Federal health IT spending sees 'astonishing growth,' says new report

HHS and VA have made huge investments in infrastructure and cybersecurity. With its massive EHR modernization project the DHA is also opening its purse strings.
By Mike Miliard
11:14 AM
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A new analysis of information technology spending at the U.S. Department of Health and Human Services, Department of Veterans Affairs and Defense Health Agency shows that, even despite sequestration, IT services for federal health agencies are up 27 percent annually.

HHS – most notably the sprawling Centers for Medicare and Medicaid Services – was far and away the biggest spender, doling out some $13 billion in prime contract obligations between fiscal years 2011 and 2015, according to a report by market research firm Govini.

The Defense Health Agency is also making waves, of course, with its mammoth electronic health record modernization program, which awarded an initial $4.3 billion contract to Leidos, Cerner and Accenture almost exactly a year ago.

[Also: DoD awards Cerner, Leidos, Accenture EHR contract]

And the spending shows little sign of slowing in the year ahead, Govini shows, with President Obama's FY17 budget prioritizing agency investments in systems modernization, EHRs, network infrastructure and cybersecurity.

Federal technology outlays have shown "astonishing growth," even in the face of budget sequestration, according to the Govini report. The IT services market grew from nearly $2 billion in FY11 to $6.5 billion in FY15.

HHS spending grew at a 34 percent compound annual growth rate and VA increase at a 25 percent CAGR, the study shows.

While Defense Health Agency spending decreased by a 6 percent CAGR, thanks to the sequester and the reorganization of the Military Health System, that looks likely to change.

"In the past, DHA was a relatively minor agency with regard to IT services compared to its civilian counterparts," according to the report. "However, the DoD Healthcare Management Systems Modernization program is now the marquee EHR program across the federal government. DHA will have a leading role in driving patient-focused systems modernization with DHMSM and other interoperability initiatives." 

Twitter: @MikeMiliardHITN
Email the writer: mike.miliard@himssmedia.com


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