The Department of Veterans Affairs is on course to be the top agency for government health IT spending in the next five years, according to a new market forecast from DelTek. The Department of Health and Human Services currently leads in IT spend, but the completed deployment of the Affordable Care Act insurance marketplace will curtail some of that spending just as the VA begins to ramp up.

“Growth in the federal health IT market is due predominantly to investments at VA and [Department of Defense] for new [electronic health records] and the associated network and other infrastructure upgrades,” the report said.

David Shulkin, then secretary of Veterans Affairs, announced in June 2017 that his agency would be adopting an EHR system on the same platform (provided by Cerner) as the DoD, in part to improve interoperability for service members’ health records as they transition into veteran status.

The Government Accountability Office said that it expects the initial rollout of the VA system to begin in June 2019.

As of 2017, HHS represented just over 40 percent of the federal government’s approximately $7.5 billion health IT spend. VA represented 27 percent, and DoD came in third at 24 percent.

(data source: DelTek Federal Health IT Market Predictions 2018)
(data source: DelTek Federal Health IT Market Predictions 2018)

However, according to the report, federal health IT spending will increase to $8.1 billion by 2023, in part due to a predicted increase in Medicare enrollment by that time, and Veterans Affairs will make up the largest chunk of that spending at 40 percent.

(data source: DelTek Federal Health IT Market Predictions 2018)
(data source: DelTek Federal Health IT Market Predictions 2018)

By that time, the DoD is expected to have reached full deployment of their EHR system, MHS GENESIS, and have an IT spend representing 27 percent of the federal market.

“Look for ancillary opportunities to support EHR implementation efforts at DoD and VA, such as solutions for interoperability with outside health care organizations, application development for use by doctors and/or patients that leverages EHR data, infrastructure upgrades, and solutions for functions that will not be provided by the new EHRs,” the report suggested to contractors looking to be a part of the federal health IT spend.