The Department of Veteran’s Affairs and the U.S. Department of Defense, which together run one of the country’s largest public health systems, are taking a big step toward universal digital healthcare.

In the process a big electronic health records vendor also may soon be coming away with a big project payday. This morning U.S. Secretary of Veterans Affairs Dr. David Shulkin announced that the VA has selected Cerner Corp. to install the department’s new electronic health records system over the next four to five years. Over that time the final signed contract could generate up to $4 billion to $5 billion in revenue for Cerner, almost doubling the size of the company, say healthcare information technology research analysts.

More importantly, when fully installed the new VA electronic health records system will be linked to the Department of Defense medical records system. Altogether the VA and Department of Defense would share one integrated digital healthcare network and medical records database that encompasses 150 VA hospitals and 800 outpatient clinics and 55 Department of Defense hospitals and 352 clinics serving a combined 19 million active members of the military, their families and veterans.

“VA’s adoption of the same EHR (electronic health records system as DoD (Department of Defense ) will ultimately result in all patient data residing in one common system and enable seamless care between the departments without the manual and electronic exchange and reconciliation of data between two separate systems,” Shulkin says. “To date, VA and DoD have not adopted the same EHR system. Instead, VA and DoD have worked together for many years to advance EHR interoperability between their many separate applications—at the cost of several hundred millions of dollars—in an attempt to create a consistent and accurate view of individual medical record information.”

Details have yet to be worked out and the VA has not announced a final signed contract or development timeline for implementing the electronic health records system. But after a year of review Shulkin all but assured that Cerner is the final vendor by virtue of Shulkin signing a “determination and findings” document that in the “public interest” fast tracks a contract to a particular vendor and bypasses normal federal government bid procedures.

“When DoD went through this acquisition process in 2014 it took far too long and the entire EHR acquisition process, starting from requirements generation until contract award, took approximately 26 months.” Shulkin says. “Because of the urgency and the critical nature of this decision, I have decided that there is a public interest exception to the requirement for full and open competition in this technology acquisition.”

Cerner installed the Department of Defense electronic health records system and the VA deal and integrating the two military health records systems together over the next several years could generate as much as $5 billion in new revenue for Kansas City-based Cerner, says Matthew Gilmore, a healthcare information technology research analyst for Robert Baird and Co. “This will be as big as it gets,” he says.

Cerner signed a $4.3 billion deal to update the Department of Defense electronic health records system in July 2015. Cerner generated revenue of $4.79 billion in 2016, up 8.4% from $4.42 billion in 2015. Net earnings were $636.4 million in 2016 vs. $539.3 million in 2015. Cerner has yet to speak publically about the VA deal.

The VA says it has been looking to develop a fully integrated military health records system for 17 years.  “While we have established interoperability between VA and DOD for key aspects of the health record, seamless care is fundamentally constrained by ever-changing information sharing standards, separate chains of command, complex governance, separate implementation schedules that must be coordinated to accommodate those changes from separate program offices that have separate funding appropriations, and a host of related complexities requiring constant lifecycle maintenance,” Shulkin says.”

An integrated electronic health records system will have a big impact on advancing the use of shared digital health data, he says. “VA’s adoption of the same EHR system as DoD will ultimately result in all patient data residing in one common system and enable seamless care between the departments without the manual and electronic exchange and reconciliation of data between two separate systems,” Shulkin  says.