely and adequately provide 
veterans health services and benefits.
    These audits demonstrated that OI&T needed to implement effective 
centralized management controls over VA's IT investments. Specifically, 
we recommended that OI&T develop and issue a directive that 
communicated the mandatory requirements of VA's SDLC process across the 
Department. We also recommended that OI&T implement controls to conduct 
continuous monitoring and enforce disciplined performance and quality 
reviews of the major programs and projects in VA's IT investment 
portfolio. Although OI&T concurred with our recommendations and 
provided acceptable plans of actions, OI&T's implementation of the 
corrective actions is not yet complete.
             project management shortfalls in recent years
    Over the past two years, our audit work on several IT system 
development projects has identified themes as to why VA has continued 
to fall short in its IT project management. These issues include 
inadequate project and contract management, staffing shortages, lack of 
guidance, and poor risk management--issues that have repeatedly 
hindered the success of IT major development projects undertaken by 
OI&T.
VA's Replacement Scheduling Application (RSA)
    In August 2009, we reported that the RSA project failed because of 
ineffective planning and oversight [Review of the Award and 
Administration of Task Orders Issued by the Department of Veterans 
Affairs for the Replacement Scheduling Application Development Program 
(Report No. 09-01926-207, August 26, 2009)]. RSA was a multi-year 
project to replace the system the Veterans Health Administration used 
to schedule medical appointments for VA patients. Lacking defined 
requirements, an IT architecture, and a properly executed acquisition 
plan, RSA was at significant risk of failure from the start. We 
suggested that VA needed experienced personnel to plan and manage the 
development and implementation of complex IT projects effectively. We 
also suggested that a system to monitor and identify problems affecting 
the progress of projects could support VA's leadership in making 
effective and timely decisions to either redirect or terminate troubled 
projects.
Financial and Logistics Integrated Technology Enterprise (FLITE)
    In September 2005, VA began developing the FLITE program to address 
the longstanding need for an integrated financial management system. As 
a successor to the failed Core Financial and Logistics System 
(CoreFLS), FLITE was a multi-year development effort comprised of three 
components: an Integrated Financial Accounting System (IFAS), Strategic 
Asset Management, and a Data Warehouse. FLITE was intended to provide 
timely and accurate financial, logistics, and asset management 
information. FLITE was also to resolve material weaknesses cited in the 
annual financial statement audit by integrating multiple systems and 
reducing manual accounting processes. In the past year, we issued three 
reports identifying project management shortcomings that hindered VA's 
efforts to accomplish the FLITE program's stated goals.
Audit of FLITE Program Management's Implementation of Lessons Learned
    Our first report on FLITE determined that program managers did not 
fully incorporate lessons learned from the failed CoreFLS program to 
increase the probability of success in FLITE development [Audit of 
FLITE Program Management's Implementation of Lessons Learned, (Report 
No. 09-01467-216, September 16, 2009)]. We found deficiencies similar 
to those identified in CoreFLS reviews also occurred within FLITE 
because program managers had not implemented a systematic process to 
address lessons learned. For example, critical FLITE program functions 
were not fully staffed, non-FLITE expenditures were improperly funded 
through the FLITE program, and contract awards did not comply with 
competition requirements. We recommended that FLITE program managers 
develop written procedures to manage and monitor lessons learned and 
expedite actions to ensure full staffing of the FLITE program.
Audit of the FLITE Strategic Asset Management (SAM) Pilot Project
    Our second report on the Strategic Asset Management (SAM) pilot 
project disclosed that FLITE program managers did not take well-timed 
actions to ensure VA achieved cost, schedule, and performance goals. 
Further, the contractor did not provide acceptable deliverables in a 
timely manner [Audit of the FLITE Strategic Asset Management Pilot 
Project (Report No. 09-03861-238, September 14, 2010)]. Once again, we 
identified instances where FLITE program managers could have avoided 
mistakes by paying closer attention to lessons learned from the CoreFLS 
effort.
    Specifically, FLITE program managers:

     Awarded a task order on April 21, 2009 to General Dynamics 
for implementation of the SAM pilot project, even though the FLITE 
program suffered from a known shortage of legacy system programmers 
critical to integration efforts required to make FLITE a success.
     Did not clearly define FLITE program and SAM pilot project 
roles and responsibilities, resulting in confusion and unclear 
communications between VA and General Dynamics. Contractor personnel 
indicated that they received directions and guidance from multiple 
sources. One of their biggest obstacles was trying to overcome the lack 
of one clear voice for VA's FLITE program.
     Did not ensure that the solicitation for the SAM pilot 
project clearly described VA's requirements for SAM end-user training. 
As such, VA contractually agreed to a training solution that did not 
meet its expectations. General Dynamics subsequently revised its 
training approach to meet VA's needs, but at a total cost of 
$1,090,175, which was more than a 300 percent increase from the 
original $244,451 training cost.
     Did not always effectively identify and manage risks 
associated with the SAM pilot project even though inadequate risk 
management had also been a problem with the failed CoreFLS. 
Specifically, FLITE program managers did not take steps early on to 
ensure that the contractor participated in the risk management process 
and that the Risk Control Review Board adequately mitigated risks 
before closing them.

    Because of such issues, at the time of our audit, VA was 
considering extending the SAM pilot project by 17 months (from 12 to 29 
months), potentially more than doubling the original contract cost of 
$8 million. We recommended that VA establish stronger program 
management controls to facilitate achieving cost, schedule, and 
performance goals, as well as mitigating risks related to the 
successful accomplishment of the SAM pilot project.
Review of Alleged Improper Program Management within the FLITE 
        Strategic Asset Management Pilot Project
    This third report, in response to a hotline allegation, disclosed 
that FLITE program managers needed to improve their overall management 
of the SAM pilot project [Review of Alleged Improper Program Management 
within the FLITE Strategic Asset Management Pilot Project, (Report No. 
10-01374-237, September 7, 2010)]. FLITE program managers did not 
develop written procedures that clearly defined roles and 
responsibilities, provide timely guidance to program and contract 
staff, or foster an effective working environment within the FLITE 
program. FLITE program managers also did not ensure certain elements 
considered necessary for a successful software development effort, such 
as ``to be'' and architectural models were included as project 
deliverables in the FLITE program. In general, we recommended that VA 
strengthen project management controls to improve the SAM pilot, beta, 
and national deployment projects.
    New Office of Management and Budget (OMB) guidance on financial 
systems IT projects, issued on June 28, 2010, also had a major impact 
on the FLITE Program. OMB issued the guidance because large-scale 
financial system modernization efforts undertaken by Federal agencies 
have historically led to complex project management requirements that 
are difficult to manage. Moreover, by the time the lengthy projects are 
finished, they are technologically obsolete. Consequently, OMB directed 
all Chief Financial Officer Act agencies immediately to halt the 
issuance of new procurements for financial system projects until it 
approves new project plans developed by the agencies. On July 12, 2010, 
VA's Assistant Secretary for Information and Technology announced the 
termination of IFAS and Data Warehouse portions of FLITE.
GI Bill Long Term Solution (LTS)
    In September 2010, we reported that OI&T's plan for deployment of 
the LTS was effective in part [Audit of VA's Implementation of the 
Post-9/11 GI Bill Long Term Solution, (Report No. 10-00717-261, 
September 30, 2010)]. LTS is a fully automated claims processing system 
that utilizes a rules-based engine to process Post-9/11 GI Bill Chapter 
33 veterans' education benefits.
    OI&T developed and deployed both LTS Releases 1 and 2 on time. 
Lacking the management discipline and processes necessary to control 
performance and cost in project development, OI&T has relied upon 
Project Management Accountability System (PMAS) to achieve project 
scheduling goals. PMAS is VA's new IT management approach that focuses 
on achieving schedule objectives while the scope of functionality 
provided remains flexible. With this schedule-driven strategy, OI&T has 
been able to satisfy users and incrementally move VA forward in 
providing automated support for education benefits processing under the 
Post-9/11 GI Bill.
    However, OI&T's achievement of the timeframes for LTS Releases 1 
and 2 required that VA sacrifice much of the system functionality 
promised. Specifically, due to unanticipated complexities in developing 
the system, OI&T deployed Release 1 as a ``pilot'' to approximately 16 
claims examiners, with the functionality to handle only 15 percent of 
the Chapter 33 education claims that VBA anticipated processing. 
Release 2 caught up on the functionality postponed from Release 1, 
while providing the capability to process 95 percent of all Chapter 33 
education claims. However, due to data structure and quality issues 
that still had to be overcome, users could not make use of all of the 
functionality provided through Release 2 and were able to process only 
30 percent of all Chapter 33 education claims. In addition to these 
performance issues, OI&T did not have processes in place to track 
actual LTS project costs.
    In the absence of effective performance and cost controls, OI&T 
runs the risk that future LTS releases may continue to meet schedule, 
but at the expense of performance and cost project goals. We 
recommended that OI&T improve LTS management by conducting periodic 
independent reviews to help identify and address system development and 
implementation issues as they arise. We also recommended that OI&T 
adopt cost control processes and tools to ensure accountability for LTS 
costs in accordance with Federal IT investment management requirements.
                               conclusion
    VA continues to rely on IT advancements to provide better services 
to our Nation's veterans. Historically, the department has struggled to 
manage IT developments that successfully deliver desired results within 
cost, schedule, and performance objectives. OI&T recently implemented 
PMAS to strengthen IT project management and improve the rate of 
success of VA's IT projects. Our oversight of the department's IT 
initiatives should provide valuable information to VA and Congress as 
the Department moves forward in managing its IT capital investments.

    Mr. Chairman, this concludes my statement. I would be pleased to 
answer any questions that you or other Members of the Committee may 
have.

    Chairman Akaka. Thank you very much, Ms. Finn.
    Now we will accept the testimony of Mr. Tullman.

 STATEMENT OF GLEN TULLMAN, CHIEF EXECUTIVE OFFICER, ALLSCRIPTS

    Mr. Tullman. Thank you, Mr. Chairman, thank you, Ranking 
Member Burr and other distinguished Members of the Committee. 
Thank you for the opportunity to share our perspectives on the 
use of health information technology within the Veterans 
Affairs Administration and the best path forward.
    My name is Glen Tullman and I serve as the Chief Executive 
Officer of Allscripts. Allscripts is the largest provider of 
health information technology software that physicians, 
hospitals, and other caregivers use to manage care. We serve 
more than 180,000 physicians, 1,500 hospitals, and more than 
10,000 post-acute care facilities and home care agencies who 
use Allscripts solutions to improve their clinical and business 
operations, and importantly, to connect with each other to 
provide care across health care stakeholders. Physicians and 
other health care professionals who use our systems in the 
civilian sector care for thousands of active duty and retired 
military personnel, and we process almost 3.5 million TRICARE 
claims each year.
    In the 19 months since the passage of the HITECH Act, the 
conversation about health care information technology has been 
changed forever. It is my belief that we are at the beginning 
of the single fastest transformation of a major industry in the 
history of our country. Beyond the positive effect on hiring, 
which in our case equates to more than 600 new jobs since ARRA 
passed, new standards, certification, and the concept of 
meaningful use combined with incentives have combined with 
private sector ingenuity to create a new best of breed in 
health care information technology platforms.
    While the private sector has been moving forward in light 
of these incentives, the government has been investing in their 
own proprietary systems for many years. The VA system is made 
up of some of the country's best physicians and has played a 
critical role in demonstrating the value of technology, 
specifically electronic medical records. There is no question 
that VistA was a groundbreaking technology when it was first 
developed. However, today, things are different. The military 
is different. The care delivery model is different. And the 
technology is different. All of this necessitates a change.
    The military has evolved, and during the Iraq and 
Afghanistan conflicts has drawn extensively from the civilian 
ranks, namely the National Guard. That flexibility poses a new 
requirement on electronic medical records. The ability to move 
those records around the world and between civilian and 
military systems is now a must, as compared with the past, 
where treatment was delivered mostly inside of the military and 
VA.
    Just as the military has changed, so has the care delivery 
model. We are saving more wounded warriors. Military and VA 
providers are relying on advanced technologies and newly 
designed collaborative care models. Then, once home, many of 
our wounded soldiers are living examples of the fact that it is 
not just the surgery, but the rehabilitation that is critical. 
Complex patients require teams of physicians to drive 
successful outcomes, and the trends in the civilian world move 
toward Accountable Care Organizations, the Patient Centered 
Medical Home, and efficient care coordination as a means of 
improving quality and better managing cost will be critical for 
the military, as well.
    Patients already increasingly move between the military 
health system, the VA, and the private sector, with physicians 
thus being required to manage patient hand-offs through the 
formation of care teams. It is clear that they need systems 
that can track, manage, and facilitate this communication.
    Even with its strong start and the good work by Assistant 
Secretary Baker over the last year in trying to implement 
positive changes, the fact remained that VistA's basic 
platform, which relies on 25-year-old technology called MUMPS, 
cannot support the open, flexible approach needed to provide 
care to our Nation's wounded servicemen and women. Rather, the 
demands of today's military and veteran health care environment 
necessitates the use of technologies such as those based on 
Microsoft architecture and open source that can support an 
open, shared approach that will not just be desirable, but a 
fundamental requirement in the near future. A fitting analogy 
is the move the world made from a reliance on self-contained 
mainframes to a distributed flexible system like the Internet.
    To optimize both care and cost, we need a system that 
easily and natively can talk with each other. Our belief is 
that usability and interoperability are core to the success of 
true IT adoption and should drive not only the development of 
individual products, but also the infrastructure underpinning 
health information technology exchange efforts.
    Allscripts clients share information successfully today in 
the private sector with colleagues in the VA and the military 
health system. For example, in Hartford, CT, we have been 
partners with a project for almost 2 years that led to 
widespread health care IT adoption as well as successful 
implementation of open source health care information 
connectivity. Our partnership with Karen Fox and her team at 
Delta Health Care Alliance in Mississippi has enabled VHA to 
make substantial progress on information exchange. The 
University of Massachusetts is another example of fostering 
connectivity between communities and large organizations 
providing health care. Finally, last but not least, we are 
partnered with TeamPraxis, an organization based in Hawaii 
where we are connecting almost one-third of the physicians in 
Hawaii.
    In the end, health care is about information and we simply 
cannot address the challenges the Nation is experiencing today 
in both private and public sector health care without ensuring 
providers have the information they need to make better 
decisions and the ability to communicate with others on a 
patient's care team, independent of the system they are using. 
It is time to learn from the successes in the private sector 
and make technology work for the Veterans Health Care 
Administration and the military health system.
    So I want to thank you for the opportunity to share my 
thoughts today and I look forward to your questions.
    [The prepared statement of Mr. Tullman follows:]
Prepared Statement of Glen Tullman, Chief Executive Officer, Allscripts
    Chairman Akaka, Ranking Member Burr, and other distinguished 
Members of the Committee, thank you for the opportunity to share with 
you today our perspectives on the use of health information technology 
within the Veterans' Affairs Administration and the best path forward.
    My name is Glen Tullman, and I serve as the Chief Executive Officer 
of Allscripts. Allscripts is the largest provider of health information 
technology software that physicians, hospitals and other caregivers use 
to manage patient care. Following our merger with Eclipsys in August, 
there are now more than 180,000 physicians, 1,500 hospitals and more 
than 10,000 post-acute care facilities and homecare agencies utilizing 
Allscripts solutions to improve their clinical and business operations 
and to connect to a variety of healthcare stakeholders. Allscripts is 
also the largest provider of electronic prescribing solutions, and 
through our revenue cycle management clearinghouse, we process more 
than 300 million claims, remittance and eligibility transactions each 
year.
    Physicians and other healthcare professionals who use our systems 
in the civilian sector care for thousands of active duty and retired 
military personnel, and we process almost three-and-a-half million 
TRICARE claims each year. For example, in North Carolina, where one of 
every two physicians in the State is an Allscripts client, there are 
750 physician practices using our systems while caring for the large 
local military population.
    In the 19 months since the passage of the HITECH Act within the 
Stimulus legislation, the conversation about health information 
technology has been changed forever. It is my belief that we are at the 
beginning of the single fastest transformation of a major industry in 
the history of our country. Beyond the positive effect on hiring, which 
in our case equates to more than 600 new jobs since ARRA passed (most 
of which are in North Carolina, Illinois and Vermont), the incentives, 
along with new standards, certification, and the concept of Meaningful 
Use, have combined with private sector ingenuity to create a new 
``best-of-breed'' in healthcare information technology platforms. The 
investment Congress and the Administration has made will lead to the 
delivery of better care, yield savings due to efficiency improvements, 
and markedly improve patient safety in the private sector.
    While the private sector has been moving forward in light of these 
incentives, the Government has been investing in their own proprietary 
systems for many years. Billions of dollars have been spent to build 
and implement the VistA/CPRS system within the Veteran Health 
Administration and the AHLTA system within the Military Health System.
    The VA health system is made up some of the country's best 
physicians and has played a critical role in demonstrating the value of 
technology, specifically electronic medical records. There is no 
question that VistA was a groundbreaking technology when it was first 
developed, and over the years it has been improved with the development 
of CPRS, VistARad and other expansions. However, today things are 
different: the military is different. The care delivery model is 
different. And the technology is different. All of this necessitates a 
change. Let me explain.
    The military has evolved significantly when compared to what 
existed even only a few years ago. It moves people around frequently, 
conducting joint exercises and, during the Iraq and Afghanistan 
conflicts, has drawn extensively from the civilian ranks, namely the 
National Guard. That flexibility is key to successes by the Armed 
Forces, but it also poses a new requirement of medical records--the 
ability to move those records around the world and between civilian and 
military systems is now a must, as compared to the past when most 
treatment was delivered inside of the military and VA systems.
    Just as the military has changed, so has the care delivery model. 
First and foremost, we are saving more wounded warriors. Military and 
VA providers are relying on advanced technologies and newly-designed, 
collaborative care models. And, once home, many of our wounded soldiers 
are living examples of the fact that it isn't just surgery but 
rehabilitation that is critical. Complex patients require teams of 
physicians to drive successful outcomes, and the trends in the civilian 
world--the move to Accountable Care Organizations, the Patient Centered 
Medical Home and efficient care coordination as means of improving 
quality and better managing costs--will be critical for the military, 
as well. Patients already increasingly move between the Military Health 
System, the VA and private sector, with physicians thus being required 
to manage the patient hand-offs through the formation of care teams--
either formal or informal--designed to ensure smooth care transitions. 
It is clear they need systems which can track, manage and facilitate 
this communication.
    Even with its strong start and the good work by Assistant Secretary 
Baker over the last year in trying to implement positive change, the 
fact remains that VistA's basic platform, which relies on the 25-year 
old technology called Mumps, cannot support the open, flexible approach 
needed by those providing care to our Nation's wounded servicemen and 
women. Rather, the demands of today's military and veteran healthcare 
environment necessitate the use of technologies--such as those based on 
Microsoft's architecture--that can support an open, shared approach 
that will not just be desirable, but a fundamental requirement in the 
near future. A fitting analogy is the move the world made from reliance 
on self-contained mainframes to a distributed, flexible system like the 
Internet. The fact is, if you happen to live in one of the few areas 
with a closed healthcare system, merely moving healthcare records from 
paper silos into electronic silos--which is more or less what we've 
been doing for the last decade--can be made to work. But in the 
interconnected world that exists today, a closed system is not the norm 
for healthcare in the private sector, with patients moving from Point A 
to Point B to Point C, and increasingly, it is clear that the 
interchangeable requirements of the military environment means that a 
closed system approach simply isn't sufficient there, either. To 
optimize care and costs, we need systems that easily and natively talk 
with each other.
    Unfortunately, attempts to share information between AHLTA and 
VistA have largely been unsuccessful. The North Chicago project--near 
my own home--is an example. Reports, including local newspapers, 
indicate that to date, the project has not achieved the goals set out 
of delivering interoperability between the two systems, with an 
exchange of medication information but no exchange of allergies, 
problems or clinical orders. We understand that physicians treating the 
patients who move between the two systems have, in many cases, resorted 
to housing two workstations in the exam room because of the double 
documentation that they are required to complete. It is simply not yet 
delivering on its potential, but it is my belief that coupling the 
focused effort to date with the right architecture and system design, 
as used in the private sector, could right the ship and deliver the 
results we seeking.
    It is our belief that usability and interoperability are core to 
the success of true health IT adoption and should drive not only the 
development of individual products but also the infrastructure 
underpinning health information exchange efforts. Allscripts clients 
share information successfully today in the private sector and with 
colleagues in the VA and the military health system. For example, in 
Hartford, Connecticut, we have been partners in a project for almost 
two years that has not only led to widespread health IT adoption but 
successful implementation of open source health information exchange 
technologies. Our partnership with Karen Fox and her team at Delta 
Health Alliance in Mississippi has enabled DHA to make substantial 
progress toward their goals of improving care through improved access 
to information. The University of Massachusetts is another example, not 
only fostering health IT adoption among local physicians in their area 
but also leading the state in connectivity efforts through an active 
exchange of information every single day. Allscripts is also working in 
the state of Vermont to facilitate Electronic Health Record adoption 
and deliver interoperability through a focused partnership with the 
Vermont Information Technology Leaders (VITL) project, one that has 
established a leadership position that other states in the country have 
chosen to emulate.
    In the end, healthcare is about information, and we simply can't 
address the challenges the Nation is experiencing today in both private 
and public sector healthcare without ensuring that providers have the 
information they need to make better decisions, no matter where they're 
delivering care, and the ability to communicate with others on the 
patient's care team, independent of the system they are using. There is 
no one who would disagree that patients moving between providers and 
sites of care in the healthcare system deserve the best quality 
possible, which means that the information about the patient has to be 
available where it's needed, when it's needed. We can also agree that 
the government should lead the way by delivering world class healthcare 
to the Armed Forces of this Country and doing everything it can to make 
this happen in a timely and cost-efficient manner. It is time to learn 
from the successes of the private sector and make technology work for 
the Veterans Health Administration and the Military Health System.

    I want to thank you for the opportunity to testify, and I look 
forward to your questions.

    Chairman Akaka. Thank you very much, Mr. Tullman.
    Mr. Tullman. Thank you.
    Chairman Akaka. Now we will receive the testimony of Mr. 
Munnecke.

   STATEMENT OF TOM MUNNECKE, FORMER INFORMATION TECHNOLOGY 
         OFFICIAL, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Munnecke. Thank you very much, Chairman Akaka and 
Members of the Committee, for this opportunity to speak. I 
would also like to say that I sympathize with the Senator's 
complaints about the VA. As someone who has worked with or 
watched the VA for 32 years, I have many of my own complaints 
about the central office, but Roger Baker, I think, has a very 
good grip on the IT situation. I am impressed with what I hear 
he is doing so congratulations.
    Thirty years ago, I was a computer specialist at the Loma 
Linda VA Hospital, working with a small group of programmers 
developing VistA. Things were at a fever pitch of innovation. 
Tens of thousands of VA employees from all over the country 
were connected on an electronic conferencing system which today 
would be called a social networking site. For any given issue, 
the VA had world class experts available that could be tapped 
internally. From this tiny seed, the VistA system flowered in 
one of the world's great medical information systems, as we see 
today.
    At that time, under a VA/DOD sharing legislation set up by 
Representative Sonny Montgomery, Loma Linda and March Air Force 
Base made a local agreement to install a modified VistA at 
March Hospital. This was a successful case of VA-DOD 
information sharing dating back to 1983.
    One of the key factors of the success of VistA was the 
decentralization and the direct day-to-day involvement of 
field-based VA clinical staff. The original developers all came 
from a clinical background and were deeply experienced in the 
nuances of medical informatics. We were able to focus on 
medical needs rather than be distracted by the problems of 
administrative computing.
    We designed the system to be an adaptive system, starting 
with good enough and then putting it out in the field for 
direct user involvement to make it better. We did not presume 
to know the final answer in advance, so we employed a 
generation's, not specifications, approach to controlling the 
system's evolution. We were a skunk works--replacing the 
bureaucratic procedures with a notion of creating a path of 
least resistance to our desired goal.
    We used a language called MUMPS, a language that was 
designed specifically for medical informatics. This attracted 
much criticism at the time, which continues to this day. The 
DOD, VA, and Indian Health Service all enjoy, however, stable 
long-term electronic health records that are based on 
decentralized MUMPS, and in looking toward the future, I would 
suggest that we maintain an understanding of what did succeed 
in the past.
    I would also caution the Committee that the electronic 
medical record systems are far more complex and specialized in 
their needs than standard IT applications. The open source 
technology that is proposed for the next generation of VistA is 
a very good move, I think, but I also want to suggest that the 
VA carry forward the lessons learned and the innovation learned 
with the VistA architecture to future architectures. Future 
technologies should not pave the cow path of replicating the 
old model, but rather support bold innovations in the delivery 
of care to our Nation's veterans.
    One of the things I noticed when I first joined the VA was 
the difficulty of communicating across the stovepipes. I will 
call this a failure to communicate. I also noticed that one of 
the most highly used applications in the VistA system was the 
Mailman system--simply people communicating their clinical 
needs in an informal, person-to-person, peer-to-peer model. At 
some points, this reached 25 percent of a hospital's traffic. 
It was just people communicating.
    So I want to strengthen the idea that part of the role of 
IT is to overcome this failure to communicate. There are rich 
opportunities for improving communications in general over and 
above the current focus on the medical record, which I think 
should be viewed as only one form of communication.
    While VistA's success was based on the principles of 
decentralization, I would like to suggest that future systems 
be based on the notion of personalization, in which the veteran 
is at the center of their personal health care universe. 
Personalization includes the personalized health record, 
personalized medicine, personal genomics, home health care, 
telemedicine, and others. It also includes the role of social 
networks and building communities of health, which allows us to 
develop a positive health-oriented model that is integrated and 
balanced with the disease model we have today. Perhaps we might 
even achieve Jonas Salk's vision of creating an epidemic of 
health.
    When Pierre Omidyar started eBay, he personalized the 
auction experience between millions of buyers and sellers. He 
did not try to integrate the auction industry. He provided the 
tools to connect the dots. I suggest that we envision a future 
consisting of a thriving Federal health care community 
personalized around the individual's health needs. Much can be 
done with simple, inexpensive, and quick-to-implement tools 
that could reduce many of the public fears about privacy and 
open the system to innovation to deliver better care to our 
Nation's veterans.
    Thank you very much for your time, and I look forward to 
answering any questions.
    [The prepared statement of Mr. Munnecke follows:]
       Prepared Statement of Tom Munnecke, Former VA IT Official
    Thank you, Chairman Akaka, Ranking Member Burr, and Members of the 
Committee. As someone who has been passionately involved with health IT 
in the VA for 32 years, it is a pleasure to appear at this hearing to 
discuss the elements that led to success in VistA as well as how this 
might contribute to a Health IT system of the future.
    Thanks to modern day communications technology, your staff reached 
me to invite me to this hearing during a vacation in the middle of 
Oregon's Cascades mountains. I only had one day at home to prepare for 
the hearing, so please understand that this is a rather hurried set of 
comments.
    I was one of a small set of programmers hired by the VA in 1978 to 
work on an ANS MUMPS-based decentralized hospital computer system, what 
is now called VistA. I was a computer specialist employed at VA Loma 
Linda, California, working with a network of others around the country 
who pulled together a most remarkable effort to bring computing 
technology to clinical users in the VA. I was one of the lead software 
architects of the effort until 1986, when I went to Science 
Applications International Corporation in San Diego to play a similar 
role for the Composite Health Care System (CHCS) an adaptation of 
VistA. I was a consultant to VHA in the late 1990's in which I wrote a 
number of papers looking at future applications of IT in the VA (see 
Appendix). I took an early retirement as a VP and Chief Scientist at 
SAIC to pursue a broader field of philanthropic, humanitarian, and 
educational uses of technology, particularly with regard to those at 
the ``bottom of the pyramid.'' I became a fellow at Stanford 
University, and was funded by Omidyar Foundation to develop a social 
network toolkit for philanthropic activities. I founded a group called 
the Uplift Academy, and have held workshops and salons around the world 
on the broader role of technology and society, including health care.
    I appear at this Committee as a private citizen at my own expense, 
with the sole motivation of improving service to our veterans through 
appropriate uses of information technology.
    Twenty-eight years ago, the Decentralized Hospital Computer Program 
(DHCP, later called VistA) was at a fever pitch of innovation. Tens of 
thousands of VA employees were connected on an electronic FORUM on a 
daily basis, sharing ideas, giving feedback, starting up new projects, 
complaining about others, and contributing in one way or another to the 
clinical application of computer technology to the delivery of service 
to our veterans. I would install a new version of the software one 
night, and the next day at the hospital cafeteria I would hear about 
what was good and what was bad about the changes. I would communicate 
these ideas to the developers via FORUM, and we would see changes in 
the software in hours or days. I installed a computer running VistA at 
the March Air Force Base hospital, an early instance of VA/DOD IT 
sharing.
    Lesson Learned:  Clinical information is vastly different from 
administrative information. One of VistA's strengths was that it was 
able to focus directly on the clinical.
    VistA was developed directly as a clinical tool, by clinicians, for 
direct patient care. While there are many administrative needs of an 
enterprise for logistics, cost accounting, billing, payroll, and the 
like, these are a fundamentally different kind of computing.
    Lesson Learned: Decentralization works. The extensive end-user 
collaboration was a key factor to the success of VistA.
    When I first started at the VA, I ran into the bureaucratic 
``stovepipe'' mentality everywhere I went, even though everyone had a 
supposedly common goal of providing health care to our veterans. 
Recalling the words of the Sheriff in Cool Hand Luke, it seemed that 
the core problem could be expressed as ``What we have here is a failure 
to communicate.''
    In college, I was struck by the Sapir-Whorf hypothesis that 
language shapes our thought. I began to focus my attention on ways of 
using IT to overcome the failure to communicate. This led to the 
development of an integrated data dictionary that served as a 
``roadmap'' to the patient data. Today, this would be called a 
``Semantic Web'' (See http://www.caregraf.org/semanticvista for a 
modern semantic web interface to the VistA database). We integrated 
electronic mail directly into the clinical interface, allowing database 
activities to generate email messages through an email/discussion/
workflow system called MailMan. I was amazed at how heavily used 
MailMan was--in some cases, 25% of the traffic in a VistA system was 
email traffic. This demonstrated how communications-intensive clinical 
care is, even outside the formal communications traffic in the specific 
applications such as pharmacy, laboratory, or radiology. I think that 
VistA broke down many of the bureaucratic stovepipe barriers, allowing 
people to focus on what was best for their clinical practice.
    Lesson Learned: The fundamental goal in health IT should be to 
improve communications. The medical record is but one form of 
communication.
    All of the initial developers of VistA were employed in the field, 
working closely with end users. Riding the elevator with a gurney 
headed to the morgue was a sobering experience, and helped keep me 
focused on the implications of the software I was developing. The trust 
we placed in the VistA community was well-placed. People felt respected 
and acted accordingly, knowing that they were contributing to a larger, 
more successful whole.
    The goal of our system was to produce a constantly improving, 
evolutionary system. Our goal was to get something ``good enough'' out 
into the field, and then begin the improvement process. We had neither 
money nor time for gold-plated requirements and specifications. Our 
motto was, ``generations, not specifications.'' We didn't claim to know 
the end point of the system when we started, but rather created tools 
for users to adapt. Someone used to waterfall/requirements driven life 
cycle process might find this appalling--that users could interactively 
develop a system in tandem with developers--but it was a key factor to 
the success of VistA.
    Lesson Learned: Generations, not Specifications. Start with ``good 
enough'' and allow it to continuously improve through end user 
interaction.
    VistA was designed to be adaptable to change. When we began, we 
were using PDP-11 computers, which now exist only in museums. Over the 
years, the system was hosted on VAX, Alpha, IBM Mainframe, PowerPC, and 
Intel computers with little or no modification. VistA was designed 
around a ``kernel'' architecture, consisting of common foundation that 
was used by all applications, but customized for specific needs of the 
various departmental needs such as laboratory, pharmacy, radiology, 
etc. The closest modern day equivalent to this is Facebook, which 
provides all users with a common set of tools, and then allows them to 
install ``apps'' to do specific tasks. We used a trimmed down version 
of the ANS MUMPS language, using only 19 commands and 22 functions.
    Lesson Learned: Create a Path of Least Resistance to where you want 
to go.
    For example, at the 1978 Oklahoma City conference, we decided on a 
standard format for storing dates in the computer. We knew that some 
patients had been born in the 1900's, and we also knew that we would 
eventually be dealing with dates in the 2000's. We created a program 
that would handle dates in this way, making it easier to do it the 
right way. We had a design ethic of making it easier to do the right 
thing: creating a path of least resistance to where we wanted to go.
 comments on the vista modernization report: from legacy to leadership
    The report\1\ is an impressive effort by a large number of 
committed industry advisors. I applaud the recommendation to move 
toward open source, and many of the recommendations.
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    \1\ http://www.actgov.org/sigcom/vistapublic/VistA%20Documents/
VistA%20Modernization%20 Report%20-
%20Legacy%20to%20Leadership,%20May%204,%202010.pdf
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    However, I did not see the elements that lead to the success of 
VistA particularly well-represented in the report. The report focused 
on a heavily centralized, Washington-based development effort. User 
involvement was not stressed to the degree that it drove the original 
VistA development. It did not seem to fully recognize the unique needs 
of medical informatics, and seemed to make the all-to-common mistake of 
lumping clinical information with transaction-based administrative and 
billing systems.
                           comments on mumps
    Key to the success of VistA was the ANS MUMPS programming language. 
The Federal health IT systems that have been written have all been 
successful, stable systems: VistA, DOD's CHCS, IHS' RPMS. The Health IT 
systems that have been programmed in non-MUMPS languages (TRIMIS, IOCs, 
AHLTA) have been failures. Kaiser Permanente's EHR system is based on 
MUMPS (Epic), and a leading contender for the AHLTA replacement is also 
MUMPS-based.
    Yes, MUMPS is an old language, but the fact that it has enjoyed all 
of this success bears close scrutiny by those seeking to replace it.

    Question. Is the weakness of the current VistA due to MUMPS, or the 
VA's management of development process?
    The report criticizes MUMPS as being a legacy system, as being 
brittle and difficult to maintain. However, VA Central Office has been 
responsible for the architecture for 25 years now, and has had 25 years 
to address these problems. Instead of investing in its basic 
infrastructure, it has deferred its maintenance reach the breaking 
point we see today.
    If you asked a carpenter to build a house for you, and the house 
turned out to be crooked, you wouldn't accept the carpenter saying, 
``That darn hammer made the house crooked. You are going to have to buy 
me a better hammer.'' VA Central Office has been using a tool for 25 
years, and rather than keeping it current and up to date, is now 
blaming the tool, not their management of it, for the problems we see 
today.
    If indeed the VA needs to move away from a MUMPS-based 
architecture, it is imperative that it understands exactly what worked 
in the past. I think that this will require a deeper dive into the 
foundations of VistA to be fully appreciated.
    Lesson Learned: VistA is not just computer screens.
    VistA was an outpouring of creativity of thousands of VA employees 
working together to improve service to veterans. This created many 
bonds of innovation and a shared sense of purpose that drove the 
community. The report seems to reduce VistA to strictly an IT issue--
replicating the screens of the old system. VistA needs a broader 
organizational context in order to thrive in the future.

    Question. Is the VA just ``paving the cowpaths'' with new 
technology?
    The recommendation that VA freeze development of the legacy system 
while engineering a new one that is functionally equivalent is a high-
risk approach that threatens to stall IT innovation in the VA for a 
significant period. If the new approach is delayed or fails, the VA 
would be freezing itself out of innovation and years of new 
development.
                            looking forward
    A mobile phone today has about 1000 times the computing and 
communications capacity of the computer I first used to install VistA 
at Loma Linda Hospital. It costs about one one-thousandth the price: a 
millionfold price-performance improvement. One would expect that this 
drop in the cost of the electronics would lead to a corresponding drop 
in the cost of Health IT. Internet users today have access to an 
incredible array of free services for email, social networking, photo 
and video sharing, text messaging, mailing lists, auction sites, and 
the ability to search billions of web pages instantly.
    Unfortunately, this is not the case. Health IT costs are spirally 
upwards rapidly, and systems that used to cost millions in the 1980s 
are costing in the billions today.
    Why is this? Why is it that costs outside of health IT are 
plummeting and functionality exploding, while the cost of health IT is 
exploding and the functionality creeping forward slowly, if at all?
    Imagine someone trying to sell the world's greatest automobile. He 
offers the best car parts: an engine from a Corvette, the seats from a 
Rolls Royce, and a transmission from a Porsche. All that is required, 
he says, as a customer leaves with a truckload of these best of breed 
parts is ``a little bit of integration.''
    So it is with Health IT today. Vendors are offering ``best of 
breed'' components (with corresponding premium prices) and then 
offering integration services to customize them to specific customer 
needs. Yet the integration costs--connecting the dots--are the 
overwhelming factor.
    One way out of this is to reframe our thinking of IT architecture 
as a ``space'' rather than a ``system.'' Consider what Tim Berners-Lee 
said about the creation of the World Wide Web:

        What was often difficult for people to understand about the 
        design of the web was that there was nothing else beyond URLs, 
        HTTP, and HTML. There was no central computer ``controlling'' 
        the web, no single network on which these protocols worked, not 
        even an organization anywhere that ``ran'' the Web. The web was 
        not a physical ``thing'' that existed in a certain ``place.'' 
        It was a ``space'' in which information could exist.''

    This opens up an extremely fertile discussion on how health IT 
might be supported using web-like information structures, as well as 
reduce the complexity we see in our systems today.
    I have written other papers on this topic (see Appendix). Some of 
the more directly pertinent papers include:

     HealthSpace architecture: http://munnecke.com/papers/
HealthSpace.doc
     Ensembles and Transformations: http://munnecke.com/papers/
D16.doc
     Concepts of the Health Data Vault: http://munnecke.com/
papers/D03.doc
                                summary
    VistA was an amazing outpouring of innovative collaboration within 
the VA that changed both its information technology and its 
organization. Decentralization and direct user involvement were key to 
its success, as well as having a technical infrastructure capable of 
supporting it.
    Going forward, the VA should look to a theme of personalization of 
health--both in its IT infrastructure and its delivery of health care 
in today's rapidly changing environment.

    I would be happy to answer any questions you may have now or from 
those reading this transcript.
                               Appendix:
    These were papers relating to the future of Health IT in the VA 
that I wrote under contract to the VA from 1998 to 2000. A full list 
may be found on the web at http://munnecke.com/blog/?page--id=248
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
HealthSpace (139kb)                      January, 1998             Some early thoughts on the notion of creating
                                                                    a ``space'' rather than a ``system'' of
                                                                    health.
----------------------------------------------------------------------------------------------------------------
Some Applications of Complexity Theory   December, 1998            Discusses the concepts of Dee Hock's
 to Health Care (93kb)                                              ``Chaordic'' thinking to health care, as
                                                                    well as general complexity theory issues
----------------------------------------------------------------------------------------------------------------
Shared Meaning and Health Informatics    January, 1999             Discusses some of the challenges of
 (70kb)                                                             overspecific standards efforts, as well as
                                                                    some of the underlying philosophies.
----------------------------------------------------------------------------------------------------------------
Concepts of the Data Vault (57kb)        February, 1999            Introduces the notion of a personal data
                                                                    vault as a key component of a personal
                                                                    health space per patient.
----------------------------------------------------------------------------------------------------------------
From Enterprise to Person-Centric        April, 1999               Discusses the shift from enterprise-based
 Health Information Systems(54kb)                                   health care to person-centric.
----------------------------------------------------------------------------------------------------------------
Health as a Medium (241kb)               May, 1999                 Portrays health as a medium, and many health
                                                                    problems as a ``failure to communicate."
----------------------------------------------------------------------------------------------------------------
Personalizing Health (107kb)             June, 1999                Discusses the issues of personalization at
                                                                    several levels
----------------------------------------------------------------------------------------------------------------
Steps towards an Epidemic of Health      July, 1999                Discusses some of the initial conditions
 (95kb)                                                             required to create an epidemic of health.
----------------------------------------------------------------------------------------------------------------
Design Patterns for Health (461kb)       August, 1999              Explores the application of architect/
                                                                    philosopher Christopher Alexander's ideas to
                                                                    health
----------------------------------------------------------------------------------------------------------------
New Health and the New Economy (67kb)    October, 1999             Compares a new vision of health with the
                                                                    ``New Rules of the New Economy'' book by
                                                                    Kevin Kelly
----------------------------------------------------------------------------------------------------------------
Rethinking Complexity (63kb)             November, 1999            Discusses issues of complexity and how to
                                                                    circumvent them using ``space'' metaphor.
----------------------------------------------------------------------------------------------------------------
Health and the Devil's Staircase (45kb)  January, 2000             Applies fractal thinking to health
----------------------------------------------------------------------------------------------------------------
Systemic Issues of Patient Safety        March, 2000               Introduces a spectrum of scales to think
 (208kb)                                                            about health, relates this to the notion of
                                                                    patient safety.
----------------------------------------------------------------------------------------------------------------
Tipping an Epidemic of Health (95kb)     May, 2000                 Discusses why the connectivity provided by
                                                                    the Internet is on the verge of creating an
                                                                    epidemic of health
----------------------------------------------------------------------------------------------------------------
Ensembles and Transformations (23kb)     July, 2000                Introduces ensembles as communities of
                                                                    interest which provide a context for
                                                                    transformations.
----------------------------------------------------------------------------------------------------------------
Health and Positive Discourse (109kb)    August, 2000              Examines notions of Appreciative Inquiry,
                                                                    positive discourse, and optimism in light of
                                                                    Internet technology
----------------------------------------------------------------------------------------------------------------
Flipping from Negative to Positive       September, 2000           Examines the effects of negative discourse,
 Discourse (25k)                                                    how naming a problem can make it worse, and
                                                                    examples of positive discourse.
----------------------------------------------------------------------------------------------------------------
Assumptions of the Transactional Health  October, 2000             Examines some of the assumptions of the
 Model                                                              transactional model of health, such as
                                                                    linearity, the economics of scarcity, and
                                                                    deficit discourse.
----------------------------------------------------------------------------------------------------------------
A Transformational Notion of Health      November, 2000            Discusses transformational concepts in
                                                                    health, flipping assumptions of the above
                                                                    transformational model
----------------------------------------------------------------------------------------------------------------
New Perspectives                         July, 2001                Discusses the inversion of enterprise/person
                                                                    relationship, complementary currencies, and
                                                                    HailStorm architecture(.pdf) (html)
----------------------------------------------------------------------------------------------------------------
Towards a language of Health (122K)      Nov, 2001                 Proposes Genos, a language which would allow
                                                                    expression of health and genomic information
                                                                    for clinical use. (html) (pdf)
----------------------------------------------------------------------------------------------------------------
Can Health Care IT Adapt? (800K)         Jan, 2002                 Discusses issues for adaptation in our
                                                                    information technology infrastructure, in
                                                                    light of prospective advances in Genomics
                                                                    and Proteomics (html)
----------------------------------------------------------------------------------------------------------------
From Systems to Spaces                   June, 2002                A space-based metaphor for patient health
                                                                    information systems (htm) (pdf)
----------------------------------------------------------------------------------------------------------------


    Chairman Akaka. Thank you. Thank you very much, Mr. 
Munnecke.
    Mr. Baker, what can you point out that would help persuade 
the Committee that VA has learned from its past and that we 
will not experience expensive IT project failures in the 
future?
    Mr. Baker. Thank you, Senator. I will keep this answer 
brief, because I would love to give you 10 minutes on that one. 
I think the biggest lesson that we took from the failure of the 
replacement scheduling application was that we have to make 
certain that the hard decisions are faced and made. From there, 
I think you have seen a series of hard decisions made at the VA 
relative to other projects. Stopping 45 projects in July of 
last year was, frankly, a hard decision for our customers, 
facing up that those projects were not delivering. Stopping 
some of those projects and just saying we are not going to be 
able to be successful at those, has been a series of hard 
decisions. Frankly, reforming a few of them was not viewed 
positively, but we recognized that they were not going to 
deliver if we did not change them to an incremental delivery.
    Some of the more notable ones that I think we get 
criticized for, for example, stopping the FLITE program; they 
are hard decisions. They are not decisions that we take lightly 
and they are not decisions that we view from only one aspect. 
But in the end, we have to determine if we can be successful. 
If we believe, we cannot be, if we believe it is an overreach, 
we need to not do the program. So I would point you to not just 
some of the things we have done, some of the programs we have 
instituted, but the results of those programs.
    Most importantly, we do not allow a project to move forward 
today if they do not have a customer facing deliverable within 
the next 6 months. What that means is they are not going to go 
a long time, like the replacement scheduling project did. 
Replacement scheduling went years without delivering anything 
before they finally figured out it could not deliver anything.
    We now are implementing a technique we are calling Fail 
Fast. You know, if it is going to fail, figure it out quickly 
and stop spending money on it. That has generated a lot of us 
facing up to those hard decisions, again, inside the 
organization.
    So I would give you those two things. Again, in many ways, 
that is my life inside the VA, making certain we do not 
replicate those things from the past and that we do not have 
any more replacement scheduling scenarios.
    One thing I would add is I have also promised Secretary 
Shinseki that we will not have another replacement scheduling 
while he and I are at the VA.
    Chairman Akaka. Well, let me give the other witnesses a 
chance to add anything about how to avoid these high-profile 
failures. Mr. Munnecke?
    Mr. Munnecke. As a software architect being faced with 
these demands on the technical side, I find that the users--and 
this might come from Senate and Congressional committees, by 
the way--want to have the penthouse suite of a skyscraper, but 
they do not want to pay for the lower 22 floors and the 
foundation of the building. So they say, I want this thing up 
at the top. Give it to me tomorrow, or yesterday. Then 
everybody has to scramble to build the skyscraper. As an 
architect, I have to dig a hole in the ground to build a 
foundation. They say, no, no, I want the skyscraper. I want the 
penthouse suite.
    So I think Mr. Baker's approach, which I wholly endorse, 
should also include the requirements that people who are 
building not make them gold-plated penthouse suites, but maybe 
even accept the tenth floor of an existing building and scale 
it down to allow it to evolve over time rather than go for the 
big push and the big bang that may not be possible. So it 
should be a process of discovery and working forward gracefully 
rather than expecting the gold-plated requirement to be met 
immediately.
    Chairman Akaka. Mr. Meagher?
    Mr. Meagher. Thank you, sir. One thing I would add is this 
notion of accountability, personal accountability. When you 
have the projects broken up into small pieces where you make 
sure all the parts are in place before you begin: that there is 
an agreed-upon business requirement; there is a business owner; 
there is competent, experienced program management. Then you 
hold people accountable for their deliverables and for meeting 
their milestones. That is a culture change that is taking 
place, I would suggest to you, over the last 18 months that is 
very dramatic and is probably one of the main pillars to why I 
think you are seeing the turnaround that some of you have 
recognized and I really believe is there.
    Chairman Akaka. Mr. Tullman?
    Mr. Tullman. Yes. I would again compliment Assistant 
Secretary Baker on the progress in what I heard today. You 
know, we believe that the private sector should play an 
increasingly large role in developing these systems. We are 
developing very similar systems for the civilian health care 
system, and increasingly what we are seeing is these two are 
meshing together. People are moving back and forth, in and out 
of the military and other services, and the government, as 
well.
    So we would like to make sure that, number 1, the 
government is looking at what the private sector has to offer, 
and two, we believe that there are much better systems to form 
the community that my counterpart here talked about, a 
community of the VA. They are out there. There are social 
networking systems. There are open platforms. There are 
Microsoft-based systems. They are not based on what is 
essentially a 25-year-old transaction processing language 
called MUMPS. So we would like to see the new systems based on 
newer, broader standards and have the government in the role of 
setting the standards for what they want and let the private 
sector compete to deliver and be punished if they do not.
    Chairman Akaka. Let me now ask for questions from our 
Ranking Member, Senator Burr.
    Senator Burr. Thank you, Mr. Chairman.
    Mr. Baker, just a comment. You made the observation that as 
you cut IT programs, some of that money was reprogrammed over 
to operations and maintenance. At the same time as that is 
going on, we had savings in the construction of facilities area 
of which we are in the process of reprogramming over to build 
additional facilities.
    I would only make this comment. VA continues to short 
operations and maintenance, year in and year out. Now, you are 
going to come back to us and you are going to ask for 
additional money for IT programs and we are going to feel 
compelled to give it to you. It is going to happen. We keep 
moving money around and we do not leave it where it not only 
does the most long-term good, but this reprogramming lets us 
off the hook from actually making the right decisions on 
operations and maintenance for this year, next year, every 
year.
    So my hope is you will carry a message back. I, for one, as 
a Member of the Committee, am going to become much more 
observant of the reprogramming of money. If we get at the end 
of the year and we see money left over in your account, it will 
be because either, one, we projected wrong; two, we got 
savings; or three, we eliminated programs. We can reprogram 
that money for the next year so that it goes toward the program 
needs that you are going to have.
    Let me stay with you, Mr. Baker. You listened to two 
competing views on future architecture, for MUMPS, against 
MUMPS. Who is right?
    Mr. Baker. Well, I guess being a political appointee, my 
job is to kind of run down the middle of this, and I do, 
technically. Several things come together from my standpoint 
here. One is an old adage that I have that the definition of a 
legacy system is that is the one you know works. We have----
    Senator Burr. Let me just ask a follow-up question. If you 
maintain MUMPS, can the private sector have full access into 
the VA system, into the MUMPS system, for the exchange of 
electronic information?
    Mr. Baker. I would answer it this way. I believe just as 
much as if we implement it in any other language, because at 
the bottom, it is the data that is important.
    Senator Burr. OK. Now let me turn to Mr. Tullman, if I can, 
simply because he is out there in the private sector. Now let 
us see what the limitation is.
    Mr. Tullman. What I would say is, and again, I think you 
can extract data for any system. What we are really talking 
about, and I do not want to get too technical, is the native 
exchange of information. So you can pull information out of a 
mainframe system and put it into a PC if you want two people to 
talk to each other. The question is, why would you do that when 
you could have two PCs that were talking with each other?
    So again, we think MUMPS was the right decision to make 
when it was made. We think there is a reason to carry forward. 
We are just saying, as we go forward into the future we need to 
broaden the understanding of what systems to use, what 
architectures to use, and what are the general reason we need 
these systems, and that is for communication. And I think that 
is this idea that this community is important, yet no one is 
using MUMPS to build systems that communicate and exchange data 
efficiently today----
    Senator Burr. OK. Mr. Munnecke----
    Mr. Tullman [continuing]. Anywhere else but the U.S. 
Government.
    Senator Burr. What is wrong with two PCs?
    Mr. Munnecke. Excuse me?
    Senator Burr. What is wrong with two PCs?
    Mr. Munnecke. Two PCs, that is basically the architecture 
we used. I was an avid anti-mainframe designer. We thought that 
mainframes were the devils and personal computers and 
microcomputers were the angels. I almost went to work for Apple 
Computer before I started at the VA and was a total fan of 
microcomputers. That was 1977. Mr. Tullman's comments have a 
number of technical issues that I think we need to talk about 
over coffee sometime. Yet, I probably largely agree with his 
conclusions.
    I do not want to be characterized as being pro-MUMPS. I do 
want to be characterized as understanding that we have a very 
successful legacy system that has accomplished a lot, and just 
going with the standards of the information technology industry 
and thinking that we are going to take these shiny new 
technologies and buzzwords on PowerPoint presentations and come 
up with a successful system is not going to work. There are 
tremendous medical informatic needs that need to be dealt with, 
and dealing with them in a way that actually works and is on 
the ground and is working in IHS, DOD, and VA is quite a----
    Senator Burr. I am not sure I have heard anybody describe 
an electronic health component of DOD actually working.
    Mr. Munnecke. CHCS, Composite Health Care System, installed 
in 1986 in all facilities worldwide. We developed it at SAIC. 
That was one of my projects. If you had somebody from DOD here 
that was using CHCS, I think they would have very good things--
--
    Senator Burr. Well, why do they have such a hard time 
building medical records in a fashion that they can actually be 
transferred to VA?
    Mr. Munnecke. I think that you would have to look at DOD 
actually throttling back CHCS and crippling the features that 
were designed into it for communication in order to protect 
their bureaucratic stovepipes. It is not a matter of 
technology. It was not MUMPS. It was the DOD's management of it 
and decision to centralize it and pull it apart and replace it 
with AHLTA.
    Senator Burr. My time has run out, but let me just make one 
observation, if I can. There should be no committee of Congress 
that is trying to determine whether MUMPS is right or wrong, 
but I would say this to the VA: it is absolutely essential, in 
my estimation, that private sector companies buy into what 
technology decisions you make at VA because of exactly what Mr. 
Tullman raised, and that is that this is no longer our 
population of people that we are taking care of. They are 
bouncing back and forth, and that is going to happen for some 
time. As a matter of fact, they bounce back and forth today 
based upon what particular problem they have got and whether 
they want to be seen on the private sector side or whether they 
want to be seen on the VA side. So if we want to reach the 
efficiencies, long-term, of private health care, as most have 
realized, then we have got to have this interoperability 
solved.
    So my observation would be, if a company like Allscripts, a 
leader, is questioning whether they will be able to exchange 
through your system, I think we ought to pause for a minute and 
talk to those companies and find out what their concerns are, 
how we overcome those concerns. There may be aspects that can 
be redesigned that overcome those. If, in fact, we end up at 
the end of the day and the private sector says, we cannot play 
in your world, well, we have got a big problem. The problem is 
we will not get as many efficiencies on the private sector 
side. And I certainly do not think that we will get 
efficiencies that we are going to have to get out of the VA 
side.
    I thank the Chairman.
    Chairman Akaka. Thank you.
    Senator Johanns?
    Senator Johanns. Mr. Chairman, thank you.
    I have to tell you, I am sitting here and it just brings 
back frightful memories. This is enormously expensive. Projects 
get abandoned. Huge costs to the taxpayers. Nothing to show for 
it while this debate goes on. And for us, I have to tell you 
that it is very, very frustrating. But again, I was in your 
position at one time.
    Now, let me offer an observation or two, hopefully with a 
question. One observation I had about IT was that the process 
of creating a system was enormously influenced by a legislative 
process that was not connected at all to the IT requirements. I 
will give you a perfect example. Things would be written into 
the farm bill. They would have a nationwide impact, right down 
to the nuances of an individual farmer, yet the system was not 
able to deal with that.
    So let me just start out and ask you, do you feel that kind 
of influence also at the Veterans Administration, or was that 
unique to USDA?
    Mr. Baker. From my observation, I would say we see it more 
on the benefits side than on the health side. One of the things 
that made the new G.I. Bill Long Term Solution a large-scale 
project was that there were substantial additions that are 
great features from the veterans' standpoint, and we fully 
support them, but they made the software much more complex than 
the software that processed the previous G.I. Bill, the 
previous educational benefits. Recognizing that we are going to 
see continued requests from Congress to enhance what that bill 
does for veterans, we have built it to be as flexible as 
possible. It is not perfect. Our answer is never going to be 
every time, sure, we can do that; no problem. But we have tried 
to build things in that would allow us to give an answer of, 
that will take a month or two versus that will take a year or 
two in----
    Senator Johanns. So let me jump right in here, then, and 
ask another question. And it is OK to be critical of us. I 
mean, we are trying to figure this out. Even though we are your 
oversight, it is still OK to be critical.
    Those policy determinations may be the absolute right 
policy, and I think we can all agree upon that, but is there a 
disconnect in the staff work driving that policy, or our work 
in driving that policy and the impact it has on the VA?
    Mr. Baker. There is an interesting balance in there, and I 
will reflect on----
    Senator Johanns. You are being so diplomatic.
    [Laughter.]
    Mr. Baker. Well, I am trying to give you the answer as I 
see it. I am a private sector person. These systems should not 
take forever to develop. So when the answer comes back to your 
staffers, ``if you do that, it will take 3 years,'' they should 
not listen. At the same time, sometimes you get to the point 
where the answer really is, yes, that is going to take more 
than a year. We wrestled mightily with implementing the Chapter 
33 system and a lot of it was because of the short timeframe to 
get it implemented, and then the fact that it was very popular 
with the folks using it. So we had a relatively poor IT system 
that VBA had to use in that first semester, which we saw the 
impact of. Veterans did not get paid in a timely fashion. With 
another year, we are able to implement the Long Term Solution 
and it is much better.
    Senator Johanns. The other thing I wanted to ask you 
about--it is great to go home and tell people how we improved 
benefits. They are not quite as understanding when we tell them 
that we improved the funding for IT or bureaucrats to run it. 
Are you feeling that tension, also?
    Mr. Baker. Yes. It is certainly, as you point out, for 
example, easier to justify increases in the health accounts 
than in the IT accounts. Yet, as Dr. Petzel would tell you, 
because of how fundamental the VistA system and IT is to 
health, as they open a new facility, as they do new things for 
health, as they do the patient centered medical home, IT is 
fundamental.
    We are constrained in our ability to meet the health 
demands by the fact that we are not tightly tied any longer. We 
have a separate appropriation for IT. We are wrestling with 
that, frankly, inside the VA right now and looking for what we 
can bring forward to Congress from a proposal standpoint that 
would let us address that issue without breaking down what we 
accomplished by centralizing IT management. It is what a 
private sector company would face directly. How do we most 
optimally do these things? Our difference is that instead of 
going to our CEO, we also go to our Board of Directors to do 
those sorts of things.
    Senator Johanns. I will wrap up with this because I am out 
of time, also. One of the things that really, really came home 
to me when I was in your position--and you are serving this 
role now--is you need strong central management. It is just so 
obvious after doing what you are doing for about 3 years. You 
just need the very best person you can have in charge of this.
    The second thing is, there has to be better coordination 
between the policymaking process and what you have to 
implement, because if there is a breakdown there, it can really 
cause serious problems.
    Then, no offense to the private sector, because I agree, 
the private sector plays an important role here, but you have 
to have somebody who can push back, because my experience is 
they love to design the penthouse suite, to use the analogy. 
They are not so excited about designing the basement. And yet 
you have got to build the basement, the floors. It is kind of 
like building an interstate highway system. It is probably not 
the sexiest thing to acquire right-of-way, but guess what; if 
you do not have the right-of-way, you cannot lay the concrete. 
Everybody loves to see the concrete laid down.
    So I think that it is enormously important that somebody 
there is very, very strong and knows their business, so the 
building blocks are there. Even if you do not get to the final 
epitome with that first contract, built a step at a time it 
just seems to go better and the money is better managed. Does 
that make sense?
    Mr. Baker. Absolutely. In software terms, we would call 
that incremental development. Show the customer something as 
quick as you can and get their feedback on whether it is what 
they want or not, and then build further to that. It is the way 
the private sector builds things. Government has traditionally 
done the big bang thing, which is tell me all your 
requirements. I will spend 5 years, I will wrap it up in a bow, 
and I will hand it to you. The problem is it does not account 
for something that we all know is a fact, which is change.
    Senator Johanns. Yes.
    Mr. Baker. This is why so many large-scale government 
projects fail.
    Senator Johanns. Thank you, Mr. Chairman, for your 
patience.
    Chairman Akaka. Thank you, Senator Johanns.
    Senator Brown?
    Senator Brown of Massachusetts. Thank you, Mr. Chairman.
    You know, when I go home, people say, ``Scott, have you 
changed? Have you changed at all?'' And I say, well, yes, I 
have changed, because I have learned a lot doing my job and at 
the Committee hearings. As a matter of fact, I learned that the 
Arlington Cemetery folks are still accounting for all the 
people on index cards. They are using index cards to identify 
where graves are and who is there. They do not have an iPad or 
they do not use computers. Can you believe that? It is amazing 
to me.
    I have learned also that we waste a tremendous amount of 
money beginning programs, putting a few hundred million dollars 
in it, and then just say, oh, that does not work. We will do 
something else. I have learned also that the IT systems in the 
various departments are critical, especially with the changing 
nature of how we communicate worldwide, and I am not opposed to 
providing the tools and resources to update IT. I think it 
makes sense. But I do have a problem when we always--and I know 
I am still somewhat new here--but we put these tremendous 
amounts of money into programs and then we change course 
midstream, and do another one and another one.
    So I guess my question ultimately is, are you satisfied at 
this point that you have the IT system in place to basically do 
your job?
    Mr. Baker. I am going to start by answering that from my 
private sector perspective, which is absolutely not. You know, 
this is a large still government-oriented organization. I am 
pleased with the progress we have made. I very early learned to 
separate our customer support and operations, which are on a 
par with the private sector, from our development, which is far 
behind what a private sector organization would do.
    We are putting in the disciplines in our development 
organization that a private sector organization would expect, 
but frankly, we have nearly 3,000 developers. We spend about 
$800 million a year on development, and while we have started 
to change that organization, we are nowhere close to the level 
of output I would expect from that level of investment.
    We will not have another $100 million ``go off and spend 
money and fail'' program in the VA. Like a private sector 
organization, we are going to have a lot of a few million 
dollar projects, to discover that is not the right program. Let 
us go do something different. We want to do speculative things, 
take some risks, find things that are going to be big wins, and 
stop things early before they turn into big losses. That is the 
way the private sector approaches these things.
    But to come back fundamentally to your question, we are 
trying to get to the point where we can be compared to a good 
private sector organization. We are several years away from 
that at this point still.
    Senator Brown of Massachusetts. Well, considering that, has 
your ability to hire and fire improved at all?
    Mr. Baker. No.
    Senator Brown of Massachusetts. OK. And is there something 
that we can do to help you in that mission? Maybe offline, you 
can let us know so we can streamline and do whatever we need to 
do to give you that authority so you can get your house in 
order.
    Mr. Baker. Senator, I can certainly tell you what, as a CEO 
in the private sector, I had from an authority standpoint.
    Senator Brown of Massachusetts. No, I understand that. I 
am----
    Mr. Baker. I long ago gave up being able to have the 
equivalent in the Federal Government.
    Senator Brown of Massachusetts. All right. Well, maybe we 
can talk about that offline and figure out a way to help you 
get to where you need to be.
    There is obviously an initiative by DOD to find a way to 
save $100 billion. What are you doing to try to save money, as 
well, because the money tree is getting smaller.
    Mr. Baker. I agree. I have been focused since I arrived at 
VA on making certain that the dollars we spend are spent on 
things that are going to benefit veterans, that we are not 
wasting the dollars. We requested no increase from fiscal year 
2010 to fiscal year 2011. We will request no--I am sorry, I am 
not allowed to talk about the President's budget, but I would 
not anticipate the VA requesting an IT increase going into 
2012, as well. My focus is on how we get more out of the 
dollars that we have. We have to deliver more things for the 
veterans, and I want to be careful to make certain that we are 
not cutting back in areas that we should not be cutting back, 
specifically to Senator Burr's comment about the maintenance 
and the operations and the infrastructure. But my main focus is 
on making certain that when we spend a dollar, we have got real 
return for that dollar inside VA.
    Senator Brown of Massachusetts. That is appreciated. As a 
30-year, almost 31-year Guardsman, if somebody is in the Guard 
and they deploy, then get home and decide they want to get out 
of the military, what assurances can you provide that his 
medical records from deployment and home station will be 
transferred to the VA CBOCs 3, 4, or 5 years down the line?
    Mr. Baker. From my understanding of that system, that is a 
great question.
    Senator Brown of Massachusetts. That is why I asked it.
    [Laughter.]
    Mr. Baker. Anything that is electronically generated inside 
the DOD comes to the VA through a system called the Federal 
Health Information Exchange. There is a lot of electronic 
information. I do not know the DOD system well enough to know 
how much of that Guard's information comes over in that system 
and how much of it does not come into that for the VA to see. I 
will be happy to get an answer on that one so that we both get 
a little bit better educated on what does occur and what does 
not occur.
    Senator Brown of Massachusetts. Well, I think it is 
important because you have a tremendous amount of Guardsmen who 
are serving in the One Army concept, doing their time, getting 
out, and getting the appropriate care and treatment. If the 
records are not complete, it is a waste of time and money for a 
whole host of reasons, so thank you. If you could maybe get 
back to me; just call the office. You do not need to send 
anything. Just pick up the phone. It is a ``keep it simple, 
stupid'' type of thing.
    Mr. Baker. OK.
    Senator Brown of Massachusetts. OK?
    Mr. Baker. I appreciate it. Thank you.
    Senator Brown of Massachusetts. Thank you, sir. I 
appreciate it. Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Brown.
    Senator Brown of Massachusetts. I did not mean to say that 
you are stupid. It is the KISS theory, just so----
    Mr. Baker. I love the KISS theory.
    Senator Brown of Massachusetts [continuing]. I am not 
misquoted. I think you are doing a very thorough job. So I just 
want to make sure----
    [Laughter.]
    Mr. Baker. I took it as intended, sir. Thank you.
    Senator Brown of Massachusetts. OK. Thank you.
    Chairman Akaka. Thank you very much, Senator Brown.
    Mr. Baker, with the failure of CoreFLS, the Committee 
learned that the contractor was still paid a bonus due to 
contractual obligations. Are bonuses being used to encourage 
contractor performance, and how are they structured?
    Mr. Baker. To answer the first question, I am certain that 
there still are incentives in our contracts to encourage the 
contractor to do what we want them to do. My experience from 
both the private and the government sector sides are that there 
are frequently cost-plus-incentive fee contracts, and I expect 
that we would use those where appropriate.
    The issue that you frequently see is when a contractor does 
exactly or close to exactly what the contract asks them to do 
and the project still fails for either reasons that they did 
not even contribute to or reasons that were not contemplated in 
the contract, and I think the government has fairly 
traditionally continued to pay those incentive fees when 
contractually required in those.
    It is an interesting dilemma, because, if you will, the 
environment that a program exists in is multiple contractors, 
lots of different government offices, and as we have all seen, 
pinning the blame on who caused the failure inside the 
government programs is almost impossible. There are so many 
people involved, so many people insulate themselves from taking 
charge, that it is perfectly feasible for the contractor to 
say, I did what I told you I would do. I earned my incentive 
payment. Please pay me. Do I like it? No, but it is part of the 
contractual process.
    Chairman Akaka. For our other witnesses, do you have any 
thoughts on bonuses built into these IT contracts? Mr. 
Munnecke?
    Mr. Munnecke. Well, as a VA employee who was demoted for my 
work with VistA, I think there is a lot to be said for aligning 
incentives to support innovation. I would like to focus on 
innovation and giving bonuses for innovation. I guess I would 
like to see innovation tracked as well as costs and budget.
    Chairman Akaka. Ms. Finn, with regard to the recent IG 
report on the G.I. Bill, why is it so important to have an 
independent milestone review in place, and also, does VA's 
solution fit the bill?
    Ms. Finn. We believe the independent review is important 
because it helps people making decisions, like Mr. Baker, have 
a solid understanding of what is going on, separate from just 
the program managers' or the project managers' assertion of how 
things are going. It gets down to the facts of what is 
happening, where the costs are, how much things have cost, and 
what the progress really is.
    The response from the Department was that although this has 
not been accomplished yet through the PMAS oversight process, 
it is planned to be and will be part of future PMAS. That is a 
solution. We are still waiting to see how that works out. We 
are currently working on an audit of the PMAS system to take a 
closer look at the controls and the processes being used to 
oversee system developments. So, hopefully when we finish that, 
we will have better insight as to how well PMAS can fit the 
independent review portion.
    Chairman Akaka. For the other witnesses, should these 
independent reviews be done on some of the other large-scale 
projects, as well?
    Mr. Baker. Senator, I will just point out that one of our 
main philosophies is that we are looking to the customer to 
tell us whether they are getting what they are expecting from 
us, and that is an integral part of PMAS.
    We have, I believe, an exceedingly good relationship with 
our IG folks on the technical side. We get very good 
constructive criticisms from them. It is extremely useful. I 
believe you will find, in general, with the recommendations 
they make to us these days, we are going to concur. We can take 
all the help we can get in making this work well. I appreciate 
the work that Ms. Finn and Mr. Carbone and their folks do for 
us. It helps.
    Chairman Akaka. Any others? Well, my time has expired.
    Senator Burr?
    Senator Burr. I got to thinking as Senator Brown held up 
his iPad. My last trip to Mid-Valley Hospital, as I saw kids 
come in from Landstuhl, I think all of them had their medical 
records taped to their belly. That is why I made the comment I 
did about DOD. I am sure there are some areas that do work. But 
I am also struck by the fact that I think three of our 
witnesses brought their iPads with them. I think that gives us 
a great indication as to how much most of you, if not all of 
you, look at the new technologies available that change the way 
you personally communicate. So I think the challenge, Mr. 
Baker, is to change the culture, not just at VA, I would say 
throughout government, though it may be a bridge too far.
    My hope is that like we see business collaboration with 
academia that did not exist 20 years ago, we now see business 
collaboration with academia is an absolutely crucial component 
to where business chooses to invest capital because it is 
essential to their long-term viability of the business.
    Again, my hope is that VA will collaborate with the private 
sector, not just from a contractual standpoint, but from a 
strategic and tactical standpoint with business, because when 
we both get on the same page, when we both agree with the 
platforms, when the highway goes to the same end place--you may 
have different exits on yours, the private sector may have 
different exits, but where you stop and where you end have to 
be one and the same. I think we will find that we can leverage 
things that we are currently not leveraging in our efforts.
    Let me ask you about skilled staff. I think IT projects are 
a lot about staffing, and I would ask you, what is your 
assessment of the professional competence of the program 
managers within the office who manage these expensive and 
critical IT programs?
    Mr. Baker. Senator, one of the reasons that we have cut 
back on the number of projects that we are doing is because we 
do not have a sufficient amount of project management skills to 
run the number of projects that our customers would like us to 
compete. One of the primary premises of the Program Management 
Accountability System is we are not going to ask a project 
manager to start a project when he or she already knows it is 
going to fail. Those project management skills have proven to 
be where we are weakest, where we have the most trouble hiring, 
and where we compete most directly head-to-head on dollars with 
the private sector. A great project manager is worth every 
penny he or she is paid in what they save you in what they do 
in delivering a project.
    Senator Burr. Do you have all the tools you need to improve 
the competency and the performance of your program managers?
    Mr. Baker. I would never say we have all the tools we need. 
We are doing a lot of training. We are doing a lot of hiring. 
But we need more than 100 good project managers at the VA right 
now. We are able to hire one or two at a time. It is difficult. 
Everybody needs them. And while we have a mission that I 
believe is more communicable than anybody else's, great project 
managers are in high demand in the private sector and in 
government.
    Senator Burr. We currently have an RFP with IBM for the 
Agent Orange claims. What is the amount of that relationship 
with IBM for that project?
    Mr. Baker. I believe that is a firm fixed price at about $9 
million.
    Senator Burr. OK. The first 45-day mark, they missed.
    Mr. Baker. That is correct.
    Senator Burr. You then issued a second, a back-up RFP.
    Mr. Baker. Correct.
    Senator Burr. What is the reason IBM missed it?
    Mr. Baker. From our perspective, I do not believe they 
understood--just being blunt--they did not understand it was 
not ``business as usual'' in the government, that we were 
absolutely committed to making the 45-day mark from the VA's 
standpoint. Anecdotally--I will talk about this because I have 
read it in the press--I believe that they were probably 
surprised on day 46 that a Cabinet Secretary called the CEO and 
said, ``I am concerned.'' That is not government as usual.
    Senator Burr. I agree.
    Mr. Baker. We must process Agent Orange claims when they 
come in and demonstrate that we can do that effectively and 
that we can involve the private sector in doing that. I believe 
with the path IBM is on right now, they will succeed. I can 
assure you they got the message, and they have responded like 
you would expect from one of our Nation's leading technology 
companies.
    We also, however, recognize that in this case, a reasonable 
probability of success may not be enough. We may need to have a 
back-up system that if for any reason they were not to deliver, 
we would have an alternative. We have not yet, to my knowledge, 
let that second RFP, but I believe that the motions that we 
made that were seen in the public probably are interpreted the 
right way, which is we are going to deliver this system.
    Senator Burr. We both know we do not have any choice.
    Mr. Baker. That is right.
    Senator Burr. If we do not, we will have an implosion of 
our claims processing, and I dare say we are close to that 
today anyway, and we both know that.
    The Chairman is being awfully accommodating to me. Let me 
move to Mr. Tullman just real quick, because Allscripts has an 
extensive experience in electronic health services in the 
private sector, and I think you even commented in your 
testimony that you had processed, I think, 3.5 million or 3.5 
trillion claims?
    Mr. Tullman. Million.
    Senator Burr. Million. Well, we are in Washington, so----
    [Laughter.]
    Senator Burr. I wondered if you could talk just a little 
bit about the partnerships Delta Health Alliance and the 
University of Massachusetts have and what lessons you learned 
from that which might assist the VA and DOD efforts in their 
quest for a seamless electronic medical records system.
    Mr. Tullman. I would start off by saying that clearly the 
challenge that the VA has is a larger one than those that we 
will talk about with Delta Health Alliance or with University 
of Massachusetts. That said, the general principle was we were 
not going to put the patient between the interest of various 
bureaucracies that might be involved, and those could be--in 
both cases, we are talking about a variety of competitors 
actually exchanging information based on standards published by 
the government and, in fact, exceeding those standards. So what 
we have set up is an information exchange, private information 
exchanges that are secure. We have asked that each of the 
entities put aside the competitive aspects of what they do and 
look at the patient.
    So I think the biggest message there was we went in with an 
objective that said, we have to exchange basic information 
across these systems. We have not always been able to use 
standard technology, so there we have applied new technologies 
from innovative companies like dbMotion, which allows us to 
essentially do semantic interoperability, which is allowing 
French, German, English all to connect into one virtual patient 
record.
    So net/net, I think it has been both a technology 
accomplishment, and also one, as was mentioned earlier, that 
has to do with the politics of what goes on, because large 
academic medical centers in a variety of other community-based 
organizations do not always want to--it is not a natural act to 
communicate, but it has to be in health care. It is too 
important a problem. And as you mentioned, we cannot have 
especially our young service men and women not have full access 
to the information to allow our physicians to make better 
decisions.
    So we have taken both a technology approach and also a 
political approach in terms of managing that and I think that 
is the same approach that we will need to take in the 
government.
    Senator Burr. Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Burr.
    Mr. Baker, two points about VA's pharmacy program. First, 
medication safety is a priority for VA. Second, VA's pharmacy 
program is renowned for its delivery system. Many pharmacy IT 
solutions are critical, so I have two questions. What is the 
status of the pharmacy reengineering project, and has there 
been any decision to cut funding for this project? And second, 
are you confident that the development for such a program is 
now on the right course?
    Mr. Baker. Senator, let me answer the second question 
first. Yes, I do. Pharmacy reengineering was one of the 45 
projects we originally paused. I have frequently said that if 
you laid the schedule for Replacement Scheduling next to the 
one for Pharmacy and took the names off, you would not have 
been able to tell the difference.
    Pharmacy, as you point out, is critical to us. What this 
application does is enhance our ability to detect drug 
interactions and avoid adverse impact from those drug 
interactions by using, frankly--by giving us access to private 
sector technology that now exceeds what we were able to develop 
inside the VA.
    We right-sized that project and basically forced it to 
start delivering in one hospital. The Charleston, SC, hospital, 
is, I believe, the one where it is operational. It is either 
now or soon to be at more hospitals, basically following the 
same thing that Mr. Munnecke and the VistA developers did in 
the early days. Develop it in one, move it to more to prove out 
what it does, and then distribute it throughout the 
organization.
    From a funding standpoint, I would tell you that I believe 
we have right-sized the program. I know that we spent $10 
million less on it in 2010 than we had planned, but we 
delivered functionality to the schedule we established there. I 
would tell you that my belief as a computer scientist is that 
we could easily have spent that $10 million and gotten nothing 
more than we got out of the programs. I do believe we right-
sized it.
    I do not have the numbers for 2011 for that program right 
off the top of my head, but I believe we have the dollars 
allocated for it to move ahead on a path that will continue its 
success.
    Chairman Akaka. Mr. Baker, with respect to the lifetime 
electronic record, what discussions have taken place among 
members of the Joint Executive Council about the goal of the 
single or shared program that handles DOD and VA electronic 
medical records?
    Mr. Baker. Senator, I would tell you there are extensive 
discussions occurring almost every day on that topic between 
DOD and VA. I know that Deputy Secretary Gould, who is the VA 
Co-Chair along with Deputy Secretary Lynn of the DOD, has had 
discussions on that topic. We clearly would like to achieve 
that if possible, but there are mission differences between the 
DOD and the VA. The DOD right now is working on their 
electronic health record way ahead and I know that our future 
path for VistA is one of the options that they still consider 
to be a possibility. We certainly consider working with the DOD 
on a single record system to be something that we would like to 
do and we would like to figure out a way to do. But clearly, 
both of us must accomplish our missions as the primary goal.
    Chairman Akaka. Mr. Meagher, we have discussed a bit 
already about project management, but project management is a 
key to successful projects. What changes in IT project 
management have you seen within VA? Are these the right 
changes? Are more changes needed?
    Mr. Meagher. Well, sir, I think the primary difference can 
be summed up in leadership and accountability. I think the 
substantiation of the PMAS system that Mr. Baker brought to the 
Department and the formalization of some of the rules of the 
road, these are things that are commonly understood to lead to 
success. So when you say you bring these things, you break the 
projects up into more manageable pieces. You make sure that 
there is a program manager and a business owner associated from 
the very beginning. You make sure the funding is adequate to 
the task. You make sure the milestones are reasonable and that 
they deliver results in our lifetimes so that the technology 
does not change while they are on a 3-5-year plan. You are 
familiar with how quickly technology does change.
    So if you break these into 3- and 6-month increments, you 
make sure you have got the right people, you hold those people 
accountable, and you make--there is the old saying that ``what 
gets measured gets managed''--so you have meaningful measures 
built in from the very beginning. Everyone understands. I think 
the example that you were discussing earlier about IBM, all of 
a sudden, everyone understands that the VA is serious now. They 
are not just mouthing platitudes. There will be consequences if 
you do not deliver according to the agreed-upon schedule.
    Those leadership changes, and then the actual programmatic 
mechanics of it that have been put in place, I think have 
dramatically changed how VA is now capable of delivering. I 
think, as Roger said, you will not see any big failure coming 
out of the VA if they stick to the path they are on today. It 
will not be possible. If there is going to be any failure, it 
will be where they are taking risks, where they are trying 
innovative things. If it comes to pass that this is not within 
the capabilities or the realm of possibilities given current 
circumstances, you shut them down before they become too big to 
fail.
    So I think the leadership and the focus on personal 
accountability, where a program manager knows they will be held 
accountable, their career will be affected if they do not 
deliver on time and on budget--I think is the biggest change--
and having measured my time at the VA against what has happened 
in the last 18 months, I can only applaud the changes that have 
been made.
    Chairman Akaka. For the other witnesses, what can you share 
with us about VA's project management?
    Ms. Finn. I will speak from a bit larger perspective. In 
project management, one of the things I see as positive is that 
when we work now within the Department, we are not arguing with 
OI&T or Mr. Baker and his staff about whether or not an issue 
exists based on the facts that we find. Sometimes we are 
discussing how best to address it, but we do not have 
resistance. So that kind of acceptance of input and information 
is critical to doing good project management.
    Chairman Akaka. Mr. Baker, on a scale of one to ten, what 
degree of confidence do you have that VA will make the December 
31 deadline for the G.I. Bill Long Term Solution and what 
contingency plans are there should that deadline not be met?
    Mr. Baker. Senator, as you can imagine, we watch that one 
closely. I give at least a nine that we will make a delivery by 
December 31. The key question there is the inclusion of the 
financial payments interface in that delivery, and I would tell 
you that I have good confidence in that. Call that a seven-and-
a-half to an eight. I am an experienced software developer. It 
is not going above nine until the customers are using it, as 
far as I am concerned. There are so many moving parts in any 
software development project of this scale that lots of things 
can go wrong. But I believe we have a good degree of confidence 
in what we have seen, in our ability to deliver in that area, 
and the realism of the project at this point.
    Chairman Akaka. In closing, I again want to thank all of 
our witnesses for appearing today. As Chairman, it is my 
responsibility to make certain that this Committee fulfills its 
obligation to conduct oversight of the Department of Veterans 
Affairs. How VA conducts its IT development impacts nearly 
every program and benefit veterans enjoy today. With the 
appropriate technology, management, and attention, I remain 
hopeful that VA will continue to be a leader and innovator in 
the area of health technology.
    I thank you all for participating today. I would also like 
to acknowledge three VA leadership participants, Sylvia 
Tennent, Trenna Carter, and Timothy Graham, in the room today. 
I hope that the skills you have developed will aid you during 
your career at VA, especially those that will assist in 
improving VA's IT program.
    The hearing is now adjourned.
    [Whereupon, at 11:12 a.m., the Committee was adjourned.]
      

                                  
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