Leidos-led team wins $4.3B DOD health records contract

The Defense Department has awarded its long-awaited, multibillion dollar contract to overhaul its health care records system to a team led by Leidos, along with Accenture Federal Services and electronic health records provider Cerner.

The $4.3 billion contract for the DOD Healthcare Management Systems Modernization (DHMSM) could be spread over 10 years, with a two-year initial ordering period, followed by two three-year options and a potential two-year award term. The total cost of the system over its planned 18-year lifecycle, once estimated to be $11 billion, will be closer to $9 billion, DOD officials said.

DHMSM (pronounced “dim sum”) will modernize the Military Health System’s clinical systems and provide electronic health records that will be interoperable with those of the Veteran Affairs Department, which is doing its own modernization. It will serve the estimated 9.6 million active-duty service members, retires and family members, operating at 56 hospitals and more than 600 clinics.

The effort to modernize health records has long been in the works. During one stretch, DOD and VA tried to develop an electronic health records (EHR) system together, but abandoned that approach in February 2013 after years of work and about $30 billion in costs. Instead, they have gone separate ways, with DOD opting to replace its Armed Forces Health Longitudinal Technology Application (AHLTA) system with DHMSM and VA moving to modernize its Veterans Health Information Systems and Technology Architecture (VistA).  Both DOD and VA said their records will be interoperable with each other.