Cerner wins DOD contract to modernize military health records: 10 things to know

The Department of Defense announced yesterday the bid team comprised of Cerner, Leidos and Accenture won the agency's contract to overhaul the military's health records, the biggest federal IT contract since HealthCare.gov.

Here are 10 things to know about the announcement and the contract.

1. The DOD posted its decision on the Contracts page of its website, naming Leidos as the winner for the Defense Healthcare Management System Modernization program. According to the announcement, "the contract will provide an electronic health record off-the-shelf solution, integration activities and deployment across the Military Health System."

2. The initial contract is for 10 years and is valued at approximately $4.3 billion. However, the contract has the potential to last for 18 years and be worth approximately $9 billion.

3. The winning team is now responsible for upgrading and managing the Pentagon's health records for 9.5 million beneficiaries at approximately 1,000 sites in the U.S. and overseas.

4. The rollout of the new EHR system is expected to take seven years, beginning by the end of 2016. Initial product testing is slated to begin at several locations in the Pacific Northwest next year before moving on to the rest of the network.

5. The DOD's decision came down to three final teams. In addition to the Cerner/Leidos/Accenture team, Epic submitted a bid with IBM and Impact Advisors, and Allscripts partnered with Hewlett-Packard and Computer Sciences.

6. Epic's team was widely favored to be awarded the contract, as the Verona, Wis.-based EHR vendor has a massive presence in the U.S. healthcare environment, holding contracts with some of the country's largest health systems, including Oakland, Calif.-based Kaiser Permanente, Rochester, Minn.-based Mayo Clinic and, recently, Boston-based Partners HealthCare.

7. Concerns about the longevity of the new medical system remain, regardless of which team was awarded the contract. A Politico story published before the DOD's announcement questions why the government was considering bids from three EHR vendors that are often noted for their inability to interoperate and overall frustration by clinical users.

8. Additionally, some experts worry that the new product will already be outdated within the next decade. Phillip Carter, a senior fellow and counsel at think tank Center for a New American Security, told Politico, "My takeaway is, they are procuring a system for how their system works today, not for visions of how it might exist in five or 10 years."

9. The Pentagon was originally working with Veterans Affairs to develop a joint EHR system, a project initiated by President Barack Obama in 2009, according to Politico. The two agencies started working together in 2011, though after two years of work and $1 billion, the agencies decided to part ways. VA is updating its in-house VistA EHR platform while the DOD set out for a commercial product and placed this call for proposals.

10. Rep. Phil Roe (R-Tenn.), MD, a member of the Committee on Veterans' Affairs, echoed concerns regarding interoperability and usability, especially in the context of sharing records between DOD and the VA. "If we allow the DOD to put in a system that then can't interconnect, that is not interoperable with other systems, that will be a big mistake," he told The New York Times. "If we have to go to the appropriations committee and cut the money off and get them to slow down and reassure us that this won't be a big mess, that's what we'll do."

Editor's note: This article was updated Aug. 3, 2015 to correct the total contract value from $9 million to $9 billion. We apologize for the error.

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