Defense IT

Leidos-led team wins $4.3B DOD health records contract

The Defense Department has awarded its long-awaited, multibillion dollar contract to overhaul its health care records system to a team led by Leidos, along with Accenture Federal Services and electronic health records provider Cerner.

The $4.3 billion contract for the DOD Healthcare Management Systems Modernization (DHMSM) could be spread over 10 years, with a two-year initial ordering period, followed by two three-year options and a potential two-year award term. The total cost of the system over its planned 18-year lifecycle, once estimated to be $11 billion, will be closer to $9 billion, DOD officials said.

DHMSM (pronounced “dim sum”) will modernize the Military Health System’s clinical systems and provide electronic health records that will be interoperable with those of the Veteran Affairs Department, which is doing its own modernization. It will serve the estimated 9.6 million active-duty service members, retires and family members, operating at 56 hospitals and more than 600 clinics.

The effort to modernize health records has long been in the works. During one stretch, DOD and VA tried to develop an electronic health records (EHR) system together, but abandoned that approach in February 2013 after years of work and about $30 billion in costs. Instead, they have gone separate ways, with DOD opting to replace its Armed Forces Health Longitudinal Technology Application (AHLTA) system with DHMSM and VA moving to modernize its Veterans Health Information Systems and Technology Architecture (VistA).  Both DOD and VA said their records will be interoperable with each other.

The DHMSM contract at one time had as many as six suitors, which were eventually pared down to three teams, each made up (as DOD had suggested) of established integrators and EHR specialists. The Leidos team beat out teams of IBM and Epic Systems, and a team of Computer Sciences Corp., Hewlett-Packard and Allscripts. Epic is the largest EHR provider, which led some to consider the IBM/Epic team to be the favorite, but Epic has faced some criticism lately over a lack of interoperability in its systems.

About the Author

Kevin McCaney is a former editor of Defense Systems and GCN.

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