Inside the Cerner, Leidos, Accenture and Henry Schein DOD contract bid

This story is the second in a series of three containing interviews with the three teams contending for the Department of Defense's Healthcare Management Systems Modernization project bid.

Since announcing a joint bid for the DOD's $11 billion EHR contract in June 2014, leaders from Cerner, Leidos and Accenture have added dental supply company Henry Schein and Salt Lake City-based Intermountain Healthcare as members of the team. The DOD announced that the team had made the list of three finalists in February, putting it in direct competition with teams that include major competitors, including Epic on one team and Allscripts on another.

Although there are just months until the final decision comes down in the summer, Jerry Hogge, senior vice president and deputy group president for Reston, Va.-based Leidos Health, said the team has been working on the bidding process for the better part of two years. Leidos holds a number federal contracts, bringing the federal experience to the team, and flows with Dublin, Ireland-based Accenture's implementation practice, Kansas City, Mo.-based Cerner's EHR platform and Melville, N.Y.-based Henry Schein's distribution reach and dental expertise, he said.

Mr. Hogge joined Travis Dalton, Cerner's vice president and federal general manager, Jim Traficant, president of Accenture Federal Services subsidiary ASM Research, and Kevin Bunker, president of Henry Schein's North America Dental Practice Solutions, in a conversation with Becker's Hospital Review about the contract bid.

Note: Answers have been edited for length and clarity.

Question: What does your solution bring to the Department of Defense's healthcare system?

Jerry Hogge: We're absolutely honored to have made the competitive range and flattered that the government evaluated our proposal to recognize what we believe is a very innovating modern solution that's focused on the DOD's healthcare mission. Leidos has had nearly three decades of support for the current system. We've been engaged with it for a very long period of time.

Travis Dalton: Our intention here is to bring the best practices and the solution that we've developed over several decades to bear for the Department of Defense. As a company, we're going for innovation and our investment in IT. We've invested over $2 billion in our intellectual property, and we have invested over $3 billion in intellectual property and will invest $600 million this year. A great deal of that goes into developing a modern solution for our client base. Our intent would be to bring the best of both worlds together.

Q: How did the partnership come about?

JH: We were thoughtful about the way we put our team together. We stayed in lock step with [DHMSM Program Executive Officer Christopher Miller] to really understand the strategy that the partnership would take. The program executive officer's team went to commercial hospitals and saw all the systems in an actual hospital setting. They conducted four live industry days where they presented what their acquisition was all about and ultimately produced a final set of requirements, affectionately known as a request for proposal. We have been looking at the predecessor programs and the strategy that underpinned those. As the picture became clearer for what this acquisition was going to be, it became clear that Leidos' experience would complement what Accenture has to bring, which is the largest EHR deployment company globally. Given the DOD's focus on interoperability, modularity and modern open systems architecture, it was a natural fit to team with Cerner and Henry Schein.

Jim Traficant: How Accenture thought about this in partnering with Leidos is the focus on the mission. This is about national security and a very unique health system, in that the DOD is global. The solution is designed for interoperability, which supports the DOD's mission. The DOD has to interoperate with the private sector. The other point I would make here that's very unique about the team is that Leidos as a company is unmatched with their global support for the defense community today. This is not something you can just walk in and pick up. This is very unique.

Q: How has it been to work with a federal agency to develop this system?

JH: What I'd say is that the government was very thoughtful about their acquisition process. They were very thorough about their requirements, not just for today but over the 10-year life of this program. They required all systems to be ONC-compliant. You have to meet the national standards.

TD: There are large healthcare issues around quality and payers and bundled payments and regulations, and all that collectively is moving the conversation beyond EHR options to a much more detailed conversation about data. How do you get data, and once you get it, how do you use it in a meaningful way? You have to be prepared in working for the next phases of EHR optimization and personalized care. We think it's important that whoever the DOD selects should have the ability to meet the requirements of the future. All of that together, we really believe, is the strong suit of our company. We're very excited about the conversation and where it's going.

Q: What is the role of strategic partnerships in healthcare, and how will this contract bid impact the relationships between your companies?

JH: Strategic partnerships have made sense over my career. Rarely do you find a single entity that meets the requirement of something [so] broad. Strategic partnerships work very well in my experience, and we're confident that this strategic partnership will perform very well. The added dimension of partnership here is that the four companies have committed to be partnered with the DOD and the Defense Health Agency. It's not about the system itself — it's about the efficient delivery of healthcare wherever and whenever it may be required. We chose the name "partnership" deliberately to reflect the positive message around partnering with the DOD and DHA.

TD: In healthcare in general, you're seeing large entities partnering together, and you see partnerships on the provider side as well, creating networks and making other enterprises. Not every single entity out there is going to have every single solution. It's naïve of us to think that, and it's better for the industry to incentivize partnerships to enhance innovation.

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