IBM Partners with Epic in Battle for Pentagon’s Multibillion-Dollar EHR Deal

JuliusKielaitis /

Big blue and a leading EHR provider join forces to compete for the $11 billion Defense Department’s Healthcare Management Systems Modernization contract.

IBM has teamed with electronic health records provider Epic to compete for the Defense Department’s Healthcare Management Systems Modernization contract expected to be bid out this summer, with an expected value of approximately $11 billion.  

IBM and Epic have been collaborating for months in preparation for the contract, and becoming the first systems integrator and EHR provider to formally announce a partnership highlights IBM’s aggressive efforts in the health care market. Big Blue has been bold in highlighting its important federal healthcare hires in recent months, and the company’s partnership with Epic, whose software is used by private sector health care leaders such as Johns Hopkins Medicine and Kaiser Permanente, solidifies it as a major contender for the upcoming DHMSM.

“Our collaboration with Epic for DHMSM was a natural extension of our global partnership,” Andy Maner, managing partner at IBM U.S. Federal, said in a statement. “Together, we understand that we must step forward and bring our best to improve health outcomes for those who proudly serve our nation. Improving quality of care and reductions to the overall costs for our military will be our primary goal. This is going to require bringing a physician’s mindset, proven past performance and a commitment to innovation.” 

The partnership is likely to turn heads inside the Beltway community and in the broader health care arena. IBM will compete as the prime for DHMSM, with contenders likely to include defense contractors such as Lockheed Martin, Northrop Grumman and other large integrators including Accenture, who was recently picked to take over development of 

Those companies have yet to formally disclose their partnerships, but well-known EHR providers such as Cerner Corp. and Allscripts are potential candidates. EHR vendors will be a key component of any DHMSM deal, in part because DOD procurement officials continue to stress the need for interoperability between health records systems. While it’s still uncertain whether the DHMSM procurement will allude at all to interoperability with the Department of Veterans Affairs’ EHR system, it is certainly a possibility.

What is evident, however, is that data gaps and other issues arise under DOD’s current health records system, the Armed Forces Health Longitudinal Technology Application, for more than half of DOD’s nearly 10 million beneficiaries who venture outside the DOD network.

In any winning bid, DOD will want to see a commercial solution with a proven track record of scalability and interoperability as it looks to modernize its systems. Other attractive components are likely to include analytics, given that as much as 85 percent of the data contained within EHRs are unstructured.

“Service members, their families and the health care providers who care for them deserve the best technical infrastructure and tools available,” said Carl Dvorak, president of Epic. “We would be honored and humbled to be part of a solution to modernize the MHS support of their mission to provide our warfighters with the best, most convenient and timely care possible. In collaboration with IBM, we can provide a rapid and successful implementation that will support innovation, interoperability and leadership within military health care for decades to come.” 

Interest in DHMSM has been high, with large turnouts at several industry days and others scheduled for June 25. The RFP is expected to be released mid-summer. 

(Image via JuliusKielaitis /