The U.S. Defense Department on Wednesday awarded Cerner Corporation a $4.3 billion contract to overhaul the health records of millions of active and retired military personnel. The 10-year Defense Healthcare Management System Modernization contract includes extension options.

Frank Kendall, Pentagon's chief arms buyer, said that the system will replace 50 older record systems that are currently used in over 1,000 sites, which include clinics and hospitals in the U.S. as well as remote health-care sites in the world such as those in Afghanistan and Iraq.

It is estimated that the contract would be worth less than $9 billion over its potential 18-year lifespan. Kendall added that the department looked forward to fully implementing the system by 2022 if not earlier.

Industry experts, however, was upset with the awarding of the contract as many predicted that it will be awarded to Epic Systems, a Wisconsin-based company considered a titan in the field of medical records and currently holds the health records of many of the country's largest hospital systems.

Electronic health records vendor Cerner has teamed up with military computing contractor Leidos and Accenture Federal Services for its bid while Epic partnered with Impact Advisors and IBM.

Prior to the announcement of the winner, some were already skeptical that the department would not be able to seamlessly exchange medical records of active and retired military personnel and their families.

Among the main objectives is for both the Veterans Affairs Department and Defense Department to electronically send records to each other, which is not currently doable. Years ago, the two departments were supposed to jointly develop a health records system but this did not push through because of rapidly rising costs.

"If we allow the D.O.D. to put in a system that then can't interconnect, that is not interoperable with other systems, that will be a big mistake," said Representative Phil Roe, a Republican from Tennessee. "If we have to go to the appropriations committee and cut the money off and get them to slow down and reassure us that this won't be a big mess, that's what we'll do."

Another goal with the new system is for health histories to be accessible wherever personnel are treated such as on front lines, a DOD health facility, the Veterans Administration or a civilian hospital anywhere around the world.

"Sixty to seventy percent of the dollars we spend on care, particularly for retirees is in the private sector," said assistant secretary of defense for health affairs Jonathan Woodson. "We must be able to interact with them."

Photo: Blake Patterson | Flickr

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