Cerner Wins DoD Award, Changing the Interop Landscape

Twin shocks have upset conventional wisdom: Epic failed to nab a coveted Department of Defense contract to supply electronic health records system technology, and along with other contenders, failed to appeal the federal government's decision.

EHR vendors' big ambitions include wanting to be every provider's health information exchange intermediaries, and replacing basic state-run and private HIE functions, that is: requesting patient records, and transmitting updated records after episodes of care.

Until now, these ambitions looked lopsided depending on the market share of the EHR vendor. Epic has claimed to have more than half the U.S. population under its EHR management. Kaiser and Geisinger led the Epic wave years ago. More recently, large academic medical centers in particular have skewed toward Epic.

Aligned with prime contractor IBM, Epic was the odds-on favorite to win the Department of Defense's  Defense Healthcare Management System Modernization (DHMSM contract to supply EHR technology) for 55 hospitals and more than 350 clinics worldwide. But twin shocks upset conventional wisdom in the past month.

First, the DoD awarded the contract to rival prime contractor Leidos, Inc. and its EHR partner Cerner. Then, more surprisingly, on Friday the Kansas City Star and others reported that the losing DHMSM bidders had decided not to protest the Leidos/Cerner award.

From my years of watching federal technology procurement as far back as 1985, I can say that protesting federal IT awards has been the rule, not the exception, when it comes to awards which are this lucrative. The default has been to protest, usually at minimal expense, and hope for a discrepancy to be found somewhere in the complex RFP and bidding process.

But for reasons the five other bidders have yet to reveal, none appealed.

Now we have to see how smoothly Leidos and Cerner can implement the DHMSM contract. It will take time, and as with any contract of this size, it will be challenging to execute it without making a mistake or two.

"The Partnership is fully prepared to meet the staffing requirements of DHMSM, and our globally deployed team stands ready to support the DoD and the DHMSM Mission," Cerner president Zane Burke said during an August 4 earnings call. "We believe this is a positive development for our clients, and they should have confidence that Cerner will continue to execute to meet all of our current and future commitments."

Leidos was awarded a contract for $4.3 billion over 10 years, consisting of a two-year initial ordering period, two 3-year option periods, and another two-year option period. The DoD cited a higher potential figure of $9 billion, but Burke pointed out that this higher figure represents total DoD estimated program costs over an 18-year lifecycle, not the value of the contract awarded.

To delve further into the interoperability implications of this award, which could be many, I visited the Leidos web site set up for the DMHSM bid. In addition to Leidos and Cerner, the other two core partners are the management consulting services firm Accenture and Henry Schein, which bills itself as "the world's largest provider of healthcare products and services to office-based dental, animal health, and medical practitioners," which includes practice management software.

Surrounding this core are more than two dozen other "large partners" and "small-business partners" supporting various aspects of the contract.

More interesting is the impact this award has on various ongoing EHR interoperability initiatives.

In my research for an upcoming HealthLeaders magazine story on interoperability, it became clear that one pillar of meaningful use stage 2 interoperability, the Direct Project secure messaging protocol for "pushing" Consolidated Clinical Document Architecture (CCDA) from one provider to another, is somewhat of a paradox.

It got off to a rough start. An official at Epic told me that Direct was primarily imposed on meaningful use by a handful of vendors.

"'Pull' was the accepted pathway, and then ONC took a sharp left turn, and it was really at the behest of a few special interests, and developed this Direct Project," Epic president Carl Dvorak told me during an interview. "People are now realizing that was probably a bad thing to do."

And yet, although Dvorak calls Direct "a detour on a bumpy road," which a story I reported last year seemed to bear out, more recent reports show Direct usage has surged dramatically. My recent interviews with Epic customers show this growth is occurring not only within Epic's own CareEverywhere network, but also is fueled in part by the recent growth in membership and usage of DirectTrust, a consortium of vendors and service providers who enable a trust framework that moves Direct messages between different vendors' EHR in a truly interoperable way that compels participating members to share and share alike.

Cerner kick-started Direct's growth and inclusion in the meaningful use stage 2 EHR certification requirements by contributing more than 180,000 lines of open source code to Direct, code now used in many Direct implementations.

While I don't know DoD's plans to use Direct, it stands to reason that its choice of Cerner's EHR will mean another surge in Direct usage. Due to Direct's simple messaging-based model, it may also play a role in DoD's ongoing struggle to interoperate with the Department of Veterans Affairs' VistA EHR, a struggle detailed in the just-released Government Accountability Office report on this topic.

Likewise, the DoD award probably means bigger things for the Commonwell Health Alliance, the national record locator service established by Cerner, Allscripts, Athenahealth and others two years. The Alliance now claims that 75% of the EHR vendor industry has joined. It is taking longer for Commonwell members to actually deploy its services within their products and services. Although activated in some regional pilots, Commonwell has yet to really experience a surge in nationwide use.

Direct use is surging everywhere, but record location/query/retrieval may eventually dominate the same way Web traffic numerically dominates email traffic on the Internet today. Only when we see the final rules for meaningful use 2016 and years beyond will we know to what degree pushing records or pulling records is the regulatory favorite, outside of the DoD.

There are still problems with Direct. Physicians can easily end up with multiple Direct addresses, which can be just as complicated to deal with as having multiple email addresses. And the payloads those Direct messages contain—the CCDAs—vary so widely in what they contain, and how they are formatted, they may create more work than they save for clinicians.

The DoD must wrestle with all these issues. But that will all take place outside of Epic CareEverywhere. Sooner or later, through some mechanism, even Epic will have to adjust to this new reality. Epic customers will be receiving more Direct messages than ever. Epic could choose to respond by joining DirectTrust, or the alternate CareQuality trust framework announced at HIMSS and supported by Epic. Then CareQuality and DirectTrust need to hammer out reciprocal use agreements, if enough customers demand it. This looks like the new interoperability reality.