Update: Cerner has been announced as the winner of the DoD EHR Contract. So, we’ll have a chance to see what impact this has on future EHR contracts for Epic.
For those not familiar with the Department of Defense (DoD) EHR contract that’s being bid on right now, check out our post about the $11 billion EHR contract. Yes, you’re reading that right. That’s $11 billion with a B. I believe that would be the largest single EHR contract ever (I believe Kaiser was $4 billion to start).
Needless to say, this is an enormous contract that will make some outside companies very rich. I can’t even imagine what $11 billion of EHR consultants and software would look like. That’s a lot of EHR jobs to go around, but I digress.
Most people in the industry seem to believe that Epic is the front runner in the race. Considering the number of large deals that Epic has won, Epic winning the DoD EHR contract would be a safe bet. Although, I wonder if the best thing for Epic would be for them to not win the DoD contract.
Sure, Epic would take a short term PR hit if someone else like Cerner wins the DoD contract. You can already predict the press headlines talking about the fall from power as Epic loses to Cerner (similar to when Cerner won the Intermountain deal over Epic). That would have some damage to Epic’s reputation, but not really. It’s not like any other hospital in the US thinks that their contract would be anything like the DoD EHR contract. In fact, many of the hospitals purchasing Epic EHR will be grateful that Epic resources aren’t being tied up on a new $11 billion contract while their “small” $100 million EHR project languishes.
Indeed, the best thing for Epic might be for it to NOT win the DoD EHR contract. Let’s remember that Epic has a really good history of successful EHR implementations. Sure, there are a few examples where the Epic implementation hasn’t gone so well. However, I think the general view of the industry is that Epic implementations generally go well. In fact, there are stories of Epic contracts so stringent that when an Epic implementation starts to go bad, Epic comes in and takes over to make sure that the implementation goes well.
Long story short, Epic has the best reputation of any hospital EHR vendor when it comes to successful EHR implementations (especially large ones). Epic winning the DoD EHR contract could do a lot to tarnish that reputation.
One might argue that if Epic’s successful with the $11 billion DoD EHR contract, that it will be a boon to their current reputation. That’s fair, but the DoD EHR implementation would be unlike most other EHR implementations. First, the DoD doesn’t have a sterling reputation for successful healthcare software projects. That will likely become an issue for anyone who wins the contract. Second, we’re talking about a government entity with layers of red tape and bureaucracy. A small company like Epic (small in government contractor terms) isn’t going to carry the same weight as they usually do in their other hospital EHR implementations. Epic, the control company, won’t be able to control the DoD EHR project the same way they usually do.
One could use the same argument I used above about why even if Epic gets the DoD contract and fails, it won’t tarnish their reputation since hospitals realize that the DoD is unique. However, the difference between losing a bid and a failed $11 billion project is very different. The failed DoD EHR bid will be covered once and then generally forgotten. A failed $11 billion contract can carry on for years as timelines are delayed, budget overruns are reported, discontent leaks out, he said-she said occurs, and the media churns and speculates on what’s happening with the DoD EHR project.
We all think that winning an $11 billion contract would be great. Indeed, that’s a lot of money and would be an enormous win worth celebrating. The only question is how long will the celebration continue? If I’m Epic, I wouldn’t be too sad if I didn’t win the contract. In the long term, it might be for the best.