Healthcare IT Project Overruns: EHR and Hospital Systems
Electronic Health Record (EHR) rollouts are among the most expensive and overrun-prone IT projects in any sector. Two examples (NHS NPfIT and VA Cerner) show the scale.
10bn pounds
NHS NPfIT final cost (original budget 6.2bn)
~50bn USD
VA-Cerner EHR projected total (original budget ~16bn)
2x-3x
typical multiple of original EHR rollout budget
Headline overruns by programme
| Programme | Country | Original budget | Final/projected | Source |
|---|---|---|---|---|
| NHS NPfIT (Connecting for Health) | UK | 6.2bn GBP (2002) | ~10bn GBP (cancelled 2011) | UK NAO 2011 |
| VA Cerner EHR Modernization | USA | 16bn USD (2018) | ~50bn USD (2022 IDA estimate) | IDA / GAO (2025) |
| DoD MHS Genesis (Cerner) | USA | 4.3bn USD (2015) | ~9bn USD (2022) | DoD IG |
| Australian My Health Record | Australia | 466M AUD | ~2bn AUD | Australian National Audit Office |
Why EHR rollouts overrun so consistently
- Clinical workflow variability: Two hospitals in the same chain can have radically different intake, charting, and discharge workflows. Vendor templates rarely fit without customisation, and customisation drives cost.
- Interfacing legacy: Hospital lab, radiology, pharmacy, billing, and bedside-device systems must integrate with the EHR. Each interface is a bespoke build.
- Training and productivity loss: Go-live productivity typically drops 20-30% for 3-6 months. Backfill staff and overtime costs are routinely under-budgeted.
- Regulatory and safety: HIPAA, HITECH, FDA medical-device software rules, and clinical-safety case requirements (UK DCB0129/0160) all add validation effort.
- Scope expansion: Organisations almost always expand scope mid-project (add modules, add specialties, add sites). Each expansion compounds.