fed sources infocus - the federal healthcare technology domain

8/14/2019 Fed Sources InFocus - The Federal Healthcare Technology Domain

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In Focus: The Federal HealthcareTechnology Domain

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R A Y B J O R K L U N D , S V P A N D C K O

2 8 J A N U A R Y 2 0 1 0


2/20

Scope of the Healthcare Tech Domain (1)

This analysis is not about Healthcare reform legislation

Health IT (patient-centric information resources), per se

HITECH Act incentives to practitioners

Grants, loans, subsidies to S&L governments, such as Medicaid and

Emergency Medical Services for Children grants

FedSources 2010, All Rights Reserved. Reproduction Prohibited. 2

Health benefits directly to individuals, such as Medicare, other

insurance programs, and food and nutrition programs

Social services, except delivery of healthcare

Food production research

Environmental studies

HHS (alone) Theres more to healthcare

technology than Health IT


3/20

Scope of the Healthcare Tech Domain (2)

Examines contractor-addressable federal spending ontechnology and services for

Healthcare policy development

Researching advances in medicine, biology, and prostheses

Public health data collection and analysis

Disseminating information and education


Overseeing healthcare system integrity

Protecting food supply and medical delivery systems, including

veterinary sciences

Analytical and diagnostic equipment

Information technology to support healthcare operations

Occupational safety and health administration

Purchased services of health professionals


4/20

Impact of Healthcare Costs (1)

$2,000B

$2,500B

$3,000B

$3,500B

andatorySpending

Medicare andMedicaid(6%)

Social Security(5%)

TRICARE forLife (6%)

FederalRetirement 3%

Healthcare costs

growing faster

than the economy


$0B

$500B

$1,000B

$1,500B

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

OutlaysofFederal

Other mandatory programs (-10%)

Veterans Income security (2%)

Income security (-3%)

Net Outlays (3%)

Source: CBO, The Budget and Economic Outlook: An Update, August 2009; compound annual growth rates

(CAGRs) are for period 2010- 2019; does not address internal government spending on healthcare


5/20

Impact of Healthcare Costs (2)

CBO claims that healthcare is the biggest hurdle precludingdeficit reconciliation

Indirect effect on contractor-addressable market = offsets

Direct effect = medical benefits for federal employees

Several key contributing factors to rising costs


Healthcare education

Liability indemnification

Inefficiencies in the processes

Care delivery

Medical administration

The federal budget is on an

unsustainable path, primarily because of

the rising cost of health care and the

aging of the U.S. population.

www.cbo.gov

Is the internal government healthcare system as efficient as it could be?


6/20

The Federal Healthcare System (1)

VA civilian:

157,700+

DOJ civilian:

2,200+

Other HHS

Agencies and

Offices

HHS CDC

HHS civilian:

31,300+

EPA

DOJ FPS

DOJ USMS

340,000+ healthcare professionals represents a nontrivial system

VA VHA

USDA

DoD MHS

military:

113,700+

civilian:

34,300+


PHS

military:

6,000+

HHS FDA

HHS IHS

HHS AHRQ

HHS HRSA

HHS CMS

HHS SAMHSA

HHS NIH

DOC NOAA

DOI NPS

civilian:

2,100+

DoD AMEDD

DoD BUMED

DoD AFMS

Def Agencies

DoD TMADHS ICE

DHS USCG

USDA APHIS

USDA FSIS

Source: FedSources analysis of major populations

of federal healthcare professionals (medical and

veterinary), using OPM employment data, DoD

manpower requirements, Public Health Service

statistics, and the Presidents Budget


7/20

The Federal Healthcare System (2)

Direct recipients Active duty military, dependents, and retirees (9.5M beneficiaries)

262,405 inpatient admissions

30,558,627 ambulatory visits

53,514,817 scripts

Veterans (6.1M patients, 900+ medical facilities)


American Indians and Alaska Natives (1.9M patients)

Inmates and detainees (210K inmates + 60K detainees)

Certain civilian employees

Disaster victims

Indirect recipients

US public

Other nations

Source: GFY2010 Presidents Budget and agency Web sites

More than 11 million

direct recipients


8/20

Federal Healthcare Tech Domain (1)

Health research and

promotion

Studies of social and demographic factors,investigations into prevention and cure of diseases,

and enhancement of the healthcare system

Application ofDevelopment of

standards anal sis


Healthcare delivery

Medical and dental services, other services,

pharmaceuticals, medical supplies, and

facilities construction and maintenance

food and human healthof health trends,

and preparedness


9/20

Federal Healthcare Tech Domain (2)

Health research and promotion Health protection Healthcare delivery

Biomedical

research

Policy and

planning

Public health

science, policy,

and practice

Disease

prevention

Pathology

Environmental

health

Epidemiology CBRNE

assessment

Hazard and

Medical

research

Healthcare domain in the federal government

Medical

care

Dental care

Combat

medicine

Emergency

and

$7.28B: 26% CAGR $5.83B: 8% CAGR $54.09B: 4% CAGR

$67.20B: 6% CAGR


Behavioral,

social, and

economic

research

Health

professionals

educationand training

Clinical

investigation

Public health

education

Occupational

health

Preparedness

and responseMedical

device safety

Drug safety

Food safety

Toxicology

Compliance

and testing

Medical

counter-

measures

Emergency

response

Disease vector

management

stress analysis

Genomic

research

Rehabilitative

research

Veterinary

care

Pharmacy

services

Acquisition of medical

materiel, services, and

facilities

humanitarian

missions

Source: FedSources analysis of GFY2010 Presidents Budget, OMB, and agency

Web sites; contractor-addressable dollars in GFY2010 and percent CAGR from

GFY2008 to GFY2010; does not include grants, loans, subsidies, or incentives

Informatics : ~$725M

Health IT: ~$900M

Program integrity: ~$130M

Grants management: ~$50M

Cross-cutting

activities


10/20


11/20

$30B

$40B

$50B

$60B

$70B

$80B

$90B

a

ddressablefederalspend

ing

Healthcare Tech Spending by Subdomain

Source: FedSources

analysis of GFY2010

Presidents Budget;

contractor-

Despite past growth

in research, cost of

delivery will be the


GFY2008 GFY2009 GFY2010 GFY2011 GFY2012

CAGR

GFY08-

10

CAGR

GFY08-

12

Health protection $4.98B $6.42B $5.83B 8%Health research and

promotion$4.60B $6.13B $7.28B 26%

Healthcare delivery $49.91B $53.50B $54.09B 4%

Totals $59.49B $66.05B $67.20B $72.24B $77.30B 6% 7%

$0B

$10B

$20B

Contractor-

addressable market

does not include

grants, loans,

subsidies, or

incentives

driver


12/20

Healthcare Tech Spending by Category

Source: FedSources

analysis of GFY2010

Presidents Budget;

contractor-

$20B

$30B

$40B

$50B

$60B

$70B

$80B

a

ctor-addressablefederalspending


addressable market

does not include

grants, loans,

subsidies, or

incentives

GFY2008 GFY2009 GFY2010 GFY2011 GFY2012CAGR

GFY08-10

CAGR

GFY08-12

Real property $3.57B $4.62B $3.42B -2%

Telecomm $1.14B $1.28B $1.41B 12%

Prof services (incl R&D) $4.91B $7.24B $6.00B 11%

Otherwhite collar services $11.26B $11.38B $12.33B 5%

Medicalservices $19.37B $19.90B $21.24B 5%Investment products $3.65B $3.64B $4.25B 8%

Consumable products $13.72B $15.98B $16.49B 10%

Blue collarO&M services $1.89B $2.00B $2.06B 4%

Totals $59.49B $66.05B $67.20B $72.24B $77.30B 6% 7%

$0BContr


13/20

Healthcare Contracting

VA: more than half purchased through VA Schedules

Pharmaceuticals

Medical supplies and materiel

Medical and laboratory equipment

Medical staffing

HHS NIH

Agency-wide BPAs

Decentralized ordering is a

key purchasing method for

core services and products


Some VA Schedules

HHS CDC: pharmaceuticals, vaccines for Strategic National Stockpile

DoD DLA-DSCP

Pharmaceuticals, coordinated with VA

Medical supplies and materiel

DoD USAMRAA: specialized requirements, supported by VA

DOJ FPS

Services through agency contracts

Pharmaceuticals through VA Schedules

Source: FedSources analysis of GFY2009 FPDS prime contract award data and online federal catalogs


14/20

Inferred Business Opportunities (1)

Certification processes Health information exchanges

Information security and privacy

Health IT devices

Meaningful use standards

Opportunities in implementing

and applying governance


Strategic sourcing

Clinicians and practitioners

Pharmaceuticals and medical supplies

Supply chain management

Enhancements in grants management

Source: FedSources analysis


15/20

Inferred Business Opportunities (2)

Modernization of healthcare delivery Workflow and process re-engineering

Case management tools

Investment in clinical diagnostic tools

Building out IT and facility infrastructure, including telecomm

Training of healthcare providers in information-based technologies

Opportunities in Health IT

development and informatics


Information sharing, accelerated by high performance

computing and cloud computing

Speeding research and collaboration

Improving quality of care, patient-centric decision support

Homeland security Preparedness

Countermeasures



16/20

Information assurance

Availability

Integrity

Authentication

Confidentiality

Bandwidth

Enterprise scalability

Accessibility to clearinghouses

for technology

Ability to rapidly develop and

deploy

Pressing Healthcare Technology Issues


Interoperability

Compatibility

Processes and procedures

User-to-user human

protocols

Information exchange

standards

In healthcare technology,

perfect is not the enemy

of good enough



17/20

Observations

Bioterrorism countermeasures the next

healthcare spending wave?


DoD materiel

commands

and labs

DHS OHA

USDA APHIS

USDA FSISHHS CDC

DOJ FBI

DOE DOS

Source: FedSources analysis of World at Risk: The Report of the Commission on the Prevention of WMD

Proliferation and Terrorism, 2 December 2009; and Presidents State of the Union Address, 27 January 2010

USPS


18/20

Summary

Health research and

promotion

Health protection

Measure and investigate

and defendProtect


Healthcare delivery

You have great opportunities in improving the effectivenessand efficiency of the federal healthcare system

Care for the entitled

A $70Bmarket


19/20

Experience | Intelligence | Integrity

In Focus: The Federal Healthcare

Technology Domain

Ray Bjorklund, SVP and CKO

28 January 2010

www.fedsources.com


20/20

AFMS: Air Force Medical Service

AHRQ: Agency for Healthcare Research and Quality

AMEDD: Army Medical Department

APHIS: Animal and Plant Health Inspection Service

BUMED: Navy Bureau of Medicine and Surgery

CAGR: compound annual growth rate

CBRNE: chemical, biological, radiological, nuclear, and high-yield

explosives

CBO: Congressional Budget Office

CDC: Centers for Disease Control and Prevention

CMS: Centers for Medicare and Medicaid Services

DARPA: Defense Advanced Research Projects Agency

Def: Defense

DHS: Department of Homeland Security

HRSA: Health Resources and Services Administration

ICE: Immigration and Customs Enforcement

IHS: Indian Health Services

IT: information technology

MHS: Military Health System

NIH: National Institutes of Health

NIST: National Institute of Standards and Technology

NOAA: National Oceanic and Atmospheric Administration

NPS: National Park Service

OHA: Office of Health Affairs

OPM: Office of Personnel Management

OSHA: Occupational Safety and Health Administration

PHS: Public Health Service

RUS: Rural Utilities Service

Selected Acronyms


DOC: Department of Commerce

DoD: Department of Defense

DOE: Department of Energy

DOI: Department of the Interior

DOJ: Department of Justice

DOL: Department of Labor

DOS: Department of State

DLA: Defense Logistics Agency

DSCP: Defense Supply Center Philadelphia

EPA: Environmental Protection Agency

FBI: Federal Bureau of Investigation

FDA: Food and Drug Administration

FNS: Food and Nutrition Service

FPS: Federal Prison System

FSIS: Food Safety and Inspection Service

HHS: Department of Health and Human Services

HITECH Act: Health Information Technology for Economic and

Clinical Health Act

TMA: TRICARE Management Activity

TRICARE: health care program serving active duty service members,

National Guard and Reserve members, retirees, their families,

survivors and certain former spouses

S&L: state and local

SAMHSA: Substance Abuse and Mental Health Services

Administration

USCG: United States Coast Guard

USDA: United States Department of Agriculture

USMS: United States Marshals Service

USUHS: Uniformed Services University of the Health Sciences

USAMRAA: United States Army Medical Research AcquisitionActivity

VA: Department of Veterans Affairs

VHA: Veterans Health Administration

WMD: weapons of mass destruction

USPS: United States Postal Service

fed sources infocus - the federal healthcare technology domain

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