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98–436PDF 2005

DEPARTMENT OF VETERANS AFFAIRS ROLE IN

THE FUTURE OF ELECTRONIC HEALTH RECORDS

HEARING

BEFORE THE

SUBCOMMITTEE OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MAY 19, 2004

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 108–42

(
COMMITTEE ON VETERANS’ AFFAIRS 

CHRISTOPHER H. SMITH, New Jersey, Chairman 

MICHAEL BILIRAKIS, Florida 

TERRY EVERETT, Alabama 

STEVE BUYER, Indiana 

JACK QUINN, New York 

CLIFF STEARNS, Florida 

JERRY MORAN, Kansas 

RICHARD H. BAKER, Louisiana 

ROB SIMMONS, Connecticut 

HENRY E. BROWN, JR., South Carolina 

JEFF MILLER, Florida 

JOHN BOOZMAN, Arkansas 

JEB BRADLEY, New Hampshire 

BOB BEAUPREZ, Colorado 

GINNY BROWN-WAITE, Florida 

RICK RENZI, Arizona 

TIM MURPHY, Pennsylvania 

LANE EVANS, Illinois 

BOB FILNER, California 

LUIS V. GUTIERREZ, Illinois 

CORRINE BROWN, Florida 

VIC SNYDER, Arkansas 

CIRO D. RODRIGUEZ, Texas 

MICHAEL H. MICHAUD, Maine 

DARLENE HOOLEY, Oregon 

TED STRICKLAND, Ohio 

SHELLEY BERKLEY, Nevada 

TOM UDALL, New Mexico 

SUSAN A. DAVIS, California 

TIM RYAN, Ohio 

STEPHANIE HERSETH, South Dakota

PATRICK E. RYAN, Chief Counsel and Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

STEPHEN E. BUYER, Indiana, Chairman 

MICHAEL BILIRAKIS, Florida 

TERRY EVERETT, Alabama 

JOHN BOOZMAN, Arkansas 

DARLENE HOOLEY, Oregon 

LANE EVANS, Illinois 

BOB FILNER, California 

TOM UDALL, New Mexico

(II) 
(III)

C O N T E N T S 

May 19, 2004

Page

Department of Veterans Affairs Role in the Future of Electronic Health 

Records .................................................................................................................. 1

OPENING STATEMENTS 

Chairman Buyer ...................................................................................................... 1

Prepared statement of Chairman Buyer ........................................................ 33

Hon. Darlene Hooley ............................................................................................... 2

WITNESSES 

Javitt, Jonathan C., M.D, MPH, Senior Fellow, Potomac Institute for Policy 

Studies, Member, Subcommittee on Health Care Delivery and IT, President’s Information Technology Advisory Committee ......................................... 4

Prepared statement of Dr. Javitt .................................................................... 35

Koontz, Linda, Director, Information Management Issues, U.S. General Accounting Office; accompanied by: Valerie C. Melvin, Assistant Director, 

Information Management Issues, U.S. General Accounting Office .................. 12

Prepared statement of Ms. Koontz .................................................................. 41

Perlin, Jonathan B., M.D, Ph.D., MSHA, FACP, Acting Under Secretary 

for Health, Veterans Health Administration, Department of Veterans Affairs; accompanied by: Robert M. Kolodner, M.D, Acting Chief Information 

Officer for Health, Veterans Health Administration; and Robert E. Lynch, 

M.D, Director, South Central VA Health Care Network (VISN 16), Veterans 

Health Administration ......................................................................................... 13

Prepared statement of Dr. Perlin .................................................................... 55

Reardon, James C., MS., Chief Information Officer for Military Health System, Department of Defense; accompanied by: LTC Bart Harmon, Deputy 

Director of Information Management ................................................................. 18

Prepared statement of Mr. Reardon ............................................................... 67

MATERIAL SUBMITTED FOR THE RECORD 

Written committee questions and their responses: 

Chairman Buyer to Department of Defense ................................................... 75

(1)

DEPARTMENT OF VETERANS AFFAIRS ROLE 

IN THE FUTURE OF ELECTRONIC HEALTH 

RECORDS 

WEDNESDAY, MAY 19, 2004

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, DC 

The subcommittee met, pursuant to call, at 10:05 a.m., in room 

334, Cannon House Office Building, Hon. Steve Buyer (chairman of 

the subcommittee) presiding. 

Present: Representatives Buyer, Boozman, and Hooley. 

OPENING STATEMENT OF CHAIRMAN BUYER 

Mr. BUYER. The Subcommittee on Oversight and Investigations, 

the Committee on Veterans’ Affairs, will come to order. Today’s 

hearing is the VA’s role in the development of interoperable electronic medical record systems in the Federal Government. During 

a recent visit at the Baltimore Veterans Medical Center, President 

Bush said, quote, ‘‘the 21st century health care system is using a 

19th century paperwork system,’’’ end quote. He went on to say, 

quote, ‘‘These old methods of keeping records are real threats to 

the patients and their safety and are incredibly costly,’’ end quote. The President has proposed $100 million for 2005 for demonstration projects of IT health care. While this subcommittee has held 

numerous hearings on the importance of moving toward electronic 

medical records, today’s hearing will bring a new element into the 

discussion. I am referring to the potential savings in health care 

costs that can be realized by moving from paper records to electronic medical records. 

According to Dr. Blackford Middleton, chairman of the Center for 

Information Technology Leadership, and I quote, ‘‘Standardized information exchange would save the Nation $86.8 billion each year. 

Clearly, we must accelerate efforts to focus national policy discussions on implementing standardized health care information exchange and interoperability,’’ end quote. Dr. Middleton made this 

statement before the Health Care Information Management Systems Society on February 23, 2004. In fact, we asked Dr. Middleton 

to be a witness at this morning’s hearing. Unfortunately, he was 

unable to do so, but indicated he would be happy to testify at a 

later date. Dr. Middleton’s statement is a fitting introduction to today’s hearing and the important steps that have already been 

taken to standardize health information. 
2

The VA has played a pivotal role in laying the ground work for 

setting health information standards to be used across the government. Over the last 2 years the VA has worked with the Departments of Defense and Health and Human Services to build upon 

the five standards that were announced by HHS on March 21, 

2003. More recently on May 6, 2004, the Departments of Defense, 

Veterans Affairs and Health and Human Services announced the 

adoption of 15 additional standards agreed upon by the Consolidated Health Information Initiative, which is an integral part of 

the e-Gov initiatives of the administration. Dr. Jonathan Javitt, a 

member of the Subcommittee on Health Care Delivery and IT of 

the President’s Information Technology Advisory Committee is our 

lead witness today. I am sure we all look forward to hearing his 

perspective in his role as a member of the President’s health IT 

team. 

Today’s hearing will also focus on the progress that has been 

made by the VA and DOD in their joint effort to develop and deploy electronic medical records that are interoperable, bidirectional, 

and standards-based. According to GAO’s current assessment of the 

top five priorities that still need to be addressed in 2004, I was surprised to learn that the basic fundamental progress of program design such as the development of an architecture for the electronic 

interface that articulate systems requirements, design specifications, and software descriptions have not been agreed upon. I must 

ask a basic question. Shouldn’t these basic functions have been 

identified before the project got underway? 

GAO also cited the need for project milestones and precise performance measures to provide for the basis of comprehensive program management, progressive decision making, and authorization 

of funding for each step in the development process. Again, I think 

this is rather basic. Having a business plan with measurable outcomes should be in place in the front end and not the back end of 

a project. VA and DOD have been working on this initiative since 

1998 without these key elements in place. This does not represent 

good program management. 

So after 6 years and $668.7 million, we have a system that is capable of a one-way transfer of information. I am not sure I would 

categorize this as a great success. I hope you prove me wrong today 

by telling me you have made substantial progress beyond the Federal Health Information Exchange and that the implementation 

date for CHCS II is on target. 

I will close by saying I believe with thousands of service members returning from Iraq and Afghanistan and other places around 

the world, they should not have to endure other battles in order to 

receive timely transition to VA health care and benefits. 

At this moment, I yield to the ranking member for any comments 

she would like to make. 

[The prepared statement of Chairman Buyer appears on p. 33.] 

OPENING STATEMENT OF HON. DARLENE HOOLEY 

Ms. HOOLEY. Thank you, Mr. Chair, and I agree with many of 

your statements. Sweeping national acceptance of electronic health 

records holds great promise for both patient safety and cost savings. The President clearly showed his commitment to this ongoing 
3

initiative when he recently signed an executive order to direct specific actions. The benefits and pitfalls of electronic recordkeeping 

and transfer have been explored for at least a decade. Technology 

has evolved and can be the centerpiece of this pending sea change 

in health care record management. The President’s actions bring 

this excellent concept one step closer to reality. 

The concept itself, however, is not new. Some groundwork for the 

Federal component of this initiative was established in 1996 with 

an executive order. President Clinton called for the Federal Government to create a coordinated approach built on existing structures to make measurable improvements in mission performance 

and service delivery to the public through the strategic application 

of information technology. Out of this general call for Federal IT 

integration and cooperation at the very onset of this modern Internet explosion, the former administration called for practices that 

would protect individuals and enhance government services. There 

were many examples and pilot projects in the private sector regarding electronic medical recordkeeping that has held much promise. 

The VA-DOD Health Resources and Emergency Operation Act of 

1982 continue to provide authority for a myriad of sharing-related 

activities between agencies. 

In the late 1980s and early 1990s, there were several initiatives 

to facilitate electronic health care transactions related to Medicare. 

Many of these initiatives later were signed into law, becoming part 

of the Health Insurance Portability and Accountability Act of 1996, 

or HIPAA. Subtitle (f) of HIPAA is entitled ‘‘Administrative Simplification.’’ It amended the Social Security Act, title IX, by calling 

for development of an electronic system for processing health care 

information consistent with the goal of improving the operation of 

overall health care systems. This and the creation of certain standards for record security was the harbinger of things to come. 

The recent focus takes additional steps to build upon earlier 

guidelines and to establish an executive branch coordinator to facilitate this worthy effort. 

Thank you, Mr. Chair. And I yield back the balance of my time. 

Mr. BUYER. Mr. Boozman. 

Mr. BOOZMAN. I don’t have an opening statement. I appreciate 

you and the ranking member, though, having this hearing, and the 

staff. I think it is a very, very important subject that we need to 

devote a lot of time to. 

Mr. BUYER. By way of a procedure, Ms. Koontz, unless you have 

an objection, what I prefer to do is take Panel II and Panel III and 

combine them. It will be more efficient with our time. And if there 

are any cross questions, we can handle it all at once with VA and 

DOD. Is that fine with you? 

Our first witness is Jonathan C. Javitt. He is a senior fellow at 

the Potomac Institute for Policy Studies, a member of the Subcommittee on Health Care Delivery and IT, the President’s Information Technology Advisory Committee. We will operate under the 

5-minute rule. If you have a written statement—— Dr. JAVITT. My written statement has been submitted. 

Mr. BUYER. It will be submitted for the record. Hearing no objection, so ordered. 

Mr. BUYER. You are now recognized for your comments. 
4

Dr. JAVITT. And Mr. Wu had asked me to prepare 10 minutes of 

verbal comments in his letter, if that is okay with you. 

Mr. BUYER. If Mr. Wu said so, I suppose we should. I will change 

seats with you, Mr. Wu. I will yield to the direction of Mr. Wu. 

Mr. BUYER. You are recognized for 10 minutes. 

STATEMENT OF JONATHAN C. JAVITT, M.D, MPH, SENIOR FELLOW, POTOMAC INSTITUTE FOR POLICY STUDIES, MEMBER, 

SUBCOMMITTEE ON HEALTH CARE DELIVERY AND IT, 

PRESIDENT’S INFORMATION TECHNOLOGY ADVISORY COMMITTEE 

Dr. JAVITT. Mr. Chairman, members of the committee, distinguished staff and guests, thank you for inviting me to testify before 

you today. My name is Jonathan Javitt. I am a physician who has 

been active in pioneering applications of medical records since 

1982. It has been my honor to chair the Health Subcommittee of 

PITAC, the President’s Information Technology Advisory Committee, which is a bipartisan panel of experts that serves the Executive Office of the President and was established by the High Performance Computing Act of 1991 as amended by the Next Generation Internet Research Act of 1998 and subsequent executive orders. 

By way of disclosure, although I serve under a Presidential commission and I am appointed as a special government employee of 

the Under Secretary of Defense, as Congress ordered, I asked to 

serve without compensation. 

As you know, PITAC operates under the Federal Advisory Committee Act and therefore is in the process of finalizing its report to 

the President on transforming health care through information 

technology. Although the draft recommendations of this report 

have been presented in their public meeting and posted to our Web 

site, they will not be formally adopted until our next public meeting. Therefore, any testimony I give before you today, while consistent with those recommendations, is based on my own experience and observation and is not the formal recommendation of 

PITAC. 

You have asked me to provide you with testimony on potential 

savings associated with electronic medical records both in human 

and economic terms. In short, the answer is that we know the savings are there, but those savings have not been consistently measured in a manner that can be used to score Federal initiatives to 

computerize our health care system under the budgetary rules 

agreed to by the executive and legislative branches of our government. I have spent sufficient time talking to leaders within the 

Congressional Budget Office, the Office of Management and Budget 

and the President’s Council of Economic Advisors to be certain in 

this testimony. Moreover, it is my belief that agencies and programs under the direct purview of this committee have the potential to provide us with critically needed information on this subject 

that will inform future public policy in arenas that go far beyond 

the immediate focus of this committee. 

In using the appellation ‘‘electronic medical records’’ or EMR, it 

is critical to distinguish between EMR in isolation or EMR as 

shorthand for electronic health environment that includes not only 
5

the basic recordkeeping system but also computerized order entry 

and decision support tools to prevent medical error within an environment that shares patient data among the caregivers who must 

coordinate the care of a given patient, including those in doctors’ offices and clinics, hospitals, laboratories and pharmacies. An electronic medical record without those features may offer convenience 

and work flow advantages in the local practice setting, but does not 

inherently improve care or offer the potential to reduce costs of 

care any more than a well-maintained paper chart. 

My experience in this area is both academic and practical, having 

been a founder and developer of commercial enterprises that offer 

electronic medical record systems and computer-aided decision support systems that are now used in the care of millions of Americans. 

I have also had the opportunity to visit and evaluate in considerable detail the electronic health environment of the Veterans’ Health Administration and the Department of Defense. There is no 

question today that a properly constructed e-health environment is 

directly associated with preventing medical error and reducing 

avoidable death and suffering. We all quote the Institute of Medicine’s findings that suggest over 98,000 annual deaths from medical error. It is critical to remember that the errors studied were 

primarily errors of commission rather than errors of omission and 

errors that were committed only in the inpatient setting. Thus the 

IOM may only be talking about the tip of the iceberg. We know 

that one in five laboratory tests is performed in the United States 

because the results of previous tests are not immediately available 

at the point of care when crucial clinical decisions must be made. 

We believe that one in seven hospitalizations occur because critical 

information about patients has not been transmitted from caregiver 

to caregiver. Moreover, we know that one in eight physicians’ orders is not carried out as written when we rely on traditional 

paper-based systems. It is time we stop delivering 21st century 

care using administrative methods that were established when 

Hippocrates entered medical practice more than 2,000 years ago. 

The outstanding work of Drs. Clem McDonald in Indianapolis, 

Blackford Middleton and David Bates in Boston, Brent James in 

Utah, to name just a few of the pioneers in this field, has amply 

demonstrated that errors are prevented, hospital costs are avoided, 

and lives are saved when modern computer technology is added to 

the practice of medicine. There are simply too many bits of information for the human computer, the human mind, to track perfectly, particularly when patients are cared for by multiple doctors. 

Case studies, including those of the Health Information Management Systems Society, document internal savings within health 

care enterprises when electronic health records and attendant technologies are introduced. However, there is broad consensus within 

the health care world that much of the savings associated with 

such investment devolves to the benefit of those who pay for health 

care and to society as a whole rather than to the providers who 

must make the investment. 

Estimates of national savings achievable through the universal 

application of electronic health records and related technology 

range from $80 billion to $350 billion annually. Figures of this 
6

magnitude make inherent sense to executives of other major industry sectors who have seen more than a 30 percent reduction in administrative costs by getting the paper out of their systems. An airline executive recently remarked to me that if Americans can check 

in for 45 percent of their flights over the Internet, why are they 

filling out clipboards in the doctor’s office? A similar reduction in 

the cost of medical care would free up sufficient resources to insure 

every uninsured American lower the cost of care to working families, and pay for our new Medicare prescription drug bill without 

raising taxes, premiums, or user fees. We must recognize that as 

medical technology advances, so too will the clinical costs of care. 

The only place to save substantial cost is through the use of computer technology to simplify the administration of care and reduce 

the occurrence of error. 

The problem is that while we have outstanding cost effectiveness 

data from the hospital perspective, we have almost no data that 

measures savings from the economic perspective of the payer. The 

Veterans’ Administration has some macroeconomic observations 

that suggest they are providing care to twice as many people with 

only 30 percent more money than they were a decade ago. They attribute that in part to their outstanding computerization issue. 

I have recently completed a clinical study on the value of computer-aided decision support from the payer’s perspective together 

with colleagues at Active Health Management, an enterprise that 

gathers simple electronic health information on behalf of nearly 5 

million Americans and alerts physicians to potential opportunities 

to improve care. That study, which covered 40,000 insured residents of a midwestern city, demonstrated an 11 percent reduction 

in hospital admissions and more than 5 percent reduction in overall cost of care. The study is expected to be published shortly. Unfortunately, I know of no other data generated at the level of scientific reliability that we require for other health care investments 

in which the introduction of e-health technologies is associated 

with clear savings to the payer. 

I believe that compelling proof of savings from the payer’s perspective is essential for generating the next level of Federal investment that will be required to computerize our Nation’s health care 

system. For such investment to be made, savings must be scoreable 

within the budget rules established by the executive and legislative 

branches of government. Otherwise, such investment will require 

the raising of additional taxes or expansion of the Federal deficit. 

This is particularly true since government, in one way or another, 

pays for 57 percent of health care in the United States when one 

tabulates the cost of Medicare, Medicaid, the Federal employees’

program, military and veterans’ programs, and the corporate tax 

deductions associated with employer-sponsored health insurance. 

The good news is that if we make the investment, the resulting 

savings are likely to enable us to do with our health care system 

what we know we must do in order to preserve the quality of care 

for all Americans. 

The Veterans’ Administration has not focused on measuring the 

cost effectiveness of its extraordinary investment in electronic 

health records, but with your committee’s encouragement, it could 

team with expert health economists and demonstrate to the entire 
7

country how critical that investment has been and will be in the 

future. This is not a criticism of the VA. Their mission is providing 

for America’s veterans, not doing health economic research. In this 

case, however, their experience is vital to informing much broader 

public policy. I urge you to encourage them to embark on this research and assist them in gathering any required research expertise from other departments in government. 

The U.S. Army has demonstrated some extraordinary health benefits through its HealtheForces program at Walter Reed Army 

Medical Center and other collaborating hospitals. Health economic 

analysis of that work, perhaps in collaboration with expert organizations such as the Agency for Health Care Research and Quality 

and HHS, would likely provide proof of savings that are critically 

needed as we address the question of how to computerize this Nation’s health care system. The potential savings to military and veterans’ health care alone, an area of deep interest to your committee, gives you a compelling interest in the computerization not 

only of care provided by those departments of government but of 

care contracted for in the civilian sector by those departments of 

government. I am confident that if we are able to measure the savings and thus make the investment required to computerize the civilian sector of our health care system, we will secure the viability 

of that system for future generations. 

Thank you very much for inviting me. 

[The prepared statement of Dr. Javitt appears on p. 35.] 

Mr. BUYER. Thank you very much. 

Dr. Blackford Middleton, chairman of the Center for Information 

Technology Leadership, provided the subcommittee with CITL’s estimate on potential savings that could be realized by standardizing 

health care information exchange. This organization estimates that 

the cost savings would be in the neighborhood of $86.6 billion annually. Do you agree this is a fair estimate? 

Dr. JAVITT. If anything, I think Dr. Middleton’s estimate is modest. It is certainly consistent with earlier estimates in the President’s economic reports to Congress. The challenge is that those 

analyses have not been made based on economic studies that really 

separate the savings to the payer from the savings to the delivery 

system. For instance, if you implement a computerized order entry 

system that prevents medical error, and that medical error on average extends hospitalization by 2 days, while under prospective pay, 

that is, you know under CMS rules, that extension of hospitalization cost is generally borne by the hospital. Under private payer 

systems, that extension may be borne by a private insurer. Until 

those different economic savings are disentangled from one another, it is difficult or, more likely, impossible for organizations like 

the Congressional Budget Office or the Office of Management and 

Budget to apply proper scoring to those savings and recognize that 

the investments we will make in health information technology 

have offset in savings in the Federal budget for years to come. 

Mr. BUYER. When I look back on the numerous hearings we have 

held on this issue, I have a strong sense that there is a mixed opinion with regard to the impact of HIPAA as we try to achieve this 

seamless medical record between VA and DOD. Would you care to 

comment? 
8

Dr. JAVITT. HIPAA is certainly a challenge, and partly a challenge because the application of the law is still in evolution. Probably the most important thing to recognize about HIPAA is that 

anything that is done with an individual’s data for his or her benefit is something that HIPAA welcomes. To the extent that people 

consent and ask for their information to be moved from one side 

of care to another, there should be no challenge under HIPAA 

whatsoever. 

Now, it may be that DOD and VA create unique challenges 

under HIPAA and it is an area where either, you know, legislative 

action or specific rulemaking is necessary to say that these things 

are necessary for the interest of the patient, that this transfer of 

data is used only for the benefit of the patient; and HIPAA barriers, whatever barriers they are, simply need to be relaxed. 

Mr. BUYER. I am receptive to your testimony. I think Congress 

will be responsive. I believe the VA committee, along with some of 

our colleagues—I can’t speak for all of them on the Armed Services 

Committee—will believe that as we try to make this a seamless 

health system, it is counterproductive for individuals within the 

bureaucracies to make decisions that would express that the Army 

is one institution, the Air Force is one institution, the Navy and 

Marine Corps is one institution, the DOD is one institution and the 

VA is one institution. That doesn’t seem to fit our overall goal here 

of a soldier transitioning within the government’s health care systems. So I welcome your statement. 

I have heard you talk about HealtheForces. Is that another name 

for CHCS II, or what is that? 

Dr. JAVITT. HealtheForces is an initiative that has grown up 

within the caregivers of several branches of the military—the 

Army, the Navy and the Air Force—and it is worth noting that a 

lot of what we like so much about the VA’s current system is the 

direct result of innovation of frontline caregivers, doctors and 

nurses who saw problems and addressed them. For instance, the 

bar code system that the VA uses for administering medications 

only exists because a VA nurse checked in at a rental car at an airport, saw the rental car waved in with a bar code and said, why 

can’t we use that to make sure medicines are properly administered? 

Well, HealtheForces is an initiative that you can see up at Walter Reed Medical Center. And I should tell you that my wife works 

there as a radiologist, so I have invested a lot in Walter Reed. 

What they have done is built an extraordinary system for the management of people with chronic illness. Extraordinary to the point 

where they have won national awards, which is how I came across 

them. They have won eight different certifications from the Joint 

Commission of Accreditation of Hospitals. And they are demonstrating every single day that they can produce results for people 

with diabetes in terms of lowering their blood sugar, for people 

with cardiac disease in terms of lowering their cholesterol, that are 

unprecedented in the civilian sector. They are doing it by using direct computer interaction not only with doctors, but handing the 

patients computerized boxes to fill out their own information and 

engage the patient. They are showing on a daily basis that fewer 
9

people are going to emergency rooms as a result. So it is exactly 

the kind of initiative that I hope will be encouraged in the future. 

Mr. BUYER. Good. Ms. Hooley, you are now recognized. 

Ms. HOOLEY. I am going to follow up on that question. Thank you 

for that testimony. Is that only at Walter Reed that that is being 

done? 

Dr. JAVITT. I know for a fact that there are complementary initiatives under that HealtheForces umbrella at Madigan, and I have 

talked with the brigadier general who is overseeing that. I have 

heard that there are similar initiatives used in the same body of 

computer code within the Navy and within the Air Force. And even 

more significantly, that technology is being directly transplanted to 

West Virginia in service of chronically underserved populations. 

Ms. HOOLEY. As I am going through your testimony, you talked 

about that you believe that we need compelling proof of savings 

from the payer’s perspective. How do we get compelling proof? 

Dr. JAVITT. One of the treasures in the U.S. Government is the 

Agency for Health Care Research and Quality. We have staff within that agency that are as good as the health economists anywhere 

in the universities. We have brilliant health economists at many of 

our leading universities. Once upon a time, I even got to be one of 

those people. If we were to say this is a priority that has to be 

measured because we cannot prioritize our investments appropriately without measuring it, we will have very important answers within a year or two. 

Ms. HOOLEY. We need to make that. 

Dr. JAVITT. That has to be made, because within the government 

as I see it as an outsider, there is no ready mechanism for the Department of Veterans Affairs or DOD to go over to HHS and say 

let’s measure this together. 

Ms. HOOLEY. What do you think the cost reduction can be when 

electronic health records become an integral part of health care? 

Dr. JAVITT. My personal belief is that 25 percent of the cost of 

care could be saved, enough money to insure every uninsured 

American, enough money to pay for Medicare Part D. 

Ms. HOOLEY. What is the focus of the standardized data entry efforts across the Federal health care system? What is the status of 

standardized data entry efforts across the Federal health care system? You talk about VA. Where are we on standardizing those data 

entries? 

Dr. JAVITT. It is not a question that I have studied in the same 

detail that I have studied some of the other things that I testified 

about this morning. At the same time, my observation is that we 

are well on our way. The very fact that we have committed to doing 

it and that we have made it a priority is a major leap forward compared to where we were even 3 years ago. 

I think it is important to take a look of where we are as a country compared to other countries. I just spent the weekend in Geneva at an international conference where somebody who works directly for Prime Minister Blair basically said, well, we are investing $10 billion to computerize the health care system for 50 million 

English people. What is wrong with you Yanks? The truth is we 

have spent a lot less. And if you take a look at what VA and DOD 

have put together, we have got a computerized health environment 
10

that begins to cover more than 30 million people. And if we can 

leapfrog on that technology—yes, we need standards, but if we can 

respect what we have already done and recognize what an extraordinary national asset it is, far beyond the value that it provides 

just to VA and DOD, we have the potential to demonstrate within 

a year, 2 years, 3 years, that the United States is really leading 

the world in this area. 

Ms. HOOLEY. Another quick question. Privacy, how do we make 

sure that our medical records have some kind of privacy built into 

them? 

Dr. JAVITT. There are a couple of levels to that answer. If you 

take a look at some of the draft findings of PITAC’s report that is 

going to be finalized in the near future, Professor David Staylan 

from MIT has offered some very technical guidance on the privacy 

issue. The most important aspect of privacy is for the patient to 

know that the record is the patient’s record and nobody else’s. 

What they found in the private sector is that the best way to protect patients’ privacy is simply to track who accesses that record 

and to tell the patient who has accessed that record, because when 

the patient says, wait a second, I never heard of that person and 

I don’t know why that person accessed my record, if it turns out 

the access was unauthorized, we have ample disciplinary means to 

address unauthorized access. 

Ms. HOOLEY. Thank you. 

Mr. BUYER. Mr. Boozman. 

Mr. BOOZMAN. How much did you say that England was going 

to spend? 

Dr. JAVITT. England is planning on spending $10 billion to computerize the English national health system from the top down. 

Mr. BOOZMAN. In your opinion, we have the two largest Federal 

bureaucracies. If you took out the turf battle, how long should it 

take this thing where we have a HIPAA-compliant system where 

they talk to each other? 

Dr. JAVITT. Let me separate the question of HIPAA from the 

talking-to-each-other question. On a technical level you could have 

these systems talking to each other within a year and it would be 

the most exciting computer project that was done in the Western 

world. On the HIPAA level, it may be people may need to carefully 

look at the act and look at their needs and come to Congress and 

say, here is what we want to do and we need you to tell us that 

it is okay for us to do that; because if you just have, you know, lawyers whose job it is to protect their departments, continually looking to do so, you may never get to the answer you need. But if we 

focus on the patient’s interests and the fact that it is our job to secure the record for the privacy of the patient, I am sure there is 

a solution that can be achieved. 

Mr. BOOZMAN. You are saying we might need to tweak the act 

a little bit to accomplish the task? 

Dr. JAVITT. It might be tweaking the act or maybe tweaking 

some of the rulemaking that has been done around the act to define VA and DOD as business associates of one another. 

Mr. BOOZMAN. I think you are totally right, and we need to look 

at that, and that is something we can do. If you had a magic wand 

and you could, you know, wave and identify other obstacles, what 
11

are three or four other things that are lurking out there that perhaps we need to do to make this thing happen? 

Dr. JAVITT. One person’s obstacle is another person’s opportunity. 

One of the challenges we see, you know, coming down the road, is 

although CHCS II is focused on the outpatient setting, the DOD 

still needs an inpatient computer system, and the VA happens to 

have a very good one. At the same time, the VA has within its system relied on free-form clinical notes. And it is sometimes difficult 

to extract structured information from those free-form notes. That 

is an area where the Department of Defense has made some considerable investments and has shown some progress. So there is 

really an opportunity for cross-fertilization. 

The third and I think the largest opportunity is in the area of 

management of chronic diseases. Those are the patients with the 

biggest needs. Those are the patients that cost the system the most 

money. And that is where the HealtheForces progress at Walter 

Reed and the other military treatment facilities shows so much 

promise, because if you take a look at the Medicare budget, the single biggest block of expense in Medicare is caring for people with 

chronic illness. Medicare talks about how can we implement disease management programs that will save lives and keep people 

out of the hospital and living longer and will decrease our costs of 

care? Well, it turns out within our military, we have invented some 

powerful tools that are unmatched anywhere in the private sector. 

Mr. BOOZMAN. Thank you. 

Mr. BUYER. Do you have any further questions? 

Dr. Javitt, I would like to thank you for your contributions, not 

only serving on the President’s task force, but I can understand 

why you were a member, and I appreciate the work you put into 

your statement today and your contribution in moving this issue. 

We have been on this issue for numerous years. We are not going 

to get this accomplished overnight. These are very large bureaucracies that we are having to deal with and patience is required. It 

drives me crazy. But it is required to work through these very difficult systems. 

And my only final comment would be, I will look more into the 

HealtheForce initiative out of Walter Reed, because you also, in 

order for that to have been created at Walter Reed, you have some 

bright individuals who lack the patience with regard to bringing 

your system online. And I am willing to take a look at what they 

are doing. So I will have that discussion with Mr. Reardon of the 

next panel, but thank you for your contribution. The country appreciates it. 

The next panel, we have Linda Koontz will come forward, the Director of Information Management Issues, U.S. General Accounting 

Office. And we are going to bring Panel III forward, the Honorable 

Jonathan B. Perlin, Acting Under Secretary for Health, Veterans’

Health Administration, Department of Veterans Affairs; and Mr. 

James C. Reardon, the Chief Information Officer for the Military 

Health System, Department of Defense. 

Mr. BUYER. Ms. Koontz, I will open with you. And if you would, 

please recognize who is accompanying you. 
12

STATEMENT OF LINDA KOONTZ, DIRECTOR, INFORMATION 

MANAGEMENT ISSUES, U.S. GENERAL ACCOUNTING OFFICE; 

ACCOMPANIED BY: VALERIE C. MELVIN, ASSISTANT DIRECTOR, INFORMATION MANAGEMENT ISSUES, U.S. GENERAL 

ACCOUNTING OFFICE 

Ms. KOONTZ. This is Valerie C. Melvin, who is assistant director 

at GAO for this work at VA and DOD on information technology. 

Mr. BUYER. You are now recognized. 

Ms. KOONTZ. Mr. Chairman and members of the subcommittee, 

I am pleased to participate in today’s continuing discussion of electronic health records and the Department of Veterans Affairs and 

Department of Defense’s actions toward developing the capability 

to electronically exchange patient health information. 

In the face of terrorism, related military responses and a general 

call for improved health care delivery, providing readily accessible 

medical data on Active-Duty personnel and veterans is more essential than ever to ensure these individuals receive quality health 

care and assistance in adjudicating any disability claims that they 

might have. The President’s recently announced proclamation to 

provide electronic health records for most Americans within the 

next 10 years further highlights the significance and potential contributions of the Departments’ actions in pointing the way toward 

the delivery of more effective health services. 

Since we testified in March, VA and DOD have been continuing 

with activities to support the sharing of health data. Nonetheless, 

achieving the two-way electronic exchange of patient health information as envisioned in the HealthePeople (Federal) strategy remains far from being realized. Each department is proceeding with 

the development of its own health information system, which are 

critical components for the eventual electronic exchange capability. 

The departments are also proceeding with the essential task of defining data and message standards. 

In addition, a pharmacy prototype initiative begun this past 

March is ongoing. VA and DOD have told us that the prototype is 

an initial step in an incremental approach to defining the architecture and technology needed for the two-way data exchange. However, the Departments lack a strategy explicitly defining this incremental approach and how the prototype will contribute toward determining the technical solution for achieving HealthePeople (Federal). As such, there continues to be no clear vision of how this capability will be achieved and in what time period. 

Compounding the challenge faced by the Departments is that 

they continue to lack a fully established project management structure for the HealthePeople (Federal) initiative. As a result, the relationships between the Departments’ managers are not clearly defined, a lead entity with final decision making authority has not 

been designated, and a coordinated comprehensive project plan 

that articulates the joint initiative’s resource requirements, time 

frames, and respective roles and responsibilities of each Department has not yet been established. 

In discussing the need for these components, VA and DOD program officials stated this week that the Departments have begun 

actions to develop a project plan and to define a management structure for HealthePeople (Federal). However, until these actions are 
13

completed, the progress that VA and DOD has achieved is at risk 

of compromise, as is the assurance that the ultimate goal of a common, exchangeable two-way health record will be reached. 

Given the importance of readily accessible health data for improving the quality of health care and disability claims processing 

for military members and veterans, we currently have a draft report at the Departments for comment, in which we are making a 

series of specific recommendations for addressing the challenges to 

successfully achieving the electronic two-way exchange. 

In summary, Mr. Chairman, VA’s and DOD’s pursuit of various 

initiatives to achieve the electronic sharing of patient health data 

represents an important step toward providing more quality health 

care for Active-Duty military personnel and veterans. Moreover, in 

undertaking HealthePeople (Federal), the Departments have an opportunity to help lead the Nation to a new frontier of health care 

delivery. 

However, the continued absence of an architecture and defined 

technological solution for electronically interfacing their new health 

information systems, coupled with the need for more comprehensive and coordinated management of the projects supporting the 

development of this capability, elevates the uncertainty about how 

VA and DOD intend to achieve this capability and in what time 

frame. We are encouraged by the Departments’ recent representations that they are taking actions to resolve these issues. However, 

until these actions are completed, the Departments will continue to 

lack a convincing stand regarding their approach to and progress 

towards achieving the HealthePeople (Federal) goal, and ultimately, risk jeopardizing the initiative’s overall success. 

That concludes my statement and I will be happy to answer 

questions at the appropriate time. 

[The prepared statement of Ms. Koontz appears on p. 41.] 

Mr. BUYER. Dr. Perlin, will you please recognize who is accompanying you at the table? 

STATEMENT OF JONATHAN B. PERLIN, M.D, Ph.D., MSHA, 

FACP, ACTING UNDER SECRETARY FOR HEALTH, VETERANS 

HEALTH ADMINISTRATION, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY: ROBERT M. KOLODNER, M.D, ACTING CHIEF INFORMATION OFFICER FOR HEALTH, VETERANS HEALTH ADMINISTRATION; AND ROBERT E. LYNCH, 

M.D, DIRECTOR, SOUTH CENTRAL VA HEALTH CARE NETWORK (VISN 16), VETERANS HEALTH ADMINISTRATION 

Dr. PERLIN. Good morning, Mr. Chairman. Thank you for the 

privilege of being here today. I am pleased to recognize Dr. Robert 

Kolodner, VA’s Acting Deputy CIO for Health, and Dr. Robert 

Lynch, Director of Veterans’ Integrated Service Network 16. 

Two weeks ago, President Bush outlined an ambitious plan to ensure that most Americans have electronic health records within 10 

years. At the Baltimore VA, the President noted a range of benefits 

possible for use of information technology including improved 

health care quality and reduced frequency of medical errors. Over 

the past several years VA has worked with Federal, State, and industry partners to broaden the use of information technology and 

health care. His efforts have laid the groundwork for the Presi-
14

dent’s initiative. Electronic health records are appealing for a number of reasons, but the most compelling reason to use information 

technology is that it helps us provide better, safer, more consistent 

and more efficient care for all patients. 

VA, as you heard from Dr. Javitt, is a recognized leader in the 

development and use of electronic health records and other information technology tools. In the mid-1990s, VA embarked on an ambitious effort to coordinate and improve care delivery through implementation of a Computerized Patient Record System, or CPRS. 

CPRS has now been implemented in all VA medical centers and 

providers can access patient information across multiple sites of 

care including inpatient, outpatient, the ICU, the emergency room, 

the OR, long-term care settings and across all clinical disciplines, 

nurses, pharmacists, doctors, et cetera. It provides a single interface to which providers can update a patient’s medical history, submit orders, and review test results and drug prescriptions. Today, 

in fact, against the backdrop of only 8 percent of all orders nationally being entered electronically by the prescriber, 93 percent of 

VA’s orders are entered electronically. 

Sir, I could go on with the statement, but the proverb that a picture is worth a thousand words is, I think, appropos and I would 

like to—(and I spoke with Mr. Wu about using our full 10 minutes)—bring you the actual electronic health records. I am going to 

show you a few screen shots and then the actual health record. 

(Demonstration of VA’s Electronic Health Record begins) 

This is the interface that the provider sees. It has, of course, the 

patient’s name. It is a familiar environment that looks like a chart. 

At the top left are active problems, so it is very easy to know what 

the issues are the patient faces. There are lists of allergies right 

in front of the provider so one is aware of those. In fact, the allergies themselves can be looked at in greater detail. Active medications are there, as are clinical reminders. 

Dr. Javitt mentioned the importance of treating chronic disease, 

and these reminders ensure that evidence-based care provision is 

not left to chance. Recent lab results are available, as are the vital 

signs. If the patient comes in and a nurse checks the patient’s vital 

signs, those are entered. The physician or other care provider 

doesn’t have to reenter those. There are also the visits, recent visits 

that have occurred and also visits that are about to occur. At the 

bottom of the screen are tabs for sections, including: Cover sheet, 

problem list, list of medications, orders, notes, consults, summary, 

labs and reports. This constitute a very familiar chart-like metaphor. 

This is an example of the electronic health reminder. They are 

time-sensitive in the sense that every patient over a particular age 

has to get a flu shot; and sensitive that a year has transpired. They 

are also context-sensitive, it knows that a patient is older, and 

knows that a patient has diabetes. It links, behind the scenes, that 

best evidence with the reminder with one click for the action, with 

natural language documentation generated by that one click. So, 

we increased our rate of vaccination over the last 7 years from 29 

percent to well above the national average of 54 percent, to a national benchmark of 90 percent, supported with the standardized 
15

data to ensure that we measure and hold ourselves accountable for 

that performance. 

We implement the VA-DOD guidelines. I am really proud of the 

work between the two agencies. This is for screening for elevated 

cholesterol. Here it shows the bad cholesterol, the LDL in the okay 

range; it’s 58. Liver functions are okay. Important if you are going 

treat elevated LDL. So for this patient—I would be prompted to 

screen. If I order a lipid panel, it would ‘‘fire up’’ the automatic 

order engine to order the laboratory test. Now all I have to do is 

accept the order. In fact the next time, in a structured note, it actually places the bad cholesterol data. This time it is 145. Not good. 

We could leave treatment to chance, but in point of fact, it actually 

fires up this elevated lipid reminder. And the next time it says, 

DOD/VA recommends goal of less than 100 for people with established disease. Look, it is 145. The LFT, the liver function tests, 

are okay. Do you want to treat? And not just treat; treat with our 

formulary flavor, the evidence-based medication, and one that costs 

the taxpayer less with best effect. With one button click, an automatic engine for computerized provider order entry, reduces errors 

at that critical point, eliminating transcription errors, drug interactions, drug allergy interactions, and accepts the order. 

And in fact, as I mentioned, 94 percent of all such orders in VA 

are electronic. Inpatient medications are delivered to the patient 

with bar coding. Absolutely every medication gets this bar-coded 

label, be it IV or a dose in a blister pack. The nurse, securely 

logged into the system, scans the medication, scans the patient’s 

risk band bar code, assuring that it is the right medication in the 

right dose at the right time, administered to the right person. Anything else triggers an alert. 

What about the outpatients? Well, there are 200 million 30-day 

equivalents, that go to one of seven national consolidated mail-out 

patient pharmacies that have helped us not only achieve near 6 

sigma level of performance (6 sigma is 3.4 failures per million.) 

Most of medicine, like the very proud results on the flu vaccine, is 

operating at 11⁄2 to 2 sigma. This was a failure rate of 7 per million, which is unprecedented. And as you know, we have held our 

pharmacy costs near constant. They have actually been 81⁄2 percent 

up—not annually—cumulatively over 54 months despite more 

medications per person, more ‘‘branded’’ drugs, with advances in 

antipsychotic therapy and diabetic therapy, and higher ingredient 

costs, to increase efficiency with this mechanism. 

Enough of just looking at that. But this is actually the real system. These are real data. The names have been changed to protect 

the patient’s identity. And I will show you two were patients. This 

is an actual chart. If I was seeing this patient in clinic, I might 

look at his blood pressure. We could talk about his blood pressure 

going up. I might have a dialogue as we are looking together at his 

chart and say hey, the weight is up, too. Maybe we have an opportunity! But this patient comes in extremely sick, and in fact I 

might want to look at past notes. And by the way, any note that 

has an icon here has an image associated with it. I might want to 

look at past hospital records, discharge summaries. And, importantly, if this individual had been treated at another VA or we had 

data from DOD, if this patient had been seen at an MTF and sepa-
16

rated, I would be able to access those data through a function that 

I use in the care of patients at Washington VA either from other 

sites in the VA system or from DOD with their data coming across 

through the Federal Health Information Exchange. 

This patient is very, very sick. And in fact he is having a GI 

bleed and I might want to look at his blood level to see how much 

blood he has lost. So I will call up his hematocrit, which tells us 

how much blood he has on board. It shows me the normal ranges 

here. And we can see he has been anemic for a long time. There 

have been some catastrophes in the middles. Probably had a GI 

bleed there, but let’s go in and find out if he had any transfusions 

before. In fact, just blow that chart up and in fact, yes, he did bleed 

down. He was transfused up there, bled down again. Let us make 

a diagnosis. Let us take care of this patient. 

This information would be available to me in the outpatient clinic, the emergency room, importantly to the surgeons who were in 

the OR. By the way, we have the patient’s picture, so I don’t have 

to heartlessly yell hey, Mr. Smith. I can go out and introduce myself and say, Mr. Smith, I am Dr. Perlin; why don’t you come back? 

Or for a patient who is an inpatient who has cognitive impairment, 

we would recognize that patient at all times. 

This patient is very sick, and I will show you what is going on. 

He is having a GI bleed. Sorry for the bloody before-lunch graphic. 

But he has diverticulosis and a bleed. But we already know he is 

bleeding so that doesn’t help us. Let me show you how this diagnosis was actually made. And this is a bleeding study that can be 

seen at my desk, in the emergency room, or, by the way, if I were 

at home, and if this were my patient, and I were being asked to 

comment on this, I might look at the studies that have been done. 

Here’s a bleeding study. And here is the aorta and the blood vessels and the vasculature and I want to look at—this one looks a 

little suspicious, so I might take a closer look and blow that up a 

little bit. And wow, that is really fuzzy there. And in fact that tells 

me with absolute clarity that that is where bleeding is. This bleeding was stopped for this patient by inserting a catheter right there 

and stopping that bleeding. 

I am going to show you one other patient, using one of the newer 

technologies that is available to us. This is Mr. Green—we will call 

him Mr. Green—who comes in with chest pain. And thanks to Dr. 

Fletcher in our audience, we have 20 years of EKGs and all of that 

sort of information; over 15 years’ of pacemaker information. But 

most recently, the cardiologist and cardiac surgeon were working 

together to actually look at this patient. In point of fact, would 

have his cardiac catheterization data. We would have a full cardiac 

catheterization on this patient and we would be able to look at all 

of the images of his blood flow. And I would have this in the emergency room. Importantly, the cardiac catheterization doctors would 

have this and the surgeons would have this information if need be. 

In any event, I want to stop with that aspect of what I showed 

you and return to why we believe this is so critically important. It 

is obvious, I think that you have seen through this short demonstration why this is recognized as one of the Nation’s most sophisticated electronic health record systems. We are absolutely 

committed to the National Health Information Infrastructure, 
17

which recognizes the importance of data and communication standards in developing a comprehensive network of interoperable 

health information systems, in large part based upon the adoption 

of common standards. With updated standards, we may be able to 

exchange health information much more effectively than we do now 

by transferring—copying paper records which are only available to 

one user at a time and only in one location. 

We are instrumental in the formation of the Interagency Consolidated Health Initiative. And we work closely with DOD and HHS 

on related projects which helps to establish Federal interoperability 

standards related to health care. The group has endorsed 20 communications and data standards in areas such as lab, radiology, 

pharmacy encounters, diagnosis and nursing information. VA and 

DOD have in fact developed a joint strategy to ensure development 

of interoperable health records by 2005. 

The joint health record plan provides for the exchange of health 

data and development of the health information infrastructure and 

architectures supported by common data, communications, security 

and software standards in high-performance health information 

systems. It will put us on the path to one virtual health record accessible by authorized users in both agencies. 

The first phase of the plan, the Federal Health Information Exchange project, was deployed in 2002 and that was what I alluded 

to in the remote data view and what I just showed. The next phase 

of electronic health records plan is the joint development and acquisition of interoperable data repositories. In VA, we are developing the health data repository. In DOD, they have the clinical 

data repository and that seamless interoperability comes about 

through the release of something called CHDRs, the joint interoperability of those health data repositories. 

We are working with our colleagues at the Centers for Medicare 

and Medicaid Services to make the benefits of the electronic health 

record available to other providers through the development of 

VistA-Lite, VA’s community version of the VistA system. VistA-Lite 

will be streamlined and enhanced to make it affordable and accessible for outside use. This should be available in November. 

Mr. Chairman, we all have a long way to go in optimizing our 

use of information technology in health care. Electronic health 

records, personal health records, data and communication standards, sophisticated analytical tools, have already been implemented 

in some settings and are maturing quickly. Our challenge is to create a technology infrastructure that will revolutionize health care 

without interfering with the interaction between care providers and 

patients that is at the core of the art of medicine. 

The electronic health record is no longer a novelty. It is accepted 

as a standard tool in the provision of our health care services. Our 

focus is now on moving forward from technical implementation 

issues to those that improve data quality, content standardization, 

and greater interaction with other providers and systems. With the 

expanded use of the electronic health record, we can continue to 

make strides in improving patient safety and quality of care. Additional data and communication standards enable us to exchange 

clinical data with DOD, other Federal agencies and other heath 
18

care partners regardless of which electronic health systems they 

use. 

Our strategy is based on the simple truth that today’s service 

members are tomorrow’s veterans. It is our responsibility to make 

sure that their transition from Active-Duty status to veteran status 

is as seamless as possible. In fact, we have the obligation to assure 

that all the past experiences inform current and future care. And 

we look forward to partnering more effectively with all of our Federal colleagues, but particularly DOD, so that we can provide the 

epidemiology tools to make sure we understand the outcomes and 

how those might affect operational readiness and the ability to 

mitigate risk. 

We look forward to sharing our systems and expertise with partners throughout the entire health care community and to supporting the President’s plan for transforming health care. 

Sir, this concludes my statement and we are pleased to answer 

any questions you might have. Thank you. 

Mr. BUYER. Thank you, Dr. Perlin. 

[The prepared statement of Dr. Perlin appears on p. 55.] 

Mr. BUYER. Mr. Reardon, you are now recognized. Please introduce who you have with you. 

STATEMENT OF JAMES C. REARDON, MS., CHIEF INFORMATION OFFICER FOR MILITARY HEALTH SYSTEM, DEPARTMENT OF DEFENSE; ACCOMPANIED BY: LTC BART HARMON, 

DEPUTY DIRECTOR OF INFORMATION MANAGEMENT 

Mr. REARDON. I would like to introduce Lieutenant Colonel Bart 

Harmon, who is our deputy director of information management. 

He is a practicing physician, sir. 

Mr. Chairman and distinguished members of the committee, I 

would like to thank you for the opportunity to appear before you 

today. With your permission, I would like to submit my written testimony for the record and provide the committee with a brief summary. 

Mr. BUYER. Hearing no objection, shall be ordered. 

Mr. REARDON. The Department of Defense has a long history of 

transforming health care delivery through the use of information 

technology. For more than a decade, DOD has been a national leader in using one of the world’s first and largest computerized physician auto entry systems called the Composite Health Care System. 

DOD recognizes the value of secure and on-demand computerized 

patient information as a substantive way to enhance patient safety 

and the quality of health care delivery. CHCS I reduces patient 

wait time, increases patient access to medical services, and it allows faster and more efficient reporting of diagnostic test results. 

This quantum leap from paper to electronic order entry has permitted DOD health care providers to electronically order laboratory 

tests, retrieve test results, authorize radiology procedures, prescribe medications, and schedule appointments. 

Today, DOD providers e-prescribe greater than 60 million prescriptions and tens of millions of lab tests. Paper prescription pads 

and paper lab orders are, similar to the VA, are a thing of the past. 

CHCS I also provides the backbone for the very successful Pharmacy Data Transaction Service. PDTS maintains a patient medica-
19

tion profile for all DOD beneficiaries worldwide. Through information technology, PDTS compares a beneficiary’s new prescriptions 

against previous prescriptions which are filled through any of the 

points of service in the military health system, whether that be a 

military treatment facility, a retail network pharmacy, or the 

TRICARE mail-order pharmacy. A cutting-edge benefit for beneficiaries and providers alike, PDTS has improved the quality of prescription services and enhanced patient safety by reducing the likelihood of adverse drug interactions and duplicate treatments. 

Each prescription undergoes clinical screening against the patient’s complete medication history before it is dispensed to the 

beneficiary. 

Use of PDTS has resulted in higher-quality medical care based 

on proper medication control, reduction of fraud and abuse, better 

management reporting and control, and, most importantly, increased patient safety. All prescription information transmitted to 

PDTS is encrypted for security and privacy reasons. 

DOD has made significant strides in advancing increased access 

to health information, patient appointments, and contact information for hospitals, clinics, and providers by implementing TRICARE 

Online. TOL is an enterprise wide Internet portal used by DOD 

beneficiaries, providers, and health care managers worldwide. TOL 

links beneficiaries to information on TRICARE services and benefits, as well as providing health resources such as disease management tools, drug interaction checkers, and a personal health journal. 

The Department is currently in the process of fielding the next 

version of the Composite Health Care System, CHCS II, which is 

a Windows-based application that further enhances clinical capabilities and provides a user-friendly interface with improved coding 

and expanded documentation of medical care. It is an enterprise 

wide clinical information system that maintains and provides 

worldwide, secure, on-line access to comprehensive patient records. 

CHCS II is secure, standards-based, and patient centric, for use in 

our garrison medical facilities and our forward-deployed medical 

units. Streamlining and computerizing business processes, CHCS II 

stresses a team-based approach to health care that will improve efficiency in providing timely services to our patients as well as continuity of care, patient safety, and timeliness of diagnoses and 

treatments. 

Over the past year the Department of Defense and Veterans Affairs have launched a new era of departmental collaboration with 

strides towards Federal partnership through a number of initiatives. DOD and VA are lead partners in the Consolidated Health 

Informatics Initiative, one of the 24 initiatives supporting the 

President’s management agenda. The goal of Consolidated Health 

Informatics Initiative is to establish Federal health information 

interoperability standards as a basis for electronic health data 

transfer in the Federal health activities and projects. 

DOD and VA are also leading partners in national standards development organizations, such as the National Council for Prescription Drug Programs, ‘‘X.12,’’ ‘‘CX.12,’’ and the Marco Foundation 

Initiative on Collaborating for Health through a series of development groups and standards groups. 
20

DOD and VA are active partners in the Federal Health Architecture Initiative recently kicked off by HHS. Federal Health Architecture offers an excellent opportunity to build partnership through 

the Nation’s health care environment and the development of an 

integrated health information exchange network. DOD and VA are 

co-leads on the Health Care Delivery—Electronic Health Record 

Work Group for the FHA, which was recently formed in May 2004. 

Mr. Chairman and distinguished members of this committee, the 

Department is committed to collaborative efforts under way between DOD and VA and the HHS, and our shared commitment to 

strong DOD/VA/HHS collaboration places us in the forefront of 

interagency health information-sharing. 

Thank you for the opportunity to testify before your committee, 

Mr. Chairman, on this important issue, and I am pleased to accept 

your questions. 

Mr. BUYER. Thank you, Mr. Reardon. 

[The prepared statement of Mr. Reardon appears on p. 67.] 

Mr. BUYER. Ms. Koontz, GAO’s responses to posthearing questions for our March 17, 2004, hearing stated that VA and DOD 

have spent $668.7 million individually or collectively on their efforts to develop interoperable medical records since 1998. So, what 

do they have to show for that much money? 

Ms. KOONTZ. That is a collective figure. First of all, it includes 

their previous efforts on GCPR, which eventually resulted in the 

one-way data transfer from DOD to VA. It also—part of the money 

went to the development of VA’s new system and to a prototype 

health data repository. It also went to—for DOD’s side—the development of CHCS II and to complete their clinical data repository, 

and also they are in the process of deploying block one of CHCS 

II, which will give them the electronic health records that VA has 

had for some time. 

Mr. BUYER. How have the Departments responded to the concerns in the last 2 months to issues that you raised in your March 

testimony? 

Ms. KOONTZ. In the last 2 weeks, we have shared with VA and 

DOD both our responses to your questions for the record as well 

as the draft report that has specific recommendations about how 

we think they needed to move forward. I think at the outset of 

that, we had some point and counterpoint, not because I think that 

VA and DOD necessarily disagreed with what we were saying in 

concept, but to some extent I think they maintained that they had 

already addressed these issues. We did not agree on that point. 

However, I think in the last maybe week or so, we have had some 

additional communications, and I am having the sense that there 

is a greater responsiveness on the part of both agencies to address 

our recommendations. 

Mr. BUYER. You know, Dr. Brailer has only been on the job for 

48 hours in Health and Human Services. If he were here today, 

how would you advise him regarding the collaborative effort between VA and DOD? What would you say to him? Or, if necessary, 

we will arrange that meeting. 

Ms. KOONTZ. I hope I do get to talk to Dr. Brailer sometime. 

I would advise him first that the experience that we have seen 

thus far with VA and DOD certainly underscores the need for a 
21

disciplined approach and for planning for his own effort that he is 

doing for the President. 

I would also say that VA and DOD have been working to develop 

electronic medical records for some time, and that there are certainly lessons that he can learn from their experience. And in addition, he should take advantage of the expertise that already exists 

in these two agencies because of their experience. 

I would also say that with the right processes and controls in 

place at VA and DOD, I think that the effort that they are planning will inform and advance what Dr. Baylor is trying to do. And 

in that sense, he should closely coordinate with these agencies to 

make sure that these efforts move forward in concert and that they 

complement one another over time. 

Mr. BUYER. Are VA and DOD collaborating with regard to the 

vendors they are using so that they have languages and technology 

that can talk to each other? 

Ms. KOONTZ. I think that had you asked me that question a 

number of months ago, I would have registered concern with the 

level of coordination and collaboration that we were seeing between 

the two Departments. In many cases, when we talked to each Department, they talked very differently about the projects. But I 

think that recently we are seeing some improvement in that degree 

of collaboration. I think we see more direct communication, and I 

think they are moving to a better level of that. 

Mr. BUYER. Are you familiar with the different vendors that are 

out there right now? 

Ms. KOONTZ. No, I am not. 

Mr. BUYER. Well, let me ask that question to both of you, Mr. 

Reardon, and Dr. Perlin. Who are the vendors you are using, or, 

in fact, are you collaborating between the use of the vendors? And 

if so, are there any problems that you are finding, whether with 

the vendors or hardware or software? 

Mr. REARDON. Sir, over the last few months we have actually 

issued a number of joint contracts where the VA and DOD have 

put an RFP on the street, done the evaluation together, and issued 

contracts. We have a couple of companies that we are doing business with, such as Northrop Grumman information technology, 

which is working for both of us in the development of capability 

and also in TMIP. 

Mr. BUYER. Were these sole-source contracts, or were they bid? 

Mr. REARDON. These were competitively acquired, sir. We put 

them out on the street and got bids in. think that the unique aspect of this is that the evaluation teams consisted of both VA and 

DOD members sitting at the table together making the selection 

for the contracting office. 

Mr. BUYER. That is great. 

Dr. PERLIN. To that I would add to your question or change it 

slightly. You asked how we are working on vendors to share the 

same standards. In point of fact, what is so exciting about the current environment is that there seems to be a consolidation around 

standards, and I am pleased to say that our two agencies are helping to drive that. The National Health Information Infrastructure 

really specifies the number of standards that, regardless, of which 
22

vendors we actually end up using or choosing, we end up using the 

same standards so that we can interact together. 

Mr. BUYER. How often do you or the two gentlemen that you 

have with you visit DOD facilities? 

Dr. PERLIN. I am going to Walter Reed next Friday actually to—

—

Mr. BUYER. Well, that is prospective. What have you done in the 

past? 

Dr. PERLIN. I have been to Walter Reed with Colonel Phillips and 

seen that system. I have seen CHCS II, and I am pleased to say 

that Jim Reardon, Nelson Ford and General Peake have joined us 

last week over at VA. Rob and Jim meet biweekly, so we do try to 

keep an eye——

Mr. BUYER. Outside of Walter Reed, where have you been? 

Dr. PERLIN. Personally, not to as many facilities as I should. 

Rob, do you want to talk about your trips? 

Dr. KOLODNER. I have visited out at Tripler, also been at Madigan, been at Beaumont Army, and also at Las Vegas at the Air 

Force facilities. 

Mr. BUYER. Nellis? 

Dr. KOLODNER. Nellis. 

Mr. BUYER. Okay. 

Sir, and what VA facilities have you visited? 

Mr. REARDON. The only facility I have been to, sir, is the Washington-based facility. I haven’t been to any of the other ones. 

Mr. BUYER. How long have you had? You have been in this profession for 28 years, right? 

Mr. REARDON. Yes, sir. Oh, in the past I have visited the VA facility in Philly. 

Mr. BUYER. Okay. 

Mr. REARDON. But I am talking recently, sir. 

Mr. BUYER. Recently? And recent would be defined in the last 5 

years? 

Mr. REARDON. Three years, sir. 

Mr. BUYER. Within the last 3 years. 

Mr. REARDON. Yes, sir. I would like to, if I——

Mr. BUYER. All right. Well, I am not going to beat you up; I am 

just glad you are doing it. It is pretty important that we get out 

there and you are able to see this, and you find out whether or not 

it works with regard to what you want to do. And nothing like getting out and being there and seeing it, feeling it, and sensing it. 

Mr. REARDON. Yes, sir. 

Mr. BUYER. All right. 

Mr. REARDON. Could I——

Mr. BUYER. Yes. 

Mr. REARDON. There was one other item—you asked about the 

contractors, sir. There is one other aspect of that that I think is important. DOD—as an example, just conducted a competitive acquisition for an enterprise wide scheduling capability that we needed 

to replace an existing capability. The VA did not need that capability; they have the capability to a lesser extent. What we have required in the RFP for the winning vendor is to ensure that the winning vendor is interoperable with existing VA outpatient sched-
23

uling. We are also building that into all of our contracts to make 

sure that interoperability is a requirement, and standards-based. 

Mr. BUYER. Dr. Kolodner, if you were out at Tripler—I use it always as an example. I shouldn’t, but I do because it just drives me 

crazy that you could fly a paper airplane from Tripler to the VA, 

yet they have got systems that can’t even talk to each other. And 

I know they are working on it. I think the more I talk about it, 

the more we are going to continue to work on it, because if there 

is anyplace that we can get it done, it is at Tripler. I mean, I really 

believe that. 

Dr. KOLODNER. One of the new activities that Mr. Reardon and 

Dr. Perlin referred to is one that is building on the FHIE. We invested in FHIE. We have the records for the separated service 

members that are now available within 30 seconds or so to our clinicians when they click on that remote data view. And what we 

also saw, that for a relatively small increment of investment, that 

we can add additional functionality and actually have a point-topoint type of sharing. 

So it is not at the corporate level, all of the data from DOD, all 

of the data from VA. We will be getting that with our product in 

the fall of 2005. But, for example, at a joint venture like that at 

Tripler, that we—the VA clinician can click and get the information 

from DOD and from that site; and vice versa, that at DOD they can 

click the information and get it from the VA system. 

We have let a contract for that. We will start that in operation 

in October of this year in a phased rollout and over the next 6 

months after that. And they will be able to get— all of the information that we currently transfer after separation in FHIE we will be 

able to get in real time. And that is the data standards or DSI 

project that we mentioned. 

Mr. BUYER. Who is the contractor? 

Dr. KOLODNER. The contractor for that is Northrop Grumman. It 

is building on what we had contracted with them for the FHIE. 

Mr. BUYER. All right. Thank you. 

Ms. Hooley, you are now recognized. 

Ms. HOOLEY. Thank you, Mr. Chairman. 

Dr. Perlin, I was very impressed with what you were showing us. 

I would like to see lots of other people use that. Are there any 

plans to patent ViSTA Lite so VA can recover some of the costs 

when it is distributed to the private sector? Is there any plans for 

that? 

Dr. PERLIN. Thank you, Ms. Hooley. I don’t personally think I 

can go back to practicing on paper again after using the system. 

Taxpayer dollars developed this, and so we are not at liberty to 

patent this, but we are excited about sharing it. We are excited 

about that because others will develop utilities that will have value 

back to VA and to DOD, and we recapture some of our investment 

that way as people write to these sorts of applications. 

Ms. HOOLEY. Okay. So we can’t use—we use Federal dollars, we 

can’t patent something? 

Dr. PERLIN. Rob, you want to elaborate on elements that might 

be patentable? 

Dr. KOLODNER. We looked at this going back 15 years ago. The 

software is not patentable, at least the type of software we have. 
24

It can be copyrighted, but that is what we are not allowed to do 

with things that are—written by Federal employees, or in the case 

of the way the VA does purchasing on our behalf. But we do make 

it available. It is a software, for example, that Indian Health Service is using. They are using a slightly older version now, and we 

are working closely with them to help them come on to the current 

Vista in the future. And with ViSTA Lite, CMS will make it available through their quality improvement officers out to rural and 

underserved areas. 

Ms. HOOLEY. How soon do you think—any one of you. How soon 

do you think this will be out and really established so that it is 

used throughout medical centers and doctors’ offices throughout the 

United States? 

Dr. KOLODNER. The release of the ViSTA Lite, the modifications 

that meet a broader need, are aimed for November of this year. 

There will be some time before others will then take it and put it 

in. We find that it is 12 to 18 months for a site to prepare and 

begin using it. But the idea is not for everyone to use that particular software, it is simply something that would help some of the 

rural and underserved areas, and would be a stimulus for other 

health care providers to use what is very good commercial software 

that is out there as well. 

Ms. HOOLEY. Do you have some concerns about—again, I am 

going to go back to privacy. Do you have some concerns about that? 

I mean, people more and more are concerned about financial privacy, medical privacy, you know. 

Dr. PERLIN. That is a fair question to ask. But, in fact, what concerns me more is the lack of privacy with paper. People assume 

that because this is electronic that it must be less private. And, in 

fact, a famous study from Harvard about a decade ago, admittedly 

dated by the fact that hospitalizations were 6 days on average, 

showed that the chart was perused by 300 pairs of eyes without 

any record of who looked at it. 

These sorts of systems provide and are built increasingly to provide audit trails of whoever accesses it. And I am pleased to say 

that the security is the same sort that you and I entrust our finances to under ATMs and on-line banking. The way it has been 

developed is that the security applies to the chart. So if one were 

to use a supercomputer to break the code, they would have one 

record, they would have to start all over again for the next record. 

So while I appreciate the concerns, I feel personally more confident about my records being held in this environment than being 

faxed hither and yon. 

Ms. HOOLEY. Are you seeing more and more records as you do 

it in the VA or DOD? Do you outsource your medical recordkeeping? 

Dr. PERLIN. We don’t outsource, we eliminate. In fact, Dr. Lynch 

may want to tell us about saving $600,000 in one hospital alone by 

getting rid of his medical records. And so this is actually the replacement for medical records. 

If you want to elaborate. 

Dr. LYNCH. This is a little bit dated because it is about 5 years 

ago and one of our first facilities to go paperless, meaning nobody 

delivers a paper chart through a clinical encounter. It is all there 
25

electronically, which means that the people that would deliver that 

chart and file all of the paper that flows out of the visit back in 

that chart basically no longer had to do that. It just relates to the 

salary dollars for those individuals. And I think you all know that 

VA is much busier now than it was 5 years ago. 

But at one medical center, which represented about 1 Percent of 

the clinical and economic mass of VHA, the salary savings were 

about $600,000 just to stop moving paper around the building. If 

you scale that up, it would easily be a million dollars at that medical center today, probably more, based on the workload increase. 

That being about 1 percent, you would be looking at about $100 

million in salary dollars for the whole system, which is pretty much 

where we are now. 

We are pretty much moving to paperless across the system, and 

that does not get into all the things Dr. Javitt talked about in 

terms of medical errors, duplicate laboratory testing. That is literally just the logistics of the paper. 

Ms. HOOLEY. Thank you. 

Mr. BUYER. Dr. Perlin, your electronic medical records, CPRS, 

works nationwide, doesn’t it? 

Dr. PERLIN. Yes, sir. 

Mr. BUYER. So if I go to the Walla Walla VA, they can share that 

medical record in Indianapolis? 

Dr. PERLIN. Yes. Right now I would have to use remote data view 

to access the information that is there, and I would receive it in 

text form. As we rehost our system over the next 18 months or so, 

all of it will be totally seamless as if you were at one VA, and that 

really becomes more exciting, because that means all of that information is available chronologically, not just a sort of text dump of 

what occurred. So—do you want me to elaborate on that? 

Mr. BUYER. How is the VA’s CPRS different from DOD’s CHCS 

I and II medical record systems? 

Dr. PERLIN. I am going to turn to the experts on articulating differences. 

Dr. KOLODNER. CPRS is an interface that works across all of the 

settings, inpatient, outpatient, and long-term care. And it is—it 

brings together a variety of the applications so that the doctor can 

look at progress notes and enter them, look at orders and enter 

them, and a variety of radiology reports as well. It is the Windows 

front end to that. So, for example, the underlying system is very 

similar in its architecture to the CHCS system, but we were able 

to put a clinical interface that brought together information from 

the various modules even on the old system, but because of that 

interface, we have our doctors entering their notes and retrieving 

their notes across all settings. We have all of our discharge summaries that have been entered in by being transcribed and signed 

or by being entered directly have been in for the last 10 years. 

CHCS II, I would like to let Mr. Reardon comment on how it 

compares to that. 

Mr. REARDON. CHCS II is a similar product. The requirements 

for CHCS II are built out of our theater requirements, and CHCS 

II is built in such a way that it will operate on a laptop computer 

so that our deployed medical units can take the capability out, with 

the same look and feel as the capability that they are using at one 
26

of our CONUS-based facilities so there is not a training issue. It 

uses a structured documentation approach as opposed to free text. 

The data that is entered into CHCS II is very minable for us to 

be used to conduct population health, to track outbreaks of disease, 

real-time outbreaks of disease, among our troops. It is also based 

that way so that it is able to do the epidemiological analysis that 

would need to be done should we have another problem such as 

Gulf War Syndrome so we can go back and pull that information 

out of the electronic—— Mr. BUYER. There is no such thing. 

Mr. REARDON Right. 

Mr. BUYER. You guys drive me nuts. It is Gulf War illnesses. 

Okay? 

Mr. REARDON. Yes, sir. 

Dr. KOLODNER. The strategy in VA is to take CPRS as it now is 

structured. We have basically refined the interface with clinician 

input in terms of what works across all of the settings. And we are 

going to rewrite that in the—with the new languages and the new 

technology so that, from the clinician’s point of view, there is very 

minor changes as we fundamentally change and restructure our 

systems from being facility-based, which is what they are now, 

which is why we have to use the remote data views to pull data 

from other sites, changing our system to the Healthy Vet ViSTA, 

which is person-based with the repository. 

The interface will look very similar to the clinician, so there is 

not a new learning curve, but it will be much, much more powerful 

because all of the data will be standardized and will be brought to 

them as they see the patient. 

Mr. BUYER. Is the CPRS system an in- and outpatient system? 

Dr. PERLIN. Yes, sir. It extends across all care environments. It 

is seamless to the user, whether you are in the inpatient, ER, or 

the intensive care unit, the operating room, the long-term care hospital. At any possible site work where we have clinicians, they can 

interact with the system. They are modules that are tailored to 

that. But the data transfer occurs across all environments of care, 

inpatient, outpatient, long-term. And it looks the same and operates in all those environments, from Washington city to Washington State. In fact, Dr. Javitt took a PITAC, President’s Information Technology Advisory Committee, team to Washington State. 

They pressed that question exactly. And I am pleased, they were 

pleased, to see 100 percent concordance. 

Mr. BUYER. So when we have a soldier, or a marine that is over 

at Walter Reed, he is now facing a medical discharge, he returns 

to his home VA, can DOD send to the home VA his electronic medical record and x rays necessary to do follow-up health care? Can 

that happen today? 

Dr. KOLODNER. Through FHIE, whatever information is in CHCS 

will move across and be available. And that will be corporately, 

wherever the service member had been seen in DOD. As we testified last time, there is a delay of about 60 to 75 days that has to 

do with the DOD service notification up and knowing that that person is discharged and moving across. 

The project that I mentioned just a few minutes ago will allow 

the person at their home VA—excuse me, the clinician at the home 
27

VA to say, I want data from Walter Reed, and reach over even if 

they were discharged 2 days before, and will provide that information in real time without that 60- to 70-day delay, but it will be 

just from that one site. 

Mr. BUYER. I choose not to quibble. I just want to make sure that 

we are all on the same path. We want just-in-time delivery of 

health service, right? Just in time. 

Dr. PERLIN. I would emphatically endorse that. The ideal is that 

we have access now—I am very appreciative of the ability to stand 

up bringing data over. The ideal is when we can look and operate 

like one seamless operation system with respect to the electronic 

health record. And that is why I am so excited about the health 

data repository and clinical data repository convergence called 

CHDR. 

Mr. BUYER. We are prepared to finance such a thing. I am not 

prepared for the delays and the bureaucracies. I mean, this goes 

across party lines here. We know what it can do and how it can 

set the standard. Plus the purpose of this hearing today is to talk 

about how much money it saves. That is the dynamic scoring. 

Things that we do here in Congress to bring efficiencies, we don’t 

get credit for those things, but we know, in fact, what we are trying 

to achieve. And also, the patient safety and better delivery of 

health care. 

Let me ask this question, Mr. Reardon. How long has DOD been 

trying to deploy CHCS I? 

Mr. REARDON. Well, sir, the first version of CHCS has been out 

for about 10 years now, operating in all of our facilities, DOD hospitals and clinics throughout the world. This is the one that gives 

us the computerized physician order entry, admission, disposition 

transfer, appointing, and all of those capabilities. CHCS II——

Mr. BUYER. Let me get through your testimony. So in 1994, I was 

on this committee in 1994. You were talking about the system in 

the late 1980s. 

Mr. REARDON. Well, sir, I think the system began fielding in the 

late 1980s, and we completed in the 1993/1994 time frame, sir. 

Mr. BUYER. Okay. Thank you. 

Mr. REARDON. CHCS II has been in testing for a year and a half 

and we started to field that across the environment beginning in 

January, January of 2004, sir. 

Mr. BUYER. Do you know what the total investment has been to 

date since inception? 

Mr. REARDON. I don’t. 

Mr. BUYER. Give me a guesstimate. All right. You can do it for 

the record. How is that? 

Mr. REARDON. I will do it for the record. 

[The information follows:] 

Insert Page 70/Lines 1580–81 

Do you know what total investment has been to date 

since inception? 

The estimated DOD investment of CHCS development and 

deployment is $14 billion from FY79 through FY05. 
28

Mr. BUYER. And when you do that, do it also for CHCS II deployment and total investments to date. 

Mr. REARDON. I will, sir. Yes, sir. 

[The information follows:] 

Insert Page 70/Lines 1586–87 

And when you do that, do it also for CHCS II deployment and total investments to date. 

DOD has invested $464 million to date on the development 

and deployment of CHCS II from FY97 through FY03. 

This effort is ongoing. 

Mr. BUYER. In your testimony, you state that DOD has deployed 

to over 500 DOD medical facilities. Can a DOD hospital on the east 

coast transmit medical information to a DOD medical facility on 

the west coast in real-time? 

Mr. REARDON. No, sir. 

Mr. BUYER. And what is your expectation, what is your hope that 

that, in fact, can be done? 

Mr. REARDON. Sir, today the DOD has structured their systems 

where we have regionally-based capability. So in the National Capital region, we have one host, one computer that supports Walter 

Reed, Bethesda, Fort Meade, Malcolm Grow, Fort Belvoir, DeWitt, 

and all of the outlying clinics. We have another one located in San 

Antonio and in the Northwest. We have moved to the Clinical Data 

Repository for that very reason; so we have all of the information 

available in one location on a patient that will be accessible from 

any facility. The fielding schedule to bring that completely up with 

all of the information is 30 months. 

Mr. BUYER. So you would disagree with the witness from the 

first panel who thought this could all be done in 1 year? 

Mr. REARDON. I think, sir, that Dr. Javitt, when he talks about 

bringing our systems together electronically and exchanging information, was referring to a year; and if I am not mistaken, and I 

understood it correctly, that we are talking about doing that in 

roughly 15 or 16 months. That will be a year from October, sir, or 

a year from September. 

Mr. BUYER. What are your obstacles? 

Mr. REARDON. The obstacles now for us are primarily in standing 

up the CDR, training, implementation, and getting all of the users 

up. It is quite a large number of people that we have coming up 

on the system and there a lot of business process reengineering 

that goes along with that. We are working very closely with the 

three medical departments who have responsibility for the fielding 

into their facilities on trying to make that a smooth and streamlined process. 

Mr. BUYER. So we have no obstacles with regard to the private 

sector and what they can offer on to us to achieve our goals, or are 

there? 

Mr. REARDON. We are, with our clinical data repository, we are 

working with Oracle, Hewlett Packard and 3M, who has our health 
29

data dictionary, sir, as well as Integic and SAIC. There is a group 

of prime contractors that we are working with, and it is based primarily on commercial off-the-shelf technology. So I think we are 

working very closely with industry as we move forward in this endeavor. 

Mr. BUYER. I am trying—I want to ask this. I don’t know how—

it may come off right, it may come out awkward. With regard to 

CHCS II and—is anyone in the private sector, whether you are 

aware, any interest in our system? Has somebody ever called you 

and said, I like what you are doing; we ought to do that in the private sector? Or is the private sector helping us build something 

that is unique? 

Mr. REARDON. Well, the private sector is very interested to include health care organizations. We do, have done, a number of 

demonstrations of the capabilities. I think on the health side that 

there is interest in moving to a centralized data repository. Yes, 

sir. We use industry from a technical perspective to help build, operate, and maintain the product. 

Mr. BUYER. Would that be the same for the VA and your CPRS 

system? 

Dr. PERLIN. There is a lot of interest in both public and private 

sector. We have two companies that are actually remarketing the 

public domain portions of our software, and we are pleased to be 

collaborating with the DC Government, sharing our system with 

the DC Department of Public Health to help them organize and improve their care; foreign governments, including American Samoa 

where we have the LBJ Tropical Medicine Hospital; State governments, Washington State, West Virginia; a number of medical 

schools that have expressed interests. Other countries: Internationally, U.K. has taken an interest with their reengineering project; 

Egypt; World Health Organization; Sri Lanka; Germany; Finland; 

Jordan. Mexico is extremely interested on a national level; Australia, among others. 

Mr. BUYER. Very good. 

Mr. Reardon, in DOD’s press release dated May 11, 2004, Dr. 

Winkenwerder states that, quote, ‘‘for more than 10 years we have 

had a computerized physician order entry capability that enables 

our providers to order lab tests and radiology exams and issue prescriptions electronically,’’ end quote. 

After all this time, aren’t you talking about transmitting outpatient information only? 

Mr. REARDON. That is primarily outpatient information, yes, sir. 

Mr. BUYER. Mr. Reardon, in the same press release you state 

that, quote, in January 2004, we began our worldwide rollout of the 

next-generation system CHCS II. It is a secure, scalable, patient/

centric and world-class electronic record, Is what you stated. Then 

how is it that—this is dated—this is your release dated May 11. 

Mr. REARDON. Yes, sir. 

Mr. BUYER. So you send this out on May 11, and then on May 

6th, though, 5 days before this press release that CHCS II was experiencing increasing instability as you added new sites. And on 

the same day as the press release, you had to put a 60-day hold 

on CHCS II because the system became unreliable. I also under-
30

stand the services are balking because it affects their operational 

mission. 

Is this a scalability problem, or would you please comment with 

regard to the press release versus what happened in the interim 

of your system? 

Mr. REARDON. Yes, sir. It may be a scalability issue. The engineers are not sure of that right now. What we do know is that 

after—we had an engineering team on site at the Defense Enterprise Computer Center in Montgomery, which consisted of Oracle, 

Hewlett Packard, Integic and some others, an intensive root cause 

analysis was conducted and one of the areas that they pinpointed 

as an issue, was the Oracle database. Over last weekend, they upgraded to a new version of Oracle, and for the last 3 days now the 

system has been stable. We haven’t had any pauses. 

We don’t believe that that necessarily will correct all of the problem. We have got a team on site, and we are continuing to aggressively manage the situation. 

As we roll the capability out, and as we bring more users on, I 

think that it is possible or even probable that we will run into technical issues as the system grows. The approach that we have tried 

to take, Mr. Chairman, is to make sure that we are on top of the 

problems all the time working hard to rectify those problems when 

they occur quickly. 

So it is a very aggressive management. We work very closely 

with the Service medical departments. We meet with them every 

day on these to review the status and the progress, and identify actions and issues. 

Mr. BUYER. All right. Let me go to this issue out at Walter Reed 

with perhaps a lack of patients and the HealtheForce initiatives. 

What is your take on this? 

Mr. REARDON. I think that the HealtheForces product is a very 

good capability. It is built on our composite health care system. It 

draws a lot of information out of that. I have been over and have 

actually had a couple meetings and demos of the capability. I have 

directed and what I have asked people to do, working with the 

Army medical department is to take a hard look at that capability 

and see how we can take those capabilities and integrate them into 

our existing products. That work is under way right now, sir, to see 

how we can use that very good capability that was developed locally at the desk site, as Dr. Perlin talked about, where most of our 

innovation comes from, and bring that in so that those capabilities 

can be used across the enterprise. 

Mr. BUYER. Okay. 

Mr. REARDON. It is a good capability. 

Mr. BUYER. Colonel, do you have anything you want to share 

with us today? 

Colonel HARMON. Certainly, sir. Along the lines of the 

HealtheForces functions at Walter Reed, that isn’t a new theme for 

us to have local innovation and local sponsorship. We have actually 

picked up capabilities that came out of one of the Services versus 

all three, got those approved as a need across the three Services 

within CHCS II over the history of the project. In fact, when we 

initially were conceptualizing the user interface, we looked at the 

VA system, and the first screen you see, that health history, we un-
31

ashamedly stole that concept from the VA—reused it is probably a 

better term for it. 

The immunization functions within CHCS II were built by the 

Air Force, brought forward, and the requirements and capabilities 

extended so that they meet the needs of all three Services, and we 

rolled them into a corporate product. We have force functions that 

were built at San Antonio, TX, by the Army that had been recently 

integrated as a proof of concept to show an Army physical exam 

profiling function that is specific to the Army based on the patient’s 

Service will display the function or not display it. 

We are actively looking for those kinds of reuse. What we have 

to do, though, is we make sure that as we roll them into the corporate solutions, that they look and walk and talk the same way 

as we scale them down to a laptop in Iraq and Kuwait, because 

when we deploy our physicians with a week’s or 2 weeks’ notice, 

we can’t have them learning all new software in the deployed environment. So sometimes we have some technical issues importing 

those locally developed capabilities to a corporate solution that 

scales down to a laptop in a HMMWV, for example. Those changes 

have to be addressed. 

Also, in terms of monitoring for use of biologic and chemical 

weapons in a deployed environment, we have pushed very hard in 

the outpatient setting for structured documentation to include the 

physical exam findings and the history of present illness findings 

largely for that type of surveillance purpose. We have pushed that 

harder than you will see in many other environments because that 

is a requirement for us and part of our mission. It is not a detraction from any other organizations that they wouldn’t push that 

hard; it is a requirement and a mission need for us to push that 

kind of structure in the outpatient setting. A lot of what happens 

in our area, support, medical companies, is fast-paced outpatient 

care, so we push that pretty hard. 

Mr. BUYER. Earlier, from some earlier hearings we had pretty 

good discussions about the postdeployment questionnaire survey, 

whatever you want to call it, exam. Have you been exploring how 

we can get the postdeployment questionnaire to the VA? 

Mr. REARDON. Yes, sir. We worked with the VA and put a capability together, which was to use our Web portal, but it really 

wasn’t satisfactory to the VA from the business process perspective. 

What we are looking at now and getting technical proposals on will 

be actually moving a copy of all the pre- and posthealth assessments that we have resident in our defense medical surveillance 

system to the VA. 

One of the questions that came up earlier today with Dr. Javitt 

had to do with HIPAA, and technically moving the pre- and postto the VA so that they are available in the database for the doctors 

to look at is a fairly straightforward issue as far as technically. 

What we are working through on HIPAA is whether you can move 

the pre- and post- on individuals who have not separated, or can 

we just do it on separated members? 

If we can do it on members that have not separated, it makes 

it a much more straightforward process for us. If the technical solution can only address those that have separated, then it will take 
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a bit more work. But it is still very doable, but it will take a bit 

more work. 

That issue was actually discussed the day before yesterday with 

me, and of course we have to go to our OGC and lay this out and 

say that we think there is a way we can move it to the VA. But 

the VA can’t look at it until somebody has actually enrolled for 

care. We are working through those details, sir. 

Mr. BUYER. Good. 

Ms. Melvin, do you have any comments you would like to say 

based on everything you have heard? You work intimately on this. 

Ms. MELVIN. No. I will let the record stand. 

Mr. BUYER. All right. Well, I assure you the subcommittee will 

continue to keep its focus on the issue, and we appreciate how 

much work you have done this year, and let us continue moving 

forward. I appreciate your contributions. And thank you, Ms. 

Koontz. This hearing is now concluded. 

[Whereupon, at 11:50 a.m., the subcommittee was adjourned.] 
(33)

A P P E N D I X 

PREPARED STATEMENT OF CHAIRMAN BUYER

Good morning. Today’s hearing is entitled, VA’s Role in the Development of Interoperable Electronic-Medical Records Systems in the Federal Government. During a 

recent visit at the Baltimore Veterans Medical Center, President Bush said: ‘‘The 

21st-century health care system is using a 19th-century paperwork system.’’ He 

went on to say: ‘‘These old methods of keeping records are real threats to patients 

and their safety and are incredibly costly.’’ The President has proposed $100 million 

for 2005 for demonstration projects of IT health care. 

While this Subcommittee has held a number of hearings on the importance of 

moving toward electronic medical records, today’s hearing will bring a new element 

into the discussion. I am referring to the potential savings in health care costs that 

could be realized by moving from paper records to electronic medical records. 

According to Dr. Blackford Middleton, Chairman of the Center for Information 

Technology Leadership, and I quote, ‘‘Standardized information exchange would 

save the nation $86.8 billion each year. Clearly, we must accelerate efforts to focus 

national policy discussions on implementing standardized healthcare information exchange and interoperability.’’ Dr. Blackford made this statement before the 

Healthcare Information Management Systems Society (HIMSS) on February 23, 

2004. In fact, we asked Dr. Middleton to be a witness at this morning’s hearing. 

Unfortunately, he was unable to do so but indicated that he would be happy to testify another time. 

Dr. Middleton’s statement is a fitting introduction to today’s hearing and the important steps that have already been taken to standardize health information. The 

VA has played a pivotal role in laying the groundwork for setting health information 

standards to be used across the government. Over the last two years the VA has 

worked with the Departments of Defense and Health and Human Services to build 

upon the five standards which were announced by HHS on March 21, 2003. More 

recently, on May 6, 2004, the Departments of Defense, Veterans Affairs and HHS 

announced the adoption of 15 additional standards agreed upon by the Consolidated 

Health Informatics Initiative, which is an integral part of the e–Gov Initiatives of 

the Administration. 

Dr. Jonathan Javitt, a member of the Subcommittee on Health Care Delivery and 

IT of the President’s Information Technology Advisory Committee is our lead witness today. I am sure we all look forward to hearing his perspective in his role as 

a member of the President’s health IT team. 

Today’s hearing will also focus on the progress which has been made by the VA 

and DOD in their joint effort to develop and deploy electronic medical records that 

are interoperable, bi-directional and standards-based. According to the GAO’s current assessment of the top five priorities that still need to be addressed in 2004, 

I was surprised to learn that the basic fundamental process of program design such 

as the development of an architecture for the electronic interface that articulates 

system requirements, design specifications, and software descriptions have not been 

agreed upon. I must ask a basic question, Shouldn’t these basic functions have been 

identified before the project got under way? GAO also cited the need for project 

milestones and precise performance measures to provide for the basis of comprehensive program management, progressive decision making, and authorization of funding for each step in the development process. Again, this is rather basic. Having a 

business plan with measurable outcomes should be in place on the front end not 

on the back end of a project. VA and DOD have been working on this initiative since 

1998—without these key elements in place. This does not represent good program 

management. 

So, after 6 years and $668.7 million we have a system that is capable of a oneway transfer of information. I’m not sure I would categorize this as a great success. 
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I hope you prove me wrong today by telling me that you have made substantial 

progress beyond the Federal Health Information Exchange and that the implementation date for CHCS II is on target. I will close by saying that I believe with thousands of service members returning from Iraq and Afghanistan they should not have 

to endure other battles in order to receive timely transition to VA health care and 

benefits.
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WRITTEN COMMITTEE QUESTIONS AND THEIR RESPONSES 

CHAIRMAN BUYER TO DEPARTMENT OF DEFENSE
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