Epic, IBM launch joint effort on new military EHR system

Epic Systems Corp. and IBM have partnered to bid on what could be an $11 billion contract to replace the Military Health System's electronic health-record system.

The contract—the Department of Defense Healthcare Management Systems Modernization project—will update all clinical systems throughout the MHS. The organization includes 56 military hospitals and about 360 clinics, which is about one-third the size of the Veterans Affairs health system. Dr. Jonathan Woodson, assistant secretary of defense for health affairs, said in an April House Appropriations Subcommittee of Defense hearing that the “lifecycle” cost of a project such as this could cost $11 billion.

Epic will focus on the EHR side of the equation, while IBM will oversee operations. Dr. Keith Salzman, IBM's chief medical information officer and a former Army physician, will spearhead the joint project.

Epic spokesman Shawn Kiesau said the company will not comment further on the bid. In a statement, Epic President Carl Dvorak said, “We would be honored to be part of the solution to modernize the MHS. In collaboration with IBM, we can provide a successful implementation that will support innovation and interoperability within military healthcare.”

Other major EHR vendors, including McKesson and GE Healthcare, were not immediately available to comment if they, too, had planned on making a bid on the DHMSM deal. However, Cerner Corp. Senior VP Sam Pettijohn indicated in a statement that Cerner would push for the contract. “Military members and their families deserve an open, interoperable platform that lets them manage their healthcare needs throughout their lifetime,” he said. “Cerner is proud to be considered for this opportunity.”

Seth Frank, vice president of external communications at Allscripts, said Allscripts “doesn't publicly discuss relationships with existing or potential clients.” Bidding is expected to formally commence later this summer.

This January, the Defense Department released a draft request for proposals for a new EHR system that would also be interoperable with VistA, the system used within the VA. Former VA Secretary Eric Shinseki had said the agency would compete for the EHR contract, and interoperability between the two departments would be a key outcome even if the VA didn't win the bid.

Defense Secretary Chuck Hagel said last May that a bidding process that includes commercial contractors “is the optimal way to ensure we select the best value solutions for DoD,” essentially nixing an in-house solution.

Follow Bob Herman on Twitter: @MHbherman