Pentagon sticking to its guns in commercial approach to health record system

Thursday - 6/26/2014, 4:10am EDT

Jared Serbu reports.

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Within the next few months, the Pentagon will release a multibillion dollar solicitation to buy a new commercial IT system to manage its health records, and the officials managing the project say they will resist the Defense Department's usual urge to customize the system so much that it no longer looks anything like a commercial product.

After DoD and the Department of Veterans Affairs abandoned their multiyear effort to build a single, shared electronic health record (EHR) system, DoD decided the next best way to solve the data sharing problem between the two departments was to buy a commercial health IT system that adhered to the common data standards around which the private healthcare world has already begun to coalesce.

Defense Secretary Chuck Hagel ordered that course change just over one year ago, and DoD has been busily issuing requests for information and draft requests for proposals ever since.

After circulating three draft versions, the Pentagon expects to publish a final RFP by the end of September and will likely issue a 10-year contract worth several billion dollars by the third quarter of next year.

Throughout that process, nothing has changed the Pentagon's view that it needs to buy a commercial-off-the-shelf solution and demand very few government-specific modifications, said Chris Miller, the program executive officer for defense healthcare management systems.

"If you go and do research on the acquisition of major business systems or IT systems, where they usually get in trouble is when they try to take a commercial tool and change how it's built," Miller said. "We're eyes-wide-open to that, and it's also been a very clear message we've gotten back from the commercial sector. If you really want this to be successful and have agility, you've got to minimize those kinds of things."

Speaking to reporters just after an industry day DoD hosted for 600 vendors who are pursuing the EHR procurement, Miller said the department has two main principles for its adoption of a commercial solution.

First, while it's perfectly acceptable to make configuration changes within the parameters the developers designed, any requests to change the underlying software so that it suits the way military healthcare facilities do business right now should be very few and far between.

The second principle is closely related. DoD says it wants to use the new EHR system as a prod to standardize the way the military services conduct their business and clinical operations around the world, not the other way around.

"We are not going to tailor this for every single healthcare facility or even every military service," Miller said. "We really want people to have to work through how they can use the tools before we customize the tools. If you want to be agile, you really have to minimize how much customization there is."

The Pentagon estimates the new EHR system will cost $11 billion over its roughly 15-year lifecycle. Under the current acquisition strategy, the contract award it expects to make next year will last for up to 10 of those years.

Miller said the long performance period is justified because of the complexity of the tasks the winning team will have to perform, which will take several years to fully implement across the DoD healthcare system.

"We wanted to build a contract structure that incentivizes the contractor to really do the right things," he said. "I want them to see that we have a commitment, and one way to do that is to make sure they don't have to worry about competing for a new job every other year. You also have to consider the length of the deployment over more than 1,000 different locations. We would like to modernize our system quickly, but we recognize there are places that are going to take longer to get to. We want to make sure the contract covers the full deployment of the modernized system and also has a couple years of incentives, so that the industry partner can make the kinds of investments they need to in order to make this program successful."

Success will mean that DoD delivers a health IT system that lets DoD healthcare facilities freely exchange patient data with VA and also moves the military's own aging systems into the 21st century.

Miller said he expects somewhere between four and six teams of health IT software developers and systems integrators to compete for the contract, and did not foreclose the possibility of adopting some variant of VA's VistA system.