Last week, President Donald Trump signed an executive order aimed at overhauling the federal government’s outdated IT systems.
His latest EO got little more than a passing mention, in part because it was drowned out by the raucous celebratory sounds coming from the Rose Garden following the passage of the American Health Care Act (AHCA) in the House.
Unlike a number or Trump’s other EOs, this one was much less controversial. IT has been a target for past presidents, including Barack Obama, who sought to establish a $3.1 billion Information Technology Modernization Fund last year that would enhance cybersecurity and improve efficiency.
You’d be hard-pressed to find someone that would argue against upgrading the federal government’s often shockingly outdated IT systems. A report (PDF) issued by the Government Accountability Office last year noted that the Department of Defense uses 8-inch floppy disks in a legacy system that “coordinates the operational functions of the United States’ nuclear forces.”
For a sizable portion of the American population, a floppy disk would be met with a perplexed stare.
The primary function of the EO was to create the American Technology Council, led by Trump, which includes leaders from several high-profile federal departments except one: The Department of Health and Human Services.
But HHS is arguably in need of the most attention, especially considering the agency’s IT spending is more than the Department of Homeland Security and the Department of Veterans Affairs combined.
Since 2011, HHS’s IT budget has nearly doubled from $6.6 billion to $12.6 billion in 2016. According to a report authored by IDC Government Insights in October, that spending is expected to remain steady through 2020.
By far the biggest line item in that budget is the Medicaid Management Information System, overseen by Centers for Medicare and Medicaid Services (CMS), which reached nearly $7 billion in 2015 and is expected to hit $6.5 billion in 2017. That dwarfs two IT systems in the VA—an agency that has been harshly criticized for its IT expenditures—that clock in at a combined $2 billion.
The reason the Medicaid Management Information System is so expensive is because it includes grant money siphoned off to states to update their Medicaid systems, which, as you might expect, is incredibly complicated. So, the system itself is not as much of a money pit as the budget might suggest—but the ability to get state systems to interact with the federal system is driving up those costs.
There could be cheaper alternatives, according to Shawn McCarthy, research director at IDC Government Insights, who authored the October report. Moving the system to the cloud and forcing states to get on board by paring down that grant money could be one approach, but he noted that even that kind of decision could come with a slew of other complexities, not to mention a significant initial investment.
McCarthy didn't want to weigh in on whether HHS should be part of Trump’s new IT council, but he admitted the CMS system sticks out like a sore thumb.
“All I can say is if you have something that is the single largest line item in the IT budget, that probably should be paid attention to,” McCarthy told FierceHealthcare.
Trump’s EO offers some room for involvement from other federal agencies, noting that agency leaders may be invited “on a rotating basis.” Certainly, that could include HHS Secretary Tom Price or any other member of the IT administration (HHS did not respond to a request for comment). But given the annual price tag tied to HHS IT systems, it’s perplexing, and a bit concerning, that they don’t have a permanent seat at the table.