Jul 11 2016

VA, HHS Continue to Invest Heavily in Health IT and Telecommunications Services

Despite budgetary uncertainty, the health agencies are spending to modernize their technology, according to Big Data and analytics firm Govini.

Despite across-the-board federal budget cuts in recent years, the departments of Health and Human Services and Veterans Affairs have continued to invest in new health IT and technology services, according to a recent report from Big Data and analytics firm Govini.

Further, the report found that the fiscal year 2017 budget outlook for the two health-focused agencies is strong, with the VA and HSS expected to make technology investments geared toward systems modernization, networks and cybersecurity infrastructure.

Making Clear IT Investments

HHS weathered the federal government’s budget sequestration well, according to Govini, and has kept up with investment in many areas. In particular, HHS’ technology spending has been driven by investments in IT and telecommunications and in professional support. HHS has also been spending on enterprise systems development and virtual data centers, according to Govini’s analysis of HHS contracts.

Meanwhile, according to the report, there is a similar story unfolding at the VA, where IT and telecommunications spending grew 60 percent in fiscal year 2015 compared with the agency’s three-year average.

At the VA, growth in IT investment is being fueled by both health IT–related awards under the agency’s Transformation Twenty-One Total Technology (T4) contract vehicle, as well as through purchases of Microsoft enterprise software, according to Govini.

Govini notes that “an interesting dynamic common to both agencies is the investment in IT and professional services to manage and support infrastructure modernization, benefits and patient management systems.”

The Centers for Medicare & Medicaid Services (CMS), a component of HHS, drives spending on IT and telecommunications and professional services within the agency, according to Govini, and accounts for 63 percent of IT and professional services spending at HHS.

“This market has completely bucked sequestration impacts and has thrived in an era of budget uncertainty,” the report notes. Indeed, spending on IT and telecommunications and professional services grew 33 percent annually from fiscal year 2011 to fiscal year 2015, Govini says. The agency has been preparing for modernization by making foundational investments in call centers, IT infrastructure and data centers, according to the report.

Network Modernization, Cybersecurity to Dominate Agenda

Looking ahead to fiscal year 2017 and beyond, Govini expects that investment in IT and related technologies, including cybersecurity, should continue. President Obama’s fiscal 2017 budget request includes major investments in HHS modernization, driven by CMS.

The major program in that push is focused on improving the usability and functionality of the health insurances marketplaces governed by the Affordable Care Act, by improving eligibility, plan management and payment functions. Govini notes that $333 million is devoted to modernizing claims processing systems and call centers.

At the VA, networks and security are driving technology investment. Networks will require significant modernization to expand veterans’ access to telehealth, Govini notes, adding that a portion of the $1.2 billion VA telehealth initiative will likely fund network modernization and upgrades.

Security is also going to be a top IT investment at the VA, and the agency has devoted $370 million to providing information security, according to Govini.

“The investment seems necessary given the significant number of cyber attacks on federal agencies, the Office of Personnel Management (OPM) breach and VA’s stewardship of sensitive identity information,” the Govini report states. “Electronic Health Records (EHR) and benefits management are also major investment areas for the VA.”

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