Leidos to Modernize Health Care IT System

The Defense Department has awarded a Leidos-led team a $4.3 billion contract to modernize its electronic health records (EHR) system, but analysts are skeptical that the ambitious program goals will be achieved.

The contract award, announced at the end of July, calls for Leidos and its project partners — the Cerner Corp. and Accenture Federal Services — to use off-the-shelf technology to create a new EHR system, which is expected to cover 9.5 million Defense Department health care beneficiaries and more than 205,000 government and commercial health care providers. The Pentagon operates 55 hospitals and more than 600 clinics, and the new system must operate globally, including in austere places like Afghanistan, according to a Defense Department news release.

The Leidos team is expected to complete its 10-year contract work by September 2025, if all options are exercised.

Loren Thompson, CEO of Source Associates, a Virginia-based defense consulting firm, said the initiative would be “the biggest EHR project in history.”

The effort is intended to improve operability among the Defense Department, Department of Veterans Affairs and private sector providers, allowing all parties to access and update health records.

“The patients we serve are frequently on the move, as are our caregivers, so it is very important to have a highly integrated system that is portable to serve the needs wherever they may be required,” said Assistant Secretary of Defense for Health Affairs Jonathan Woodson in the news release.

Analysts said it would be difficult for industry and the Defense Department to meet the program’s objectives.

“I’m not very optimistic,” said Niam Yaraghi, a health care IT expert at the Brookings Institution, a Washington, D.C.-based think tank. “It’s a large IT project and it’s very difficult for the federal government to succeed in large IT projects. … They want to do something that nobody has been able to do yet.”

He described the task as “mission impossible.”

Thompson said the way the project is structured is problematic.

“This is not the best acquisition strategy,” he said. “Modernization of health records is desperately needed but it seems that the plan will use off-the-shelf technology that hasn’t worked so well in the private sector. … Interoperability across agencies and domains is really crucial to success, and that’s where the off-the-shelf solutions have tended to falter.”

He cautioned that the system could become outdated quickly.

“It’s essentially a pre-Internet solution,” he said. “It won’t be able to keep up with what the Pentagon needs.”

The health care management system modernization program was projected to have a lifecycle cost of about $11 billion. In the news release, Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall said “new figures” suggest the total cost will be below $9 billion. The news release did not explain the reason for the lower cost projection.

Topics: Defense Department, DOD Budget, Infotech