Analysis

HHS outlines lofty cloud plans despite IT budget squeeze

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If you want a bellwether for IT spending across federal civilian agencies, a good starting point just might be the Department of Health and Human Services.

The largest civilian agency in the federal government, HHS budget drivers are focused on getting the best use of both public and private cloud services. Both the Centers for Medicare and Medicaid Services and the Food and Drug Administration will be expanding cloud use.

Additionally, Platform-as-a-Service cloud applications will play a role in data- and information-sharing at the National Institutes of Health, and data analytics is expected to improve quality measurement. Other cloud and web services will be focused on providing customer service and enhancing the user experience overall.

Despite these lofty goals, however, the actual IT budget at HHS has been steadily decreasing.

How a huge but shrinking IT budget is allocated

The fiscal year 2017 IT budget for HHS is $12.1 billion, with 70 percent of that directed to CMS.

The remainder of the FY17 HHS budget goes to:

  • The National Institutes of Health (7 percent)
  • The Food and Drug Administration (6 percent)
  • The Centers for Disease Control and Prevention (4 percent)

What's left (some 13 percent) is distributed across all other HHS activities. The department will be looking less at brand new initiatives than on continuing to support the programs it has already funded.

The shift away from development, modernization and enhancement funding to steady state funding is in keeping with trends elsewhere across the government, and is a major contributing factor to HHS's move to the cloud. To help control costs, infrastructure spending at agencies like CMS and FDA is moving more into centralized, hybrid cloud-based environments.

To get a better idea of where money will be spent on IT, let's drill down for a closer look.

Data analysis for better hospital care

The funding request for CMS' Hospital Quality Reporting is down slightly to $97.8 million in FY17, from $98.2 million in FY16. A program developed through the Development Environment Consolidation Contract, HQR uses various tools to stimulate and support improvements in health care quality by distributing objective, easy-to-understand hospital performance data.

The HQR program is aimed at, among other things, streamlining the design, development, operation and maintenance of four different information technology systems that support the Health Care Quality Information System.

HQR is a wide-ranging program, composed of six different components, with ongoing requirements for data integration, analytics and public-facing visualization. Roughly 40 percent ($39.1 million) of the budget request is committed to steady state funding, as opposed to new development.

Patient care gets a funding boost

Unlike many other IT initiatives in the current budget, CMS' Physician Quality Reporting Systems has actually seen an increase -- to $71 million in FY17, up from $65.7 million in FY16.

PQRS focuses on the ongoing development of physician data collection and reporting capabilities, giving individuals and groups the opportunity to assess the quality of care they provide to their Medicare patients and helping to ensure that patients get the right care at the right time.

Steady state funding accounts for $28.4 million of the overall budget request, leaving more than $42 million for the development of new projects to support the initiative.

Plans for growth in data submission

FDA's Regulatory Submission Receipt and Analysis System also has seen an increase in funds, although modest; the program's budget is up to $24.3 million in FY17, from $22.8 million in FY16.

The money would support the development, implementation and operation of electronic submissions to the Center for Tobacco Products, as well as its current and future business processes and automation needs.

Right now, the focus of the program is on eSubmission -- enabling capture, tracking management and archiving of tobacco-related information. The organization is using agile software development to enable commercial off-the-shelf products to be introduced at any point in the development cycle.

Only $3.2 million of the more than $24 million allocated for this program is to be directed at steady state purposes. The rest will be used to fund development and modernization initiatives.

This snapshot of sample programs across HHS hints at how the agency hopes to use cloud technology to improve customer care and service as a way to address a decreasing IT budget overall. Whether the cloud can truly help meet those goals despite cost-cutting measures at the agency remains to be seen.

About the Author

Chris Wiedemann is a Senior Analyst with immixGroup, focusing on HHS. He can be reached at Chris_Wiedemann@immxgroup.com

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