Cerner Raises Costs on Department of Defense's New EHR

Thomas Dworetzky | Health Care Business | July 13, 2016

The Defense Department's giant health record effort just got a bit bigger – Cerner has bumped up its $50 million estimate on data center costs to about $75 million.

The Defense Healthcare Management Systems Modernization (DHMSM) is presently set to cost $4.3 billion – so it's a relatively small bump up. Beyond that, DoD spokesperson David Norley told Politico that the additional funds will go to better data access and keep up with a boost in data demands – and won't push the Cerner and Leidos deal beyond its $4.3 billion cap, which was set when it was signed last July.

The contract originally went to Cerner because it has a huge amount of clinical data that improves analysis – but it won't work with other data centers and the government can't compel the company to do so. In addition, their systems' uptime rates are over 99 percent, which is beyond the 98.5 percent that DoD put out as the minimum in its original call for bids.

On a DHMSM call in early July a spokesperson stressed, "when we're talking about clinical data, that availability can be the difference between life and death," adding that the cost of Cerner was “significantly higher” than early estimates, but it will still be “within 10 percent” of what it would have run had the hosting been performed by the Defense Information Systems Agency. That said, the DoD told FCW that it might open up the hosting part of the DHMSM for new bidding as soon as 2017...