If the US Department of Defense was worried on a taking a massive contract to modernize its health-care electronic records system, it shouldn't have. 3 companies announced that they'll make bids to cast aside the DoD's aging and inadequate system and launch a new system for all of DoD's hospitals and clinics.
The latest companies for the contract are Cerner, Leidos, and Accenture.
The DoD's contract to replace its system is forecast at $11 billion. The total annual market for electronic health records stands at $10 billion. Today, hundreds of small niche companies compete to integrate health-care IT systems in practices, hospitals, and long-term care facilities, but a handful of companies have established themselves.
Cerner is the second largest provider of EHR software systems to large hospital systems, trailing by Epic. The DoD contract is a boon for the company given that its sales totaled a bit less than $3 billion.
Epic teamed up with IBM to provide the system and security support necessary, and each is a market leader, who has an edge in swaying the deal their way.
Allscripts is vying for the contract through a partnership with Computer Sciences, and Hewlett-Packard. Allscripts boasts its market share near 10%, and counts 1,500 hospitals as customers.
Cerner has lined up Leidos, who is a spinoff of government contractor Science Applications International Corporation, or SAIC, and consulting giant Accenture. Leidos built the DoD's composite health-care system under a $1 billion contract, and that system, known as CHCS, is still in use.
The company got 80% of its fiscal 2014 sales from US Government contracts, and gets nearly 70% of its sales directly or indirectly from the DoD.
Accenture's health and public service segment, is an important player in Washington and health-care policy leaders. The business generated more than $1.3 billion in revenue for Accenture in the 1Q, up 10%. The growth comes from winning the $90 million contract to repair the troubled Affordable Care Act marketplace, which demonstrates its ability to tackle tough projects.
The DoD hasn't issued a request for a proposal; however, that request should come soon and is likely to be awarded next year.