COMPUTER-BASED 

PATIENT RECORDS 

Improved Planning and 

Project Management Are 

Critical to Achieving TwoWay VA–DOD Health Data 

Exchange 

Statement of Linda D. Koontz 

Director, Information Management Issues 

United States General Accounting Office 

GAO Testimony

Before the Subcommittee on Oversight 

and Investigations, Committee on 

Veterans’ Affairs, House of 

Representatives

For Release on Delivery 

Expected at 10:00 a.m. EDT 

Wednesday, May 19, 2004 

GAO-04-811T 
www.gao.gov/cgi-bin/getrpt?GAO-04-811T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda Koontz at 

(202) 512-6240 or koontzl@gao.gov. 

Highlights of GAO-04-811T, testimony

before the Subcommittee on Oversight 

and Investigations, House Committee on 

Veterans' Affairs 

May 19, 2004

COMPUTER-BASED PATIENT RECORDS

Improved Planning and Project 

Management Are Critical to Achieving 

Two-Way VA-DOD Health Data Exchange 

VA and DOD are 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—VA’s HealtheVet VistA 

and DOD’s Composite Health Care System (CHCS) II; these are critical 

components for the eventual electronic data exchange capability. The 

departments are also proceeding with the essential task of defining data and 

message standards that are important for exchanging health information 

between their disparate systems. In addition, a pharmacy data prototype 

initiative begun this past March, which the departments stated is an initial 

step to defining the technology for the two-way data exchange, is ongoing. 

However, VA and DOD have not yet defined an architecture to guide the 

development of the electronic data exchange capability, and lack a strategy 

to explain how the pharmacy 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 is 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 had begun actions to develop a project plan and define the 

management structure for HealthePeople (Federal). In the absence of such 

components, the progress that VA and DOD have achieved is at risk of 

compromise, as is 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 recommendations to 

the Secretaries of Veterans Affairs and Defense for addressing the 

challenges to, and improving the likelihood of successfully achieving the 

electronic two-way exchange of patient health information. 

Providing readily accessible health 

information on veterans and active 

duty military personnel is highly 

essential to ensuring that these 

individuals are given quality health 

care and assistance in adjudicating 

disability claims. Moreover, ready 

access to health information is 

consistent with the President’s 

recently announced intention to 

provide electronic health records 

for most Americans within 10 

years. In an attempt to improve the 

sharing of health information, the 

Departments of Veterans Affairs 

(VA) and Defense (DOD) have been 

working, since 1998, toward the 

ability to exchange electronic 

health records for use by veterans, 

military personnel, and their health 

care providers. 

In testimony before the 

Subcommittee last November and 

again this past March, GAO 

discussed the progress being made 

by the departments in this 

endeavor. While a measure of 

success has been achieved—the 

one-way transfer of health data 

from DOD to VA health care 

facilities—identifying the technical 

solution for a two-way exchange, 

as part of a longer term 

HealthePeople (Federal) initiative, 

has proven elusive. 

At the Subcommittee’s request, 

GAO reported on its continuing 

review of the departments’ 

progress toward this goal of an 

electronic two-way exchange of 

patient health records. 
Page 1 GAO-04-811T 

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’ 

(VA) and Department of Defense’s (DOD) 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 military personnel and 

veterans is more essential than ever to ensuring that these 

individuals receive high-quality health care and assistance in 

adjudicating any disability claims that they may 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 care services. 

For the past 6 years, VA and DOD have been working to achieve an 

electronic medical record and patient health information-sharing 

capability, beginning with a joint project in 1998 to develop a 

government computer-based patient record. As we noted in previous 

testimony,1 the departments have achieved a measure of success in 

sharing data through the one-way transfer of health information 

from DOD to VA health care facilities. However, they have been 

severely challenged in their pursuit of a longer term objective—

providing a virtual medical record based on the two-way exchange 

of patient health care information, as part of their HealthePeople 

(Federal) initiative. This past March, we reported that VA and DOD 

had made little progress in identifying a technological solution for 

achieving a two-way exchange of patient health data and lacked 

discipline in their approach to managing this initiative. 

 1

U.S. General Accounting Office, Computer-Based Patient Records: Sound Planning and 

Project Management Are Needed to Achieve a Two-Way Exchange of VA and DOD Health 

Data, GAO-04-402T (Washington, D.C.: March 17, 2004) and Computer-Based Patient

Records: Short-Term Progress Made, but Much Work Remains to Achieve a Two-Way Data 

Exchange Between VA and DOD Health Systems, GAO-04-271T (Washington, D.C.: 

November 19, 2003). 
Page 2 GAO-04-811T 

At your request, my testimony today will discuss our continuing 

assessment of VA’s and DOD’s progress in realizing the 

HealthePeople (Federal) goal of an electronic patient health record 

and two-way data exchange capability. In conducting this work, we 

reviewed the departments’ documentation describing VA’s and 

DOD’s actions to develop new health information systems and 

determine a strategy for developing a secure, electronic two-way 

data exchange capability, including project schedules, project status 

reports, and conversion and deployment plans. We also reviewed 

documentation identifying the costs that the departments have 

incurred in developing technology to support the sharing of health 

data, including costs associated with achieving the one-way transfer 

of data from DOD to VA health care facilities, and ongoing projects 

to develop new health information systems. We did not audit the 

reported costs, and thus cannot attest to their accuracy or 

completeness. We supplemented our analyses of the agencies’ 

documentation with interviews of VA and DOD officials responsible 

for key decisions and actions on the health data-sharing initiatives. 

We conducted our work in accordance with generally accepted 

government auditing standards, during May of this year. 

Results In Brief 

VA and DOD are proceeding with actions intended to support the 

sharing of health data, but continue to be far from achieving the 

two-way electronic data exchange capability envisioned in the 

HealthePeople (Federal) strategy. The departments are continuing 

to take actions to develop their individual health information 

systems that are critical to exchanging patient health information 

and to define data standards that are essential to the common 

sharing of health information. In addition, department officials 

stated that they are proceeding with a pharmacy data prototype 

initiative, begun in March, to satisfy a mandate of the Bob Stump 

National Defense Authorization Act for Fiscal Year 2003,2

 as an 

 2

P.L. 107-314, sec. 724 (2002). 
Page 3 GAO-04-811T 

initial step toward achieving HealthePeople (Federal). At this stage, 

however, they have not developed a strategy to explain how this 

project will contribute to defining the technological solution for the 

data exchange capability. As such, VA and DOD continue to lack a 

clearly defined architecture and technological solution for 

developing the electronic interface and associated capability for 

exchanging patient health information between their new systems. 

Moreover, the departments remain challenged to articulate a clear 

vision of how this capability will be achieved, and in what time 

frame. 

Further compounding the challenge and uncertainty that VA and 

DOD face is that they continue to lack a fully established project 

management structure for this undertaking. The relationships 

among management entities involved with the HealthePeople 

(Federal) initiative have not been clearly established and the 

departments have not designated a lead entity with final decisionmaking authority for the initiative to ensure that decision making 

and oversight will not be blurred across management entities. In 

addition, while the departments have designated a manager for the 

pharmacy data prototype project that they view as an initial step 

toward defining electronic data exchange technology, they do not 

yet have a comprehensive and coordinated project plan for the 

HealthePeople (Federal) initiative to articulate the time frames, 

resource requirements, and roles and responsibilities of VA and 

DOD officials charged with designing, developing, and implementing 

the electronic interface capability. The departments also have not 

instituted project review milestones and measures that provide a 

basis for comprehensive management, progressive decision making, 

and authorization of funding for each step in the development 

process. In discussing their management of HealthePeople 

(Federal), VA and DOD program officials stated this week that the 

departments had begun developing a project plan and defining the 

management structure for this initiative. 

Absent a comprehensive and coordinated approach to implementing 

and conveying information about HealthePeople (Federal), VA and 

DOD risk compromising their progress and lack assurance that the 

goals of this initiative will be successfully realized. Given the 

importance of readily accessible health data for improving the 
Page 4 GAO-04-811T 

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 

recommendations to the Secretaries of Veterans Affairs and Defense 

for addressing the challenges to and improving the likelihood of 

successfully achieving the electronic two-way exchange of patient 

health information. 

Background 

In 1998, following a Presidential call for VA and DOD to start 

developing a “comprehensive, life-long medical record for each 

service member,” the two departments began a joint course of 

action toward achieving the capability to share patient health 

information for active duty military personnel and veterans.3 As their 

first initiative, undertaken in that year, the Government ComputerBased Patient Record (GCPR) project was envisioned as an 

electronic interface that would allow physicians and other 

authorized users at VA and DOD health facilities to access data from 

any of the other agencies’ health information systems. The interface 

was expected to compile requested patient information in a virtual 

record that could be displayed on a user’s computer screen. 

Our prior reviews of the GCPR project determined that the lack of a 

lead entity, clear mission, and detailed planning to achieve that 

mission made it difficult to monitor progress, identify project risks, 

and develop appropriate contingency plans. Accordingly, reporting 

on this project in April 2001 and again in June 2002,4

 we made 

several recommendations to help strengthen the management and 

 3

Initially, the Indian Health Service (IHS) also was a party to this effort, having been 

included because of its population-based research expertise and its long-standing 

relationship with VA. However, IHS was not included in a later revised strategy for 

electronically sharing patient health information. 

4

U.S. General Accounting Office, Veterans Affairs: Sustained Management Attention Is Key 

to Achieving Information Technology Results, GAO-02-703 (Washington, D.C.: June 12, 

2002) and Computer-Based Patient Records: Better Planning and Oversight By VA, DOD, 

and IHS Would Enhance Health Data Sharing, GAO-01-459 (Washington, D.C.: April 30, 

2001). 
Page 5 GAO-04-811T 

oversight of GCPR. Specifically, in 2001 we recommended that the 

participating agencies (1) designate a lead entity with final decisionmaking authority and establish a clear line of authority for the GCPR 

project, and (2) create comprehensive and coordinated plans that 

included an agreed-upon mission and clear goals, objectives, and 

performance measures, to ensure that the agencies could share 

comprehensive, meaningful, accurate, and secure patient health 

care data. In 2002 we recommended that the participating agencies 

revise the original goals and objectives of the project to align with 

their current strategy, commit the executive support necessary to 

adequately manage the project, and ensure that it followed sound 

project management principles. VA and DOD took specific measures 

in response to our recommendations for enhancing overall 

management and accountability of the project. 

By July 2002, VA and DOD had revised their strategy and had made 

progress toward electronically sharing patient health data. The two 

departments had renamed the project the Federal Health 

Information Exchange (FHIE) program and, consistent with our 

prior recommendation, had finalized a memorandum of agreement 

designating VA as the lead entity for implementing the program. This 

agreement also established FHIE as a joint activity that would allow 

the exchange of health care information in two phases. The first 

phase, completed in mid-July 2002, enabled the one-way transfer of 

data from DOD’s existing health information system (the Composite 

Health Care System) to a separate database that VA clinicians could 

access. A second phase, finalized this past March, completed VA’s 

and DOD’s efforts to add to the base of patient health information 

available to VA clinicians via this one-way sharing capability. 

According to program officials, FHIE is now fully operational and is 

showing positive results by providing a wide range of health care 

information to enable clinicians to make more informed decisions 

regarding the care of veterans and to facilitate processing disability 

claims. The officials stated that the departments have now begun 

leveraging the FHIE infrastructure to achieve interim exchanges of 

health information on a limited basis, using existing health systems 
Page 6 GAO-04-811T 

at joint VA/DOD facilities.5 The departments reported total 

GCPR/FHIE costs of about $85 million through fiscal year 2003. 

The revised strategy also envisioned achieving a longer term, twoway exchange of health information between DOD and VA. Known 

as HealthePeople (Federal), this initiative is premised upon the 

departments’ development of a common health information 

architecture comprising standardized data, communications, 

security, and high-performance health information systems. The 

joint effort is expected to result in the secured sharing of health data 

required by VA’s and DOD’s health care providers between systems 

that each department is currently developing—DOD’s Composite 

Health Care System (CHCS) II and VA’s HealtheVet VistA. 

DOD began developing CHCS II in 1997 and has completed its 

associated clinical data repository—a key component for the 

planned electronic interface. The department expects to complete 

deployment of all of its major system capabilities by September 

2008.6 It reported expenditures of about $464 million for the system 

through fiscal year 2003. VA began work on HealtheVet VistA and its 

associated health data repository in 2001, and expects to complete 

all six initiatives comprising this system in 2012.7 VA reported 

spending about $120 million on HealtheVet VistA through fiscal year 

2003. 

 

 5

VA and DOD officials stated that these efforts were not expected to contribute to 

determining the technological solution for a two-way data exchange between VA’s and 

DOD’s new health information systems but, instead, constituted attempts toward 

facilitating the sharing of health data in the absence of the longer term capabilities that 

HealthePeople (Federal) is expected to provide. 

6

DOD’s CHCS II capabilities are being deployed in blocks. Block 1 provides a graphical user 

interface for clinical outpatient processes; block 2 supports general dentistry; block 3 

provides pharmacy, laboratory, radiology, and immunizations capabilities; block 4 provides 

inpatient and scheduling capabilities; and block 5 will provide additional capabilities as 

defined. 

7

The six initiatives that make up HealtheVet VistA are health data repository, billing 

replacement, laboratory, pharmacy, imaging, and appointment scheduling replacement. 
Page 7 GAO-04-811T 

Under the HealthePeople (Federal) initiative, VA and DOD envision 

that, upon entering military service, a health record for the service 

member will be created and stored in DOD’s CHCS II clinical data 

repository. The record will be updated as the service member 

receives medical care. When the individual separates from active 

duty and, if eligible, seeks medical care at a VA facility, VA will then 

create a medical record for the individual, which will be stored in its 

health data repository. Upon viewing the medical record, the VA 

clinician would be alerted and provided with access to the 

individual’s clinical information residing in DOD’s repository. In the 

same manner, when a veteran seeks medical care at a military 

treatment facility, the attending DOD clinician would be alerted and 

provided with access to the health information in VA’s repository. 

According to the departments, this planned approach would make 

virtual medical records displaying all available patient health 

information from the two repositories accessible to both 

departments’ clinicians. VA officials anticipated being able to 

exchange some degree of health information through an interface of 

their health data repository with DOD’s clinical data repository by 

the end of 2005. 

Progress Toward Achieving HealthePeople (Federal) Faces 

Continued Challenges and Risks 

As we have noted,8

 achieving the longer term capability to exchange 

health data in a secure, two-way electronic format between new 

health information systems that VA and DOD are developing is a 

challenging and complex undertaking, in which success depends on 

having a clearly articulated architecture, or blueprint, defining how 

specific technologies will be used to deliver the capability. 

Developing, maintaining, and using an architecture is a best practice 

in engineering information systems and other technological 

 8

GAO-04-402T.
Page 8 GAO-04-811T 

solutions, articulating, for example, the systems and interface 

requirements, design specifications, and database descriptions for 

the manner in which the departments will electronically store, 

update, and transmit their data. 

Successfully carrying out the initiative also depends on the 

departments’ instituting a highly disciplined approach to the 

project’s management. Industry best practices and information 

technology project management principles stress the importance of 

accountability and sound planning for any project, particularly an 

interagency effort of the magnitude and complexity of this one. Such 

planning involves developing and using a project management plan 

that describes, among other factors, the project’s scope, 

implementation strategy, lines of responsibility, resources, and 

estimated schedules for development and implementation. 

Currently, VA and DOD are proceeding with the development of 

their new health information systems and with the identification of 

standards that are essential to sharing common health data. DOD is 

deploying its first release of CHCS II functionality (a capability for 

integrating DOD clinical outpatient processes into a single patient 

record), with scheduled completion in June 2006. For its part, VA 

continues to work toward completing a prototype for the 

department’s health data repository, scheduled for completion at the 

end of next month. In addition, as we reported in March, the 

departments have continued essential steps toward standardizing 

clinical data, having adopted data and message standards that are 

important for exchanging health information between disparate 

systems.9

 Department officials also stated that they were proceeding 

with a pharmacy data prototype initiative, begun in March to satisfy 

a mandate of the Bob Stump National Defense Authorization Act for 

 9

VA and DOD, along with the Department of Health and Human Services, have been active 

participants in the Consolidated Health Informatics initiative. As part of this initiative, the 

Secretary of Health and Human Services announced in early May the adoption of 15 new 

standards to enable the exchange of health information. 
Page 9 GAO-04-811T 

Fiscal Year 2003, 10 as an initial step toward achieving HealthePeople 

(Federal). The officials maintain that they expect to be positioned to 

begin exchanging patient health information between their new 

systems on a limited basis in the fall of 2005, identifying four 

categories of data that they expect to be able to exchange: 

outpatient pharmacy data, laboratory results, allergies, and patient 

demographics. 

However, VA’s and DOD’s approach to meeting this HealthePeople 

(Federal) goal is fraught with uncertainty and lacks a solid 

foundation for ensuring that this mission can be successfully 

accomplished. As we reported in March, the departments continue 

to lack an architecture detailing how they intend to use technology 

to achieve the two-way electronic data exchange capability. In 

discussing their intentions for developing such an architecture, VA’s 

Deputy Chief Information Officer for Health stated last week that 

the departments do not expect to have an established architecture 

until a future unspecified date. He added that VA and DOD planned 

to take an incremental approach to determining the architecture and 

technological solution for the data exchange capability. He 

explained, for example, that they hope to gain from the pharmacy 

data prototype project an understanding of what technology is 

necessary and how it should be deployed to enable the two-way 

exchange of patient health records between their data repositories. 

VA and DOD reported approval of the contractor’s technical 

requirements for the prototype last month and have a draft 

architecture for the prototype. They expect to complete the 

prototype in mid-September of this year.

Although department officials consider the pharmacy data prototype 

to be an initial step toward achieving HealthePeople (Federal), how 

 10Sec. 724 of the act mandates that the Secretaries of Veterans Affairs and Defense seek to 

ensure that, on or before October 1, 2004, the two departments’ pharmacy data systems are 

interoperable for VA and DOD beneficiaries by achieving real-time interface, data 

exchange, and checking of prescription drug data of outpatients and using national 

standards for the exchange of outpatient medication information. The act further states 

that if the specified interoperability is not achieved by that date, then the Secretary of 

Veterans Affairs shall adopt DOD’s Pharmacy Data Transaction System for VA’s use. 
Page 10 GAO-04-811T 

and to what extent the prototype will contribute to defining the 

electronic interface for a two-way data exchange between VA’s and 

DOD’s new health information systems are unclear. Such 

prototypes, if accomplished successfully, can offer valuable 

contributions to the process of determining the technological 

solution for larger, more encompassing initiatives. However, 

ensuring the effective application of lessons learned from the 

prototype requires that VA and DOD have a well-defined strategy to 

show how this project will be integrated with the HealthePeople 

(Federal) initiative. Yet VA and DOD have not developed a strategy 

to articulate the integration approach, time frames, and resource 

requirements associated with implementing the prototype results to 

define the technological features of the two-way data exchange 

capability under HealthePeople (Federal). Until VA and DOD are 

able to determine the architecture and technological solution for 

achieving a secure electronic systems interface, they will lack 

assurance that the capability to begin electronically exchanging 

patient health information between their new systems in 2005 can 

be successfully accomplished. 

In addition to lacking an explicit architecture and technological 

solution to guide the development of the electronic data exchange 

capability, VA and DOD continue to be challenged in ensuring that 

this undertaking will be managed in a sound, disciplined manner. As 

was the situation in March, VA and DOD continue to lack a fully 

established project management structure for the HealthePeople 

(Federal) initiative. The relationships among the management 

entities involved with the initiative have not been clearly 

established, and no one entity has authority to make final project 

decisions binding on the other. As we noted during the March 

hearing, the departments’ implementation of our recommendation 

that it establish a lead entity for the Government Computer-Based 

Patient Record project helped strengthen the overall accountability 

and management of that project and contributed to its successful 

accomplishment. 

Further, although the departments have designated a project 

manager and established a project plan defining the work tasks and 

management structure for the pharmacy prototype, they continue to 

lack a comprehensive and coordinated project plan for 
Page 11 GAO-04-811T 

HealthePeople (Federal), to explain the technical and managerial 

processes that have been instituted to satisfy project requirements 

for this broader initiative. Such a plan would include, among other 

information, details on the authority and responsibility of each 

organizational unit; the work breakdown structure and schedule for 

all of the tasks to be performed in developing, testing, and deploying 

the electronic interface; as well as a security plan. The departments 

also have not instituted necessary project review milestones and 

measures to provide a basis for comprehensive management of the 

project at critical intervals, progressive decision making, or 

authorization of funding for each step in the development process. 

As a result, current plans for the development of the electronic data 

exchange capability between VA’s and DOD’s new health 

information systems do not offer a clear vision for the project or 

demonstrate sufficient attention to the effective day-to-day guidance 

of and accountability for the investments in and implementation of 

this capability. In discussing their management of HealthePeople 

(Federal), VA and DOD program officials stated this week that the 

departments had begun actions to develop a project plan and define 

the management structure for this initiative. 

Given the significance 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 recommending to 

the Secretaries of Veterans Affairs and Defense, a number of actions 

for addressing the challenges to, and improving the likelihood of, 

successfully achieving the electronic two-way exchange of patient 

health information. 

In summary, 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 high-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 an electronic interface for their new 

health information systems, coupled with the need for more 

comprehensive and coordinated management of the projects 
Page 12 GAO-04-811T 

supporting the development of this capability, elevates the 

uncertainty about how VA and DOD intend to achieve this capability 

and in what time frame. Until these critical components have been 

put into place, the departments will continue to lack a convincing 

position regarding their approach to and progress toward achieving 

the HealthePeople (Federal) goals and, ultimately, risk jeopardizing 

the initiative’s overall success. 

Mr. Chairman, this concludes my statement. I would be pleased to 

respond to any questions that you or other members of the 

Subcommittee may have at this time. 

Contacts and Acknowledgments 

For information about this testimony, please contact Linda D. 

Koontz, Director, Information Management Issues, at (202) 512-6240 

or at koontzl@gao.gov, or Valerie C. Melvin, Assistant Director, at 

(202) 512-6304 or at melvinv@gao.gov. Other individuals making key 

contributions to this testimony include Barbara S. Oliver, J. Michael 

Resser, and Eric L. Trout. 

(310716) 
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