Reflecting on Health Reform: A Tale of Two IT Procurements

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Last week, the president of the United States, the most powerful person on earth, the man whose finger rests on the nuclear button, struck a bold blow for . . . procurement reform?

"There are a whole range of things that we're going to need to do once we get [the Affordable Care Act (ACA) rollout] fixed—to talk about federal procurement when it comes to IT and how that's organized," the president said on November 4, speaking to a group of donors and supporters.

People are clamoring for heads to roll, and the president is talking about what just could be the geekiest, most obscure topic ever to clog a federal bureaucrat's inbox. Procurement reform? Has he gone off the deep end?

Well, not really. Among the causes of healthcare.gov's difficulties, the federal process for purchasing goods and services could rank right up there with toxic politics, lack of funding for ACA implementation, and management goofs. Let me explain why, from personal experience.

From 2009 to 2011, I served as National Coordinator for Health Information Technology. My job was to implement the HITECH ACT, which aims to create a nationwide, interoperable, private, and secure electronic health information system. As national coordinator I had to let a lot of federal contracts.

This is how that went.

Our staff would decide what services we needed, write a request for proposals (RFP), and send it off to a totally independent contracting office. That office could be within the Department of Health and Human Services (DHHS), but if the DHHS office was too busy, the RFP could go almost anywhere: the Department of the Interior, the Department of Housing and Urban Development, the Department of Education—whatever contracting office had time to process the work. Officials extensively trained in the details of federal procurement, but lacking familiarity with our programs or field of work, would put the RFP out to bid. An expert panel—over which we had minimal control—would evaluate the responses. Months later, the contracting office would present us with the signed contract.

The winner was usually picked from a group of companies with considerable experience working the federal procurement process. If we weren't happy with the firm, or with their later performance, there was virtually nothing we could do about it. Getting out of this shotgun marriage meant months of litigation, during which the funds would be frozen and the work itself would grind to a halt.

After I left the federal government, I became Chief Health Information and Innovation Officer at Partners Health System, a large, Harvard-affiliated integrated health system in Boston. There, I was responsible for managing another procurement: the choice of a new electronic health record (EHR) for the organization's many hospitals, clinics, and clinicians. This was one of the largest capital projects in Partners' history. The experience was very different.

I led an expert team of clinicians, IT professionals, financial analysts, clinical managers, materials management professionals, and external consultants who spent months comparing the EHRs and companies that were finalists in our selection process. The vendors' CEOs and senior leadership met with our CEO and senior leadership to get a sense of whether there would be mutual rapport and trust. To see the EHRs in action, we visited other customers who were using the products. The vendors came to Partners and demonstrated their EHRs to hundreds of clinicians, IT professionals, and managers, who then voted on which they preferred.

That's not all. A Partners team visited their headquarters and interviewed their key staff. Our technologists and programmers consulted with theirs to assess in detail their skill and vision for their product. We evaluated the companies' culture, financial plans, and likely stability over time. After we selected a leading candidate, we spent weeks going over the contract line by line with IT professionals, lawyers, and contracting experts.

The Partners' procurement process may not be perfect, but the federal process is clearly broken. I have no personal knowledge of how it worked in the case of the federal website, but I can't imagine that it was up to the task of managing the subtle, technologically complex, and unprecedented challenge of putting together a consumer-friendly website that would seamlessly connect multiple legacy state and federal databases that were never designed to work together.

Why is the federal procurement process so dysfunctional? Mostly because the public seems not to trust government officials. The process is designed to protect against conflict of interest and fraud. When faceless, interchangeable contracting officers manage the process behind closed doors, companies find it difficult to cozy up to federal officials for the purpose of influencing outcomes. There is something to be said for these boundaries when it comes to routine procurements such as furniture, transportation services, maintenance, and cleaning. But when it comes to the incredibly complex technical work that is required in the IT space, a process in which the people overseeing a project don't have a chance to interact with potential vendors in advance is a prescription for the kind of problems we are now witnessing with healthcare.gov.

Does this mean that the federal government is incapable of managing complex IT projects? Not at all. In our military and intelligence, we have information technology capabilities that amaze the world. Their consequences, for good and ill, now rival healthcare.gov for time and space in the American media.

President Obama is absolutely right: the federal government can and should do better in IT procurement, at least in the domestic arena. In the information age, this is a core capability for government at all levels. And given the entrenched nature of the current process, it may take an order from the commander in chief to get meaningful reform under way.

Read other posts in David Blumenthal's "Reflecting on Health Reform" series:

The Presidential Health Care Curse: Why Do They Bother?

The Marketplace Experience: Month One

Buckeye Bellwether?

Two Weeks in October

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