Veterans Affairs gets IT House in Order

By John McCormick  |  Posted 2004-04-04

Veterans Affairs gets IT House in Order

Spanning almost two decades, the U.S. Department of Veterans Affairs (VA) pumped almost half a billion dollars into a pair of nearly still-born efforts: one to improve the processing of disability and pension claims filed by former military personnel, and another to share medical records electronically with the U.S. Department of Defense, which has servers that house information on injuries and illnesses soldiers suffer during their tours of duty.

Yet over the past three years, the VA has salvaged both projects.


Project managers halted requests for new claims-system features, ending a time sink they previously had been unable to stop. They dropped their attempt to send data to the Department of Defense (DoD), settling for a more-limited system where VA clinicians could access DoD medical and service histories. In both cases, these project managers began to insist on time-honored software-development practices—such as making sure exact system requirements are nailed down in a reasonable time so that software development isnt dragged out indefinitely.

The VA, which provides health and retirement benefits to retired military personnel, is now able to look online at combat and other medical records held on DoD computers, a practicality that replaces expensive and time-consuming paper requests and answers. Agency officials also have new applications that allow them to review a service record, determine a level of a disability, authorize payment and notify a veteran of a decision—all from their workstations.

This is almost radical stuff for a hidebound bureaucracy. Indeed, what the VA was trying to do, especially in the area of medical-data exchange, "was extremely ambitious, says Robert Kolodner, acting deputy chief information officer for health at the veterans agency,

A lot of work remains. But Defense Department medical histories now can be accessed instantly from VA emergency rooms around the world. The number of claims stacked up waiting to be processed has been cut almost in half from a peak of 420,603 in September 2001.

"There is a better process in place," says Edward Reese, national service director at the Disabled American Veterans (DAV) organization. The DAVs 2.1 million members nationwide count on the VA to supply healthcare, vocational, rehabilitation and employment services, as well as disability payments.

A Long Way Back

A Long Way Back

In January 2001, at his Senate confirmation hearing, incoming Veterans Affairs Secretary Anthony Principi had a harsh assessment of the VAs information-technology efforts. "The VA has absorbed billions of dollars allocated to improving its ability to collect, process and communicate data, he testified. "Frankly, I do not see improvement proportional to the resources consumed."

One of Principis first goals was to cut the backlog of unrated—and, therefore, unprocessed—claims to 250,000. But a lack of discipline was delaying the delivery of the new claims-processing system, which was supposed to ease the paper jam.

"Like a lot of large enterprises, there was no real focused vision of where the organization needed to be," says John Gauss, the VAs chief information officer from 2001 until June of last year.

Principi told Congress that the "lack of focus" and "inadequate management" were killing the claims-processing project. He had history on his side.

The VAs Veterans Benefits Administration embarked on its new claims-processing, -tracking, and -payment system in 1986. Ten years later, the General Accounting Office (GAO) concluded that after "numerous false starts" and an ante of $300 million the VA had little to show for its effort. The GAO castigated the VAs software-development practices as "extremely weak...with no identifiable strengths or improvement activities." Investigators cited a failure to identify the business requirements of the system. Years of delay resulted from confusion over what features and functions actually were needed.

Nevertheless, in 1996, the VA tried again. The new initiative, dubbed the Veterans Service Network, or VetsNet, was expected to take two years and cost $8 million. By mid-2000, despite $100 million spent on VetsNet and related systems, according to the GAO, the project wasnt anywhere near completion.

The GAO said the VA still was inept at defining, and sticking with, the claims processes to be embodied in its software. In fact, Edward Meagher, deputy CIO at the VA, says requirements were allowed to change "on the fly."

By March 2002, the GAO still wasnt seeing results and expressed "uncertainty" about whether VetsNet could be saved. But Principi, a decorated Vietnam veteran, was determined to turn things around. "He said, Were going to fix this," Meagher recalls.

Principi wasnt flying blind. He had held several managerial positions in the private sector, including a stint at Lockheed Martin IMS Corp., a systems-integration specialist that was bought by Affiliated Computer Services in 2001.

Principi brought in Gauss as his CIO; Gauss brought military-like discipline to the project. One of his first moves was to "freeze the requirements, telling all team members to take no additional suggestions on features or functions from users.

"If your requirements change on a daily basis, youre never going to deliver a product," Meagher says.

For instance, in response to suggestions from doctors, administrators and clinicians, the project team had continually fiddled with the number of fields to display in menus on VetsNet screens. The aim: Gather more information on claims and claimants, in each screenful of options. "Nice things," Meagher says. "But theyre changes. Whatever the screens were, they got frozen."

Even changing a single field reverberates throughout the development process, he says. Each revision means the software that touches the revised code needs to be inspected to make sure the rest of the system is not affected in an unexpected way.

The freeze allowed the project team to assess how far away they were from final development of the system. The team then identified the "gaps," wrote whatever software was needed to finish the system and tested the software to make sure all parts of the system worked.

"Its nothing very exciting," Meagher says. But it did get the project back on track.

A Healthy Exchange

A Healthy Exchange

More ambitious was the project to permit the electronic exchange of medical records.

The Veterans Health Administration (VHA), a part of the VA and one of the worlds largest deliverers of medical services, led the effort. Begun in 1998, the goal of its Government Computer-based Patient Record (GCPR) initiative was to build a system allowing physicians and other healthcare workers at 750 VA, 600 DoD and 550 Indian Health Service facilities to share medical records electronically. Indian Health Service is a government agency that provides healthcare to native Americans.

The VHA wanted to share everything from laboratory results to prescription information to radiology reports. "Essentially whatever was there to share," says acting deputy CIO Kolodner.

By August 2000, with $27.8 million spent, the GAO found the project wasnt anywhere near completion.

The projects scope was overwhelming. "What we were trying to do was huge," Kolodner says. Trying to coordinate and respond to the interests of the VA, DoD and Indian Health Services was a tall order. For instance, Kolodner says, each of the agencies had its own business cycles. The VA works its business plans year-by-year, he says, while the DoD works in five-year plans. In addition, the DoD was trying to create a new system for keeping its own medical records, even as it worked on the GCPR project to exchange records with its existing system.

Just like VetsNet, managers of the GCPR initiative failed to adhere to elementary practices. Among the projects deficiencies, according to the GAO: a lack of clear goals; inadequate plans for swapping the data, which each organization kept in different formats; and dubious definitions of how the electronic transfers would take place.

The agencies, for instance, had to figure out how to identify a patient. The DoD used Social Security numbers to keep track of patients. The Indian Health Service used a system that generated unique IDs for each of its patients.

Faced with such conflicts, the projects managers began to think of folding the project. "That was a concern," Kolodner says.

The idea of doing less gradually become more acceptable. The DoD had worked out a system using an emerging healthcare-industry messaging standard called Health Level 7 that would allow it to send medical records to parties that request them. So, in April 2001, DoD and VA information-technology managers okayed the decision to minimize the project to a one-way transmission of data, from the DoD to the VA. The Indian Health Service withdrew from the project altogether.

The scaled-down effort was named the Federal Health Information Exchange (FHIE). The DoD would transmit lab results, pharmacy records, radiology reports and other medical information to the VA, over a virtual private network. The records would be put into a repository that would store information on almost 2 million patients. Through the repository, clinicians would be able to access and display the DoD data, along with VA records.

"It was a decision to say we had to getting something working—in the real world, in production—quickly," says Michael Luby, director of information technology solutions at Northrop Grumman Information Technology, a systems integrator working on both FHIE and VetsNet.

Moving Forward

Moving Forward

With its newfound discipline, the VA has rolled out Share, an application that allows regional offices to open claims files and enter supporting information; Rating Board Automation 2000, which allows VA officials to review service and medical records to determine a vets level of disability; and Award Processing, which allows staffers in regional offices to review files and approve benefit payments.

Principis goal of cutting the backlog of unprocessed claims to 250,000 has almost been met. At the end September 2003 the VA had shrunk the backlog to 253,597. Part of the reason was the VA assigned "tiger teams" of clerical staff to process the oldest claims filed by the oldest veterans. But Meagher says getting this close to the goal would not have been possible without the productivity gains that came with VetsNet.

The VAs health-data exchange network, meanwhile, is proving a lifesaver. VA clinicians anywhere, at any time, can see lab, pharmacy and radiological reports that combine VA and DoD records. This has proven particularly valuable when treating emergency-room patients.

Now, clinicians "make faster and more-informed decisions regarding the care of veterans," said a GAO report last November. Enhanced discipline is even giving the VA more confidence in its ability to size up and tackle new projects. Now in development: a project called HealthePeople, one goal of which is the long-sought two-way exchange of health records with the DoD.

Veterans Affairs Base Case

Veterans Affairs Base Case

Organization: U.S. Department of Veterans Affairs, a cabinet-level agency of the U.S. government.

Headquarters: 810 Vermont Avenue NW, Washington, D.C. 20420

Phone: (202) 273-5400

Business: To provide American veterans with health and rehabilitation services; employment and educational services; and compensation and benefit payments.

Chief Information Officer: Robert McFarland

Financials: $64 billion budget for 2004 fiscal year; $68 billion requested for 2005 fiscal year.

Challenges: Fully deploy new compensation and pension systems to improve speed and accuracy of claims processing; create two-way, electronic medical-records system with the Department of Defense.

Baseline Goals:

  • Cut backlog in unresolved claims, which reached 420,603 at the end of September 2001, to 250,000 claims.
  • Reduce the time to process a claim, which was 182 days at the end of September 2003, to 100 days.
  • Eliminate the waiting list for vets seeking primary care, from 300,000 in 2001, down to 30,000 earlier this year.

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