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BREAKING NEWS: Cerner/Leidos-Led Team Wins DoD EHR Contract

July 29, 2015
by Rajiv Leventhal
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The winner of the U.S. Department of Defense (DoD) massive Department of Defense Healthcare Management Systems Modernization (DHMSM) electronic health record (EHR) contract is a team headed by the Kansas-City based EHR vendor Cerner Corp., according to a report in the Washington Post.  

Other media reports throughout the day confirmed that DoD would issue a formal announcement at 5 PM eastern time Wednesday, July 29th to declare the winner of the contract, which has been in the works for nearly two years. Epic Systems, Cerner and Allscripts Healthcare Solutions were the three vendor finalists for the contract, each with its own team aimed to upgrade the military’s EHR system: Allscripts with Computer Sciences Corporation (CSC) and Hewlett-Packard (HP); Epic with IBM Corp, Impact Advisors and others; and the winning team Cerner with Accenture Federal Services and Leidos.

The new contract will cover more than 9.5 million Defense Department beneficiaries and the more than 205,000 care providers that support them. The DoD and the Veterans Administration (VA) are interoperable now, said Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall, but this contract ensures it will continue by including future software upgrades.

The next step in fielding the system is to test the software to ensure it is secure and does what is needed. The contractor will begin fielding the system at eight locations in the Pacific Northwest covering each of the services late next year. Ultimately, the system will be fielded at more than 1,000 locations worldwide. The cost over 18 years was placed at $11 billion, but new figures suggest the ultimate cost will be below $9 billion, Kendall said.

Many industry analysts and experts were predicting that the Epic team would win the bid, but it was Cerner that got the call. The award of the new modernization contract for electronic health records is a great opportunity to “save money, save time, and most importantly, save lives,” Christopher A. Miller, the Defense Healthcare Management Systems program executive officer said today in a press release statement.

“Today is not just about picking a software vendor,” Miller said. “Today is really about making sure we provide the right team that will provide the services and all those things that are necessary to meet our objectives.” Nevertheless, the department is sensitive to potential vendor lock situations. To mitigate this risk, the government negotiated specific rights to the software and technical data that will allow future contractors access to operate or sustain the system, Miller said, adding that the new system will replace up to 50 legacy systems and there is a transition plan for each one of those systems.

Last September, Cerner announced a strategic agreement with Intermountain Healthcare (Salt Lake City, Utah) in an attempt to beef up its team for the contract. Cerner is a member of the Leidos Partnership for Defense Health, an alliance that includes Leidos and Accenture, a global IT and management consulting company. The Leidos Partnership will aim to transition the DoD smoothly and securely to an open, modern, secure and interoperable system, officials said in the September news release statement. Intermountain will work with Cerner to meet the military's specific requirements to modernize its EHR process.

In recent days, as the health IT industry waited for DoD to announce the winner, reports surfaced questioning if any of the winning teams would be successful in delivering an interoperable EHR system to encompass both active military personnel who receive healthcare through the DoD’s care delivery system, and those veterans who receive care through the VA healthcare system. Nonetheless, according to earlier reports, the DHMSM program calls for an initial capability to be in place in 2016.

Healthcare Informatics will update this story as it continues to develop.

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