Federal contracts for health IT might be less than you think

The direct federal health care contracting “pie” might be large at nearly $70 billion a year, but the part devoted to direct contracting for health information technology might seem relatively small at less than $1 billion for fiscal 2010.

That's the latest estimate from Ray Bjorklund, senior vice president at FedSources research firm, who spoke at a health IT seminar Jan. 28.

For example, in fiscal 2010, Bjorklund predicts direct health IT contracting by federal agencies will total around $900 million — and even reaching that amount was a stretch, he said.

The federal health care contracting domain includes roughly $54 billion in direct care provided to military personnel, veterans, inmates and other recipients; $7 billion for research; and $6 billion for biosurveillance and medical countermeasures, Bjorklund said. It does not include the $17 billion that will be given out by the Health and Human Services Department in the form of incentive payments for doctors and hospitals that adopt and meaningfully use electronic health record systems.

Most of the federal health IT direct contracting is for certification and technical standards, interoperability, modernization, workflow, and information sharing.

The HHS Office of the National Coordinator for Health IT was provided $2 billion in stimulus law funding in February 2009 to develop health data exchanges. But the office had spent only $572,000 from that pool as of September 2009, Bjorklund said.

“The ONC is a little behind schedule in their spending,” he said.