US Department of Defense picks Cerner

Cerner has been selected by the US Department of Defense to provide a new electronic health record system for the US military.

In the largest and most eagerly anticipated US healthcare IT deal of recent years, a consortium of Cerner, Leidos and Accenture was selected last week to provide the new EHR in a deal thought to be worth up to $9 billion over ten years.

The new contract will cover more than 9.5 million Department of Defense beneficiaries and the more than 205,000 care providers that support them.

The contract's initial phase, valued at $4.3 billion, calls for the provision of "an electronic health record off-the-shelf solution, integration activities and deployment across the Military Health System".   

Up to 50 legacy systems will be replaced by the new Cerner EHR. The new system is global and must operate in remote places like Afghanistan, in addition to DoD’s 55 hospitals and more than 600 clinics.

The Cerner consortium was picked ahead of arch-rival Epic, which many observers had tipped to be the eventual winner.

The DoD chose between three teams: Epic Systems with IBM and Impact Advisors; Cerner, Leidos and Accenture; and Allscripts with Computer Sciences Corporation and Hewlett-Packard.

The DoD said that running a successful competition had enabled it to bring prices down by up to 20%.  Initial estimates had been placed at $11 billion, rather than the $9 billion lifetime figure.

The Defense Healthcare Management System Modernization programme, DHMSM, is based on replacing the DoD’s custom built systems, which have been developed over the past 25 years, with a commercial off-the-shelf solution that is interoperable and avoids future vendor lock-in.

A key part of DoD's requirement, was that the EHR interoperate with private sector systems, since somewhere between 60% and 70% of care takes place outside the DoD.

The contract will improve current interoperability among the DoD, the Veteran’s Health Administration, which runs its own, in-house, open source system, VistA, and private sector health-care providers. It will enable each to access and update health records.