Fed expenses for health IT services reach $6.5B in 2015 year

Expenses on IT services by federal health agencies reached $6.5 billion in the year of 2015, up primarily from $2 billion in the year of 2011, in accordance to research firm Govini.

Not astonishingly, the Department of Health and Human Services—specifically the Centers for Medicare and Medicaid Services (CMS)—led spending from the time period of 2011 to 2015 with almost $13 billion in prime contract obligations.

Govini points out that, with $6.8 billion in complete prime contract obligations, CMS accounts for over half of HHS’ expenditures on IT services during that time.

“The agency has been making preparation for advancement by making foundational contributions in call centers, IT infrastructure and data centers,” claims Govini’s report.

However, federal health IT services grew 27% yearly despite of sequestration-driven budget constraints,  in accordance to the findings of the report.

“The Department of Health and Human Services grew at 34% compound yearly growth rate and the Department of Veterans Affairs (VA) grew at 25% CAGR,” claims the report. “Defense Health Agency (DHA) expenses decreased during this period at -6% CAGR amid sequestration constraints and the reorganization of the Military Health System.”

The report of Govini also summarizes that the outlook in the Fiscal Year 2017 budget proposal of President is powerful, with technology contribution geared towards systems advancement, EHRs, networks and cybersecurity.

In specific, the firm claims VA and DHA in FY17 are “planning huge Information Technology investments that opponent HHS’s in scope.” In particular, Govini mentions that the DHA is heading towards the path in EHR advancement through its Defense Healthcare Management System Modernization (DHMSM) program. Previous year, the Pentagon granted a $4.3 billion contract award to the Leidos-Cerner team to advance the EHR system of DoD.

Nevertheless, in accordance to the report, CMS sustains to drive HHS Information Technology modernization. “Its huge initiative is to make better the usability and functionality of the Marketplace by making better the eligibility, plan management and payment functions,” asserts the firm. “In the intended FY17 budget, $333 million is committed to make advancement in the claims processing systems and call centers,” while “the department of security and network is driving the VA contribution.”