Coming Soon: Pentagon’s Multi-Billion Dollar Health Records Contract

Sometime in the coming months, the Defense Department will bid out its Healthcare Management Systems Modernization contract, an effort so large in monetary size and game-changing scope that it could significantly influence the future of health care in the United States. The DHMSM contract’s estimated lifecycle value is approximately $11 billion and would include initial operating capabilities by 2017 and full functionality by 2023, according to Dr. Jonathan Woodson, assistant secretary of Defense for health affairs, who testified in February before the House Appropriations Committee’s defense panel.

Even in Washington, $11 billion is a lot of money, and it would surely rank among the largest IT-related contracts in government. What’s unique about this effort is that the Pentagon wants a single contractor to lead the integration of a commercial electronic health records system to cover its nearly 10 million beneficiaries and large assortment of health care facilities worldwide. Defense is one of the largest health care providers in the country, on par in size with the Veterans Affairs Department and private sector leaders like Kaiser Permanente.

Presumably, big-name Beltway-familiar contractors – the IBMs, Accentures and Northrop Grummans of the world – will partner up with vendors of enterprise electronic health records systems like Epic or Cerner. These and other companies have had a slew of representatives present at several industry days held around DHMSM, and most have already partnered up in preparation for the contract, though they won’t publicly discuss those relationships...