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GAO releases report on inmate cell phone contraband- pushes for better evaluation methods

Earlier this month, the Government Accountability Office (GAO) released a report titled "Bureau of Prisons (BOP) - Improved Evaluations and Increased Coordination Could Improve Cell Phone Detection." This report detailed the nation's current state of cellular telephone detection and provided recommendations to curb this type of contraband in prisons. The GAO gathered information from eight states currently working to detect and deter cell phone contraband, including California, Florida, Maryland, Mississippi, New Jersey, New York, South Carolina, and Texas.

The total number of cell phones confiscated from these eight states in 2010 was more than 22,000; 10,000 of which were from California prisons alone. This is nearly a 30 percent increase from 2009. The GAO also found that minimum security institutions (prison camps) were more likely to see cell phone contraband (nearly 77 percent of all contraband found), while higher level security institutions saw only 23 percent of the total. To combat this, the BOP and the eight states have all taken steps to deter cell phone contraband. Currently, there are three options for prisons to test: jamming (currently illegal according to the Communications Act of 1934), managed access, and detection. However, the BOP has not developed evaluation plans to measure the success or failure of these systems. According to the report, there are some institutions that are more eager than others to test this new technology. Below are the advantages and disadvantages of each technology according to the National Telecommunications and Information Administration (NTIA).

Jamming:

  • Jamming could potentially cause interference to cell phone signals outside of a prison institution, unless properly designed.
  • Jamming interferes with 911 and authorized calls and violates the Communication Act of 1934 when performed by nonfederal entities.
  • Implementation costs vary with the complexity of the prison site.

Managed Access:

  • Managed access systems have the potential to cause interference outside of the prison or to adjacent bands unless properly designed.
  • These systems permit 911 and known authorized calls, but require FCC approval and carrier consent.
  • Costs can vary based on the complexity of the prison site.

Detection:

  • Detection systems are "passive" in that they do not transmit signals, and thus do not cause interference to phone calls.
  • Such systems protect 911 and authorized calls and, unless used for data gathering for law enforcement intelligence, raise no regulatory or legal issues.
  • Costs can vary based on the complexity of the prison site and sophistication of the technology used (e.g., simple hand-held devices would involve a lower cost than a prison-wide sensor-based detection system).

The conclusions of the report were that the BOP needs to formulate a well-developed evaluation method for each of these technologies to better understand their effectiveness. On top of that, the BOP has the opportunity to leverage information from current pilot states as a way of boosting information sharing. The GAO recommends that the Office of Security Technology (OST) formulate an evaluation plan for testing these technologies as well as develop a policy requiring regions and institutions to apply OST's evaluation plans when testing a technology. The GAO also recommends that states leverage the resources of each other to better share information on the effectiveness of these technologies.

Analyst Take:

The market for cell phone detection is at its very early stage. With laws such as the Communications Act of 1934, prisons are forced to look outside of the boundaries of simple call jamming. Instead, institutions will need to look into more advanced control mechanisms for outgoing cell phone communications. States such as Mississippi, Maryland, and California have all begun or completed the procurement process for these new technologies. So far, the most common theme is managed access since that offers the most complete solution given current law and prison complexities. It is estimated that successful programs in these "pilot" states will result in more acquisitions down the road. With correctional spending (bricks and mortar) at its highest, correctional officials are more hesitant to seek new and untested technologies. The same can be said about their hesitation toward new programs that don't reduce inmate population. Vendors need to keep this in mind when proposing solutions to prisons.

Part two: Combined state health care and social services budgets, IT, and major opportunities

By Chris Cotner, Kate Tussey, Amanda White, Stephen Moss, and Aila Altman .

This is part two of a two-part series on combined state health care and social security budget and IT projections. To read part one of the series, click here. With our modeling, Deltek was able to provide a picture of projected budgets for individual states (California, Pennsylvania, Ohio, Illinois, Michigan, New Jersey, Tennessee, Colorado, Louisiana, South Carolina, Kentucky, West Virginia, Montana, and Wyoming). Actual reported IT budgets for these same states are listed below in table 3. Below that, Deltek Information Solutions (GovWin) State and Local Health Care and Social Services team members offer analysis of upcoming HC and SS IT initiatives and projects in each of the states identified above.

Table 3: State Health Care and Social Security IT Combined Budgets FY 2010 – 2013


Click to View Full Size

California
Analysis provided by Amanda White

Health care: The California Health and Human Services Agency is embarking on several IT modernization/implementation projects. The state recently received $39.4 million in federal funding from the Level I Establishment Grant for implementation efforts revolving around a future health insurance exchange (HIX). The state will also be applying for Level II Exchange Grant funding in spring 2012. The state Department of Health Care Services (HCS) may be procuring for Medi-Cal Eligibility Data System (MEDS) modernization services. HCS is proposing to modernize its enrollment processes to ensure secure, efficient, and maintainable business processes.

Social services: The state of California Health and Human Services Agency (CHHS); California Department of Social Services (CDSS); California Department of Health Care Services (CDHCS); Statewide Automated Welfare System (SAWS) Consortium IV (C-IV) Joint Powers Authority (JPA); and California Office of Systems Integration (OSI) are in the process of procuring maintenance and operation services for the C-IV system. The system is currently operated through four consortia: Interim Statewide Automated Welfare System; Los Angeles Eligibility, Automated Determination, Evaluation and Reporting (LEADER); Welfare Client Data System (WCDS); and C-IV. The California Public Health Department also plans to solicit for a Women, Infant and Children (WIC) electronic benefit transfer (EBT) system. The department will be conducting a planning and feasibility study for the future system.

California upcoming and current major procurement opportunities:

  • GovWin Tracked California Opportunity A: The state will be procuring for system implementation services for their HIX.
  • GovWin Tracked California Opportunity B: The state may be procuring for Medi-Cal MEDS modernization services.
  • GovWin Tracked California Opportunity C: The state plans to procure for Maintenance and Operations of their C-IV System; however a timeline for its releases has not been determined.
  • GovWin Tracked California Opportunity D: The California Department of Social Services released an RFP for a technology solution for a new Child Welfare Services/Case Management System (CWS/CMS), but cancelled the solicitation in June 2011. The Department is unsure as to whether another RFP will be released-if so, it will not be for at least two years.
  • GovWin Tracked California Opportunity E: The state plans to procure for WIC EBT Services. An RFO is expected to be released for planning/feasibility, however there has been back-log at the contracts office, and as a result, has not been reviewed or approved yet.

Pennsylvania
Analysis provided by Stephen Moss

Health care: The Department of Insurance awarded a contract to a planning vendor to assist Pennsylvania in the development and implementation of an HIX. As with many states, Pennsylvania will have a future requirement for an implementation vendor for the exchange. Pennsylvania will also have an upcoming requirement for a vendor to provide external quality reviews of managed care organizations. Social services: The Department of Public Welfare will be releasing solicitations in the near term to implement EBT for the WIC program. These solicitations will include a implementation support and project management vendor, independent verification and validation (IV & V), and claims file processing.

Pennsylvania upcoming and current major procurement opportunities:

  • GovWin Tracked Pennsylvania Opportunity A: Will procure for vendor support for HIX implementation.
  • GovWin Tracked Pennsylvania Opportunity B: Will release a request for proposal (RFP) for Medical Assistance External Quality Reviews, HEDIS Validation, and Quality Performance Measure Development and Validation for managed care and long term care organization.
  • GovWin Tracked Pennsylvania Opportunity C: Will require a vendor to implement the WIC EBT system.
  • GovWin Tracked Pennsylvania Opportunity D: Will require a Implementation Support and Project Management vendor for the WIC EBT implementation.
  • GovWin Tracked Pennsylvania Opportunity E: Will require vendor support for IV & V of the WIC EBT system.
  • GovWin Tracked Pennsylvania Opportunity F: Will have a requirement for Claims File Processing for the WIC EBT system.

Ohio
Analysis provided by Kate Tussey

Health care and social services:Ohio was one of the election states this past year, which ended the Health Care Coverage and Quality Council that had been tasked with planning for the HIX. The state will also be looking to re-procure for pharmacy benefit management (PBM) services, hiring a consultant to assist with RFP writing in April 2011. Ohio, like Michigan, is overdue in releasing an RFP for EBT services, and is currently in the process of planning for WIC EBT services.

Ohio upcoming and current major procurement opportunities:

  • GovWin Tracked Ohio Opportunity A: Ohio is utilizing a consultant to assist with its PBM procurement.
  • GovWin Tracked Ohio Opportunity B: The Department of Insurance is currently planning the Ohio HIX.
  • GovWin Tracked Ohio Opportunity C: The state needs to re-procure its EBT contract.
  • GovWin Tracked Ohio Opportunity D: The Department of Health will be implementing EBT in the WIC program.

Illinois
Analysis provided by Kate Tussey

Health care: At a time when resources are tight and demands are high, Illinois is deep in the process of procuring, replacing, or revolutionizing several of its major systems, including its Medicaid Management Information System (MMIS) and the Illinois Health Information Exchange (ILHIE). ILHIE will be embracing the cloud, while the MMIS project is anticipated to deploy a module-by-module replacement strategy. This is all occurring alongside the planning of Illinois' HIX, which was just awarded a $5.1 million Exchange Establishment Grant.

Social services: Illinois, like several other states, is struggling to meet an increasing demand for services at a time when resources to meet those demands are limited. The state depends on several legacy systems that are not flexible enough in this increasingly digital world. Instead of utilizing the piecemeal upgrade approach of the past, Illinois is currently undergoing a major planning effort to revolutionize the way it provides benefit service delivery to its citizens. The Department of Human Services, Department of Employment Security, Department of Healthcare and Family Services, Department of Aging, and Department of Children and Family Services will be designing and implementing a truly enterprise-wide solution to achieve an integrated human services delivery system. This effort will take several years to complete.

Illinois upcoming and current major procurement opportunities:

  • GovWin Tracked Illinois Opportunity A:The state plans to replace its MMIS.
  • GovWin Tracked Illinois Opportunity B: The state is currently reviewing proposals and anticipates an award in October 2011 for ILHIE.
  • GovWin Tracked Illinois Opportunity C: The state received $5.1 million to plan and implement its HIX.
  • GovWin Tracked Illinois Opportunity D: Currently soliciting proposals for the FY2012 Illinois Human Services and Healthcare Framework in support of the integrated human services delivery system.
  • GovWin Tracked Illinois Opportunity E: Will be soliciting for vendors for the design, development, and implementation of the Integrated Human Services Delivery System.
  • GovWin Tracked Illinois Opportunity F: Will have a need for an Integrated Eligibility System to coordinate HIX, Medicaid, Supplementation Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF) eligibility and determination.

Michigan
Analysis provided by Kate Tussey

Health care: The state is close to wrapping up one major health care IT project while embarking on planning for another. The Michigan Health Information Network (MiHIN) Shared Services is a nonprofit corporation in charge of procuring a vendor for the first phase of the HIX. The contract award is estimated to be announced soon. Michigan will be looking to create a suite of services that can be utilized to connect Michigan's sub-state HIEs and other data sources together for statewide communication. Next month, the Governor is expected to recommend the structure for the state HIX to the legislature, with anticipated approval by December 2011.

Social services: While the Department of Community Health is working on major health care reform projects, the Department of Human Services (DHS) seems to be moving along with business as usual. DHS is working on the upcoming rebid of its EBT contract, which supports the SNAP, TANF, and WIC program. The state will also be looking to rebid its new hire reporting services contract in the future.

Michigan upcoming and current major procurement opportunities:

  • GovWin Tracked Michigan Opportunity A: The state will be procuring for HIX services.
  • GovWin Tracked Michigan Opportunity B: The MIHIN Shared Services is close to announcing an award for the Michigan Health Information Network.
  • GovWin Tracked Michigan Opportunity C: The state is currently working on a RFP for EBT services.
  • GovWin Tracked Michigan Opportunity D: The current contract for New Hire Reporting Services expires in January 2012.

New Jersey
Analysis provided by Stephen Moss

Health care: New Jersey is in the midst of planning for the New Jersey Health Information Network (NJHIN). This single state-level HIX will enable the exchange of vital health care information from disparate community HIXs. As part of this planning, the New Jersey Department of Health and Senior Services (DHSS) released a request for information (RFI) in July 2011. As with many other states, New Jersey is knee-deep in planning activities for the development and implementation of its HIX. In August 2011, the Department of Banking and Insurance released a request for quotation (RFQ) for a HIX gap analysis. Information obtained from that analysis will inform any future implementation.

Social services: The Department of Health and Senior Services has identified the replacement of the current WIC Automated Client Centered Electronic Service System (ACCESS) as a top priority in the next two years. The current system, ACCESS, has reached the end of its useful life cycle. The incumbent contract for maintenance and operations of ACCESS will be rebid prior to the replacement of ACCESS.

New Jersey upcoming and current major procurement opportunities:

  • GovWin Tracked New Jersey Opportunity A: Evaluating RFI responses for the NJHIN.
  • GovWin Tracked New Jersey Opportunity B: May have a requirement for vendor support for the Master Patient Index.
  • GovWin Tracked New Jersey Opportunity C: Currently evaluating responses received for HIX Gap Analysis.
  • GovWin Tracked New Jersey Opportunity D: Will have a future need for a HIX Implementation vendor.
  • GovWin Tracked New Jersey Opportunity E: Will procure to replace the WIC ACCESS system in the next two years.
  • GovWin Tracked New Jersey Opportunity F: Will rebid the incumbent WIC ACCESS Maintenance and Operations contract.

Tennessee
Analysis provided by Aila Altman

Health care:While Tennessee is currently operating a fairly new MMIS, much of the state's health IT efforts are focused on the planning and development of a statewide HIX. The state will likely collaborate with an outside vendor for exchange planning efforts, development, and implementation. The Tennessee Department of Health is also nearing a final award for a replacement of its vital records information system.

Social services: The Tennessee Department of Human Services (DHS) is in the midst of modernizing or planning to modernize many of its social services IT systems, including its unemployment insurance (UI) benefit system, child support payment system, and automated child support enforcement system. DHS recently selected a vendor to provide EBT services in support of SNAP and TANF.

Tennessee upcoming and current major procurement opportunities:

  • GovWin Tracked Tennessee Opportunity A: The Tennessee Department of Health is in the midst of awarding the Vital Records Information System Management (VRISM) contract. An intent to award was issued to ManTech International Corporation.
  • GovWin Tracked Tennessee Opportunity B: The Tennessee Center for Consumer Information and Insurance Oversight has identified a potential need for HIX Information Technology Technical Assistance.
  • GovWin Tracked Tennessee Opportunity C: In conjunction with the need for technical assistance, the Tennessee Center for Consumer Information and Insurance Oversight is beginning to develop a project plan and draft budget for the state's HIX. The state will likely seek a vendor for the development, implementation, and operation of the exchange.
  • GovWin Tracked Tennessee Opportunity D: Hewlett-Packard (HP) currently provides the state with the TennCare (Medicaid) Management Information System. As this contract approaches its expiration in June 2013, the state will likely issue a re-bid solicitation.
  • GovWin Tracked Tennessee Opportunity E: Currently selecting a vendor to provide Electronic Access Card Services in support of child support payments and unemployment insurance payments.
  • GovWin Tracked Tennessee Opportunity F: Recently issued a Request for Information (RFI) for UI Modernization Development and Support for the Southeast Consortium, which includes Tennessee, North Carolina, South Carolina, and Georgia.
  • GovWin Tracked Tennessee Opportunity G & H: Planning to solicit vendors for the design, development, and implementation of an Automated Child Support Enforcement System, which will include the functional levels of case, location, legal, and financial processing related to the child support program. The state will also seek vendors for Independent IV & V in support of the Automated Child Support Enforcement System.

Colorado
Analysis provided by Amanda White

Health care: The Colorado Department of Health Care and Policy Financing is embarking on a few major projects. The state is currently undergoing heavy planning for a future health benefit exchange. The Colorado Health Insurance Exchange Board (COHIEX) recently released draft planning/implementation outlines for the exchange. The state will also be procuring for MMIS fiscal agent services. Public Knowledge, LLC is currently performing MITA self-assessment and MMIS reprocurement RFP writer services.

Social services: The Colorado Department of Labor and Employment is undergoing an assessment of their UI Internet Self Services (ISS) project to decide what processes are working well and what changes/improvements need to be made for technology. The state's Public Health and Environment Department is currently working with Maximus on an EBT Feasibility study, IAPD and RFP. The contract is expected to run through the summer of 2012.

Colorado upcoming and current major procurement opportunities:

    GovWin Tracked Colorado Opportunity A: The state will be procuring for system implementation services for their health benefit exchange.
  • GovWin Tracked Colorado Opportunity B: The state plans to procure for MMIS Fiscal Agent Services.
  • GovWin Tracked Colorado Opportunity C: The state plans to procure for IV&V Services for their MMIS System.
  • GovWin Tracked Colorado Opportunity D: The state may solicit for UI ISS technology services. The state released an RFP for an independent assessment of the UI ISS project; proposals were due in June 2011.
  • GovWin Tracked Colorado Opportunity E: The timeline for the release of the solicitation for EBT Services has not been determined. Once the feasibility study is complete, the state will know what additional services are needed for the system.

Louisiana
Analysis provided by Aila Altman

Health care: Louisiana is focusing much of its healthcare reform efforts on the state's Medicaid program. The state spent time battling protests regarding the selection of a vendor for the MMIS Replacement and Fiscal Intermediary Services contract. The Department of Health and Hospitals (DHH) is tentatively planning to replace its Medicaid Eligibility Data System (MEDS), pending approval of plans by the federal government.

Social services: Louisiana is currently in the process of selecting a vendor for maintenance and support of the Department of Children and Family Services (DCFS) Information Technology (IT) system, in its entirety. In conjunction, the state is selecting a vendor to provide quality assurance services for the modernization of the human services data processing systems throughout the state. Additionally, upon expiration of the current contracts, the state will likely rebid many of its fundamental social services contracts.

Louisiana upcoming and current major procurement opportunities:

  • GovWin Tracked Louisiana Opportunity A: The Louisiana Department of Health and Hospitals (DHH) Medical Vendor Administration, Program Integrity Section released a request for information (RFI) for a Recovery Audit Contractor (RAC) for Post Payment Identification and Recovery of Improper Medicaid Claims. The Department is currently evaluating responses submitted for the RFI.
  • GovWin Tracked Louisiana Opportunity B: The Louisiana Department of Health and Hospitals (DHH) is currently drafting the Advanced Planning Document (APD) for a replacement MEDS, which will require the approval of the Centers of Medicare and Medicaid Services (CMS). The Department released a RFI for the MEDS Information Technology Architecture Upgrade in February 2011.
  • GovWin Tracked Louisiana Opportunity C: The Louisiana Office of State Purchasing is currently in the midst of negotiations with CNSI, Inc. for the MMIS Replacement and Fiscal Intermediary Services contract.
  • GovWin Tracked Louisiana Opportunity D: The Louisiana Department of Children and Families (DCFS) plans to issue a solicitation for the continued operation of the Statewide Automated Child Welfare Information System (SACWIS), entitled Tracking Information and Payment System (TIPS). Due to budgetary constraints, the state has continually had to delay the release of a request for proposals (RFP) for TIPS.
  • GovWin Tracked Louisiana Opportunity E:The Louisiana DCFS may have a requirement for a Centralized Collection Unit (CCU) to support the collection and distribution of child support payments. The current contract is set to expire in August 2012. The Department will likely exercise the available option year and will re-bid the contract before the August 2013 expiration.
  • GovWin Tracked Louisiana Opportunity F: Louisiana is currently evaluating proposals submitted for the DCFS Information Technology (IT) Infrastructure Maintenance and Support RFP, which encompasses network, application, operating system, database, security support, and administration.

South Carolina
Analysis provided by Aila Altman

Health care: Like many states, South Carolina is focusing many of its resources on revamping the states' Medicaid program. South Carolina's efforts to modernize Medicaid are coming full circle, starting with the MEDS to the replacement of its MMIS.

Social services: South Carolina has been active in Medicaid reform activities, with the release of a request for information (RFI) for the replacement of the state's Medicaid system, which also encompasses the development of a multi-agency eligibility system that will cover Medicaid eligibility along with eligibility for various social services programs. The state will also continue to operate EBT services for a variety of social services programs.

South Carolina upcoming and current major procurement opportunities:

  • GovWin Tracked South Carolina Opportunity A: The South Carolina Department of Health and Human Services (SCDHHS) released a Request for Information (RFI) for the MMIS Replacement.
  • GovWin Tracked South Carolina Opportunity B: In conjunction with the Replacement MMIS contract, SCDHHS will likely issue a solicitation for a MMIS IV & V vendor.
  • GovWin Tracked South Carolina Opportunity C: Based on the request for information (RFI) released by the South Carolina Department of Health and Human Services (SCDHHS), the state may have a requirement for a multi-agency eligibility system to replace the current MEDS.
  • GovWin Tracked South Carolina Opportunity D: The South Carolina Health Planning Committee has begun meeting to discuss the feasibility of establishing a statewide HIX and may require a vendor's assistance by way of a HIX Planning Services contract.
  • GovWin Tracked South Carolina Opportunity E: Upon expiration of the current contract in January 2013, the South Carolina Department of Information Technology Policy and Management will likely procure for the operation of EBT services in support of the following programs: Food Stamp, Family Independence (FI), Child Care, Child Support, and Foster Board and Adoption Subsidy Payments.
  • GovWin Tracked South Carolina Opportunity F: The South Carolina Department of Health and Environmental Control may issue a solicitation for the operation of the WIC Vendor Management System, for which the current contract will expire October 30, 2013.

Kentucky
Analysis provided by Aila Altman

Health care: The Commonwealth of Kentucky has been actively working to upgrade and/or replace many of its legacy healthcare information technology (IT) systems, particularly many components of the Medicaid system. Kentucky also received a substantial federal funding for the development of a HIX to serve the residents of the Commonwealth.

Social services: In its draft 2012-2018 Capital Improvement Plan (CIP), the Commonwealth of Kentucky outlined tentative plans to modernize social service efforts, including the development of a portal for residents to electronically apply for a range of human services programs. The commonwealth also hopes to enhance its background check system for elderly caretakers and has received federal grant funding for such an effort. Kentucky also has plans to re-bid for many of its fundamental social services programs.

Kentucky upcoming and current major procurement opportunities:

  • GovWin Tracked Kentucky Opportunity A: On August 12, 2011, Kentucky received a $7.6 million Level One HIX grant. Kentucky will use the grant to continue HIX planning efforts, including defining information technology (IT) requirements, procuring an IT planning vendor, and assisting with the development of a request for proposals (RFP) for procurement of IT upgrades and/or new systems.
  • GovWin Tracked Kentucky Opportunity B: The Kentucky Cabinet of Finance and Administration released a request for information (RFI) in January 2011 for a Capitated Pharmacy Management Program, which would provide an innovative and robust patient-centered pharmacy management program for the Department of Medicaid Services (DMS).
  • GovWin Tracked Kentucky Opportunity C: The Kentucky Cabinet for Health and Family Services (CHFS) recently awarded Medicaid Managed Care Organization (MCO) contracts to three vendors. As these contracts approach their expiration, CHFS will likely issue a re-bid solicitation for Medicaid MCOs.
  • GovWin Tracked Kentucky Opportunity D: The Kentucky CHFS, Office of Health Policy, and Department of Insurance (DOI) may have a requirement for an eligibility system for the Medicaid program and HIX. CHFS recently conducted a GAP analysis of the current Medicaid and Eligibility System (KAMES). However, the results of this analysis are not yet available.
  • GovWin Tracked Kentucky Opportunity E: Kentucky's draft 2012-2018 Capital Improvement Plan (CIP), intended for the 2012-2014 biennium, includes plans for the (CHFS) and Department for Community-Based Services (DCBS), to develop a Health and Wellness Self-Service Citizen Portal that will enable Kentucky residents and community partners to electronically apply for benefits related to SNAP, TANF, Medicaid, and the Kentucky Children's Health Insurance Program (KCHIP).
  • GovWin Tracked Kentucky Opportunity F: The Kentucky Cabinet for Finance and Administration will likely issue a re-bid solicitation continue the operation of a Child Support New Hire System.
  • GovWin Tracked Kentucky Opportunity G: The Kentucky CHFS recently received a $3 million federal grant to enhance the state's background check system and procedure for people seeking jobs caring for elderly or disabled residents. The state has not yet established a timeline for the implementation of the enhanced system.

West Virginia
Analysis Provided by Kate Tussey

Health care and social services: What should come as no surprise, West Virginia is currently planning for its HIX, receiving $9.7 million in federal money toward that effort so far. West Virginia will provide for several consumer quality and effectiveness-related studies to ensure an efficient and value driven market transition into the exchange, including further funding for actuarial services and economic modeling as envisioned under the planning exchange grant. West Virginia Health Information Network is currently finalizing the contract agreement for its HIE, while the Bureau for Medical Services reviews proposals for its MMIS contract.

West Virginia upcoming and current major procurement opportunities:

  • GovWin Tracked West Virginia Opportunity A: Proposals are currently under review for the MMIS contract.
  • GovWin Tracked West Virginia Opportunity B: Proposals are currently under review for the HIE.
  • GovWin Tracked West Virginia Opportunity C: The state will be planning and implementing its HIX.
  • GovWin Tracked West Virginia Opportunity D: Proposals are currently under review of the Child Support Collection Tracking and Disbursement Unit contract.

Montana
Analysis provided by Kate Tussey

Healthcare and social services: Money issues and political views have plagued several of Montana's health and human services technology upgrades and implementations. On the health care side, despite awarding a contract earlier in the year for HIX planning, Montana will now have to wait for the federal government to design its' HIX, as state legislators refused to give the state the authority to do it itself. Due to financial issues, the state's statewide automated child welfare information system (MACWIS) and a feasibility study regarding replacement of its automated child support enforcement system (SEARCHS) is currently on hold until the legislature meets again in 2013.

Montana upcoming and current major procurement opportunities:

  • GovWin Tracked Montana Opportunity A: The Department of Public Health and Human Services (DPHHS) will be looking to release a Case Management and Reporting Solutions request for proposals (RFP).
  • GovWin Tracked Montana Opportunity B: Due to financial issues, the Child Support Enforcement IT System feasibility study is currently on hold until the legislature meets again in 2013.
  • GovWin Tracked Montana Opportunity C: DPHHS is looking to design, develop, and implement MACWIS.
  • GovWin Tracked Montana Opportunity D: DPHHS will be implementing EBT in the WIC program.

Wyoming
Analysis provided by Amanda White

Health care: The Wyoming Department of Insurance plans to establish a HIX for their state. The Department received $800k in federal funding for planning efforts surrounding the exchange. Wyoming has set up a Task Force/Steering Committee to assist in recommendations for necessary actions for the exchange. The state will be deciding whether to create its own exchange or partner with others in a regional program. Xerox currently providesMMIS Fiscal Agent Services. Their contract expires in June 2013.

Social services: The Wyoming Department of Family Services may procure for Eligibility Payment Information Computer System (EPICS)/Jobs Automated System (JAS) Security Review and Revision Services Wyoming is a state administered agency for child welfare and juvenile services with the functions of policy development, training, strategic planning, and quality assurance centralized at the state level.

Wyoming upcoming and current major procurement opportunities:

  • GovWin Tracked Wyoming Opportunity A: The state may procure for system implementation services pertaining to their HIX. The state's Health Benefit Exchange Steering Committee has been meeting to provide recommendations for their future exchange.
  • GovWin Tracked Wyoming Opportunity B: The contract with Xerox is set to expire in June 2013 for MMIS Fiscal Agent Services. A timeline for the release of the rebid will be available closer to the contract's expiration.
  • GovWin Tracked Wyoming Opportunity C: The state may re-release a solicitation for EPICS/JAS Security and Revision Services. The original RFP was cancelled. It may, however, may be released in the future. A timeline is currently unavailable.

Analyst's Take – Kate Tussey
It shouldn't come as a surprise that HC spending will continue to rise among the states, even with many governors' yearly goals dedicated to controlling Medicaid spending. As in the justice and public safety market, federal agencies will continue drivers for change in the HC technology field. Despite a federal budget crisis, feds have and are on schedule to cough up large amounts of grant funding for a range of initiatives, including health insurance exchanges (HIX), Medicaid management information system (MMIS) development, and development costs associated with integrated eligibility systems.

  • States are seeing a break in IT systems spending surrounding MMIS and eligibility systems until 2015, when 90/10 funding returns to normal match rates.
  • For HIX's, even with planning grants, early innovator funding, and Level 1 and 2 grant opportunities, yearly maintenance costs of HIXs ranging from $20 million to $50 million per year (which does not include future contracting opportunities for call centers, website development, health insurance navigators, tax systems, etc.)
  • Vendors should expect to see continued contracting for a wide variety of services surrounding HIXs, ranging from professional services to IT development. Solutions need to not only be in place, but working by January 1, 2014. Ideally, this means vendors need to have a product integrated and running by summer 2013
  • .
  • Vendors should also be prepared for the large shift in the HC field, mandated by the ACA, from "pay for quantity" to "pay for quality," which will necessitate an increased need in reporting and data analytics capabilities.

Analyst's Take – Chris Cotner
With these uncertain and fluctuating financial times, any good news is welcomed by the business community. HC and SS budgets are projected to grow in FY 2013 and beyond. Given that HC and SS budgets are coming off of one of the only declines in recent history (FY 2012), this is certainly good news. However, there are still some cautionary considerations. While the overall budgets are improving, an individual state's HC and SS budget can experience sharp fluctuations from year to year with changing political priorities and projects. Second, the immediate future of HC and SS funding will still show a net loss for FY 2012. Third, while growth is projected, with annual overall growth rates just under one percent, this market will not see the sharper growth it did during stimulus funding. However, with the continued population and demographic pressures, projected gains lie ahead.

Within this projected growth, individual states are procuring new HC and SS-related IT systems to improve efficiency. Despite some difficult recent budget years in the states, the answer is not for vendors to retreat from the state and local market. Rather, the opportunity for growth is phenomenal. Governments need to save money and are desperate for any creative solutions they can afford. Vendors really interested in winning business and making a difference should look toward not only remaining in the state and local market, but becoming more cooperative in their approach. Partner with governments. Participate in grants. Enter into joint and mutually-beneficial ventures. Work to improve the community you strive to serve through collaborative and creative solutions that allow efficient delivery of the highest quality service possible.

Follow Deltek and this blog for future updates, including predictive analysis of spending types and IT within the HC vertical.

Follow all of the GovWin State and Local Top Opportunities, Reports, and Podcasts, here.

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Follow the S&L Healthcare and Social Services Team on Twitter, here.

Visit the HC & SS vertical profiles, here and here.

STARCOM 21 Resurfaces

The state of Illinois' STARCOM 21 project that roared with controversy earlier this year has resurfaced once again. A lot of backlash resulted from STARCOM 21's $114 million soul-source contract to Motorola, awarded in May, but that hasn't stopped the project from expanding. Illinois recently decided to contract out radio equipment compatible with the STARCOM 21 network through a new invitation for bid (IFB) released on September 13, 2011.

Initially, Harris Corporation filed a formal protest alleging the awarded Motorola contract was a monopoly and bypassed open competition between vendors. The STARCOM 21 network services more than 18,000 subscribers and is owned and operated by Motorola. The intention of the past state procurement was to allow continued use of the existing STARCOM 21 network in order to maintain infrastructure and leverage the original investment.

The new solicitation is looking to establish a statewide indefinite quantity master contract(s) for the purchase of STARCOM 21 compatible subscriber radio equipment (P25) along with associated installation, extended warranty, parts, and accessories for various state agencies, officials, boards and commissions. All radios must be FCC type-accepted and PC programmable. Proposals are due October 4, 2011. Vendors with equipment not currently approved for the STARCOM 21 network are eligible to bid, but must have the equipment approved to operate on the network after the award is posted.

Analyst's Take

With this contract being more equipment-based as opposed to infrastructure-related, this may be an opportunity for new vendors to gain the upper hand. It is likely that big-name corporations such as Motorola or Harris Corporation may not even bid on this contract. Although much controversy may not arise this time around, it is still important for vendors to thoroughly research before bid proceedings. Vendors should find out what most satisfies the customer and then properly gauge their pricing accordingly. Also, it is always important to be aware of protest procedures in the event a contract is deemed unfair.

More good news: Combined state health care and social services budget and IT projections

This blog is part one of a two-part series.

By Chris Cotner, Kate Tussey, Amanda White,Stephen Moss, and Aila Altman .

In all states combined, HC and SS will account for 34.8% of all funds expenditures in 2012. While this is a net loss of -5.3 percent from FY 2011, it is still the largest budget expenditure for the states (with education closing in at second with 31% of the budget). In the recent environment of decreased state revenues in the sluggish economy, budget cuts have been the norm. As I wrote in my previous article (here), FY 2012 is the first time in decades that state budgets have decreased on the whole. With the prospect of rising costs and budgets in HC and SS, there is good reason for states to be concerned. Despite the net loss in FY 2012, state budgets are expected to flatten and begin upward growth in FY 2013. However, drilling down, there is more good news around which to rally.

As part of our continued analysis of state and local budgets and spending, Deltek developed a set of statistical projection models to examine future trends in the states' HC and SS budgets. What we found was more good news. After the net loss in FY 2012 for all states, HC and SS budgets are projected to increase (see figure 1, below) in FY 2013.

The following analysis explains both the methodology and projections in greater detail. While similar to the more general analysis published, (here), this analysis also includes HC and SS budgets, budget projections, and IT budgets for individual states. Since much of the overarching information would be very similar to previously published analysis (here, here, and here), this article dispenses with much of the macro analysis and focuses on the combined data.

Figure 1: Health Care and Social Services Total State Spending (Actual and Projected)


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The Methodology

All good models start with good data. Deltek has accurate, sound data on state budgets (including IT) through FY 2012 for all states and into FY 2013 for some. We were able to combine our data with census projections to create models for budget projection that are both correlative and predictive. However, projection of HC and SS for the individual states is complicated. In the simplest terms, Medicaid funding is used in both HC and SS budgets. Because of mixed funding, projections for HC and SS are more accurate when taken together. For further explanation of the methodology, read the previous related articles (here, here, and here).

The Projections and Analysis

Taking a look at figure 1, above, the projection looks similar the previous budget projection data (here).There is an uptick in FY 2011 for combined HC and SS budgets (likely the result of stimulus spending) followed by a decrease in FY 2012 (the result of stimulus funding running out, the recession catching up with budgets, and most states engaging in budgetary reductions). Looking ahead, there is good news in projected upward growth starting in FY 2013; overall state HC and SS budgets should increase by an annual rate of 0.85 percent per year.

For more macro analysis of the trends in both HC and SS budgets, see the previous articles (here, here, and here).

With our modeling, Deltek was able to provide a picture of projected budgets for individual states (California, Pennsylvania, Ohio, Illinois, Michigan, New Jersey, Tennessee, Colorado, Louisiana, South Carolina, Kentucky, West Virginia, Montana, and Wyoming). Before delving into that data, the actual combined HC & SS budgets for FY 2010 – 2013 for these states (table 1) are listed below. For subscribers, this table contains detailed HC & SS budget data for all states, here. State combined HC and SS budget projections beyond FY 2013 are limited based upon state data variability. Below, table 2 illustrates the projection data, while figures 2 and 3 offer the same data graphically represented.

Table 1: State Health Care and Social Services Combined Budgets FY 2010 – 2013


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Table 2: State Health Care and Social Security Budget Projections


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Figure 2: Health Care and Social Security State Spending (Actual and Projected)


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Figure 3: Health Care and Social Services State Spending (Actual and Projected Detail)


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The data above gives some representation and basis of comparison for future state HC and SS budgets. More specifically, each state has in-process or anticipated HC and SS IT initiatives. Table 3, below, shows the combined HC and SS IT budgets for the states included in the projections. Subscribers have access to the full table with data for all states, here. This represents just the HC and SS-related IT items from each state's published budget. There are likely other HC and SS-related IT expenses in each state's budget that are not readily identifiable through the published budget documents.

Table 3: State Health Care and Social Security IT Combined Budgets FY 2010 – 2013


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Read part two of this series, here, which includes the Deltek Information Solutions' (GovWin) State and Local Health Care and Social Services team members' analysis of upcoming HC and SS IT initiatives and projects in each of the states identified in table 2.

Follow Deltek and this blog for future updates, including predictive analysis of spending types and IT within the HC vertical.

Follow all of the GovWin State and Local Top Opportunities, Reports, and Podcasts, here. Follow Chris Cotner on Twitter here.

Follow the S&L Healthcare and Social Services Team on Twitter, here.

Visit the HC & SS vertical profiles, here and here.

Electronic health records continue to revolutionize health care

At the core of the countless benefits electronic health records (EHR) provide is the enhanced communication between medical professionals and patients. An up-to-date, comprehensive and accurate patient record enables medical professionals to make quality decisions regarding patient care. EHRs also help eliminate health risks such as dangerous drug interactions and unnecessary medical tests and procedures. That said, use of electronic prescribing (e-Prescribing or eRx) by the medical community goes hand-in-hand with the benefits of EHR implementation.

By way of an announcement made during this week's first-ever U.S. Department of Health and Human Services (HHS) Consumer Health IT Summit, patients may soon reap additional benefits from the implementation of EHRs. The proposed rule provides patients with improved access to their personal health information (PHI), and more specifically, enables patients to receive test results directly from labs. HHS believes this rule will improve patients' communication with medical professionals regarding questions and concerns with tests. Not only would this rule provide such benefits, but access to this data is a fundamental right of an individual patient.

The benefits of EHRs do not come without concerns, many of which are related to the privacy and security of patient information. For this, the Health Information Technology for Economic and Clinical Health (HITECH) Act was passed in February 2009. The HITECH Act expands upon the privacies and securities provided by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). To further ensure this, newly-appointed Director of the HHS Office of Civil Rights Leon Rodriguez has stated the privacy and security of PHI will be one of his top priorities in office.

With EHRs comes all this talk of meaningful use. Health care professionals who wish to receive EHR incentive payments from the Centers for Medicare and Medicaid (CMS) must comply with certain guidelines related to the adoption of EHRs in their health care settings. Meaningful use is broken up into three stages over a five-year span, of which we are currently in stage 1: data capture and sharing. Stage 1 consists of 15 core objectives including the maintenance of a patient's active medication list and the electronic transmission of prescriptions. EHRs are being implemented at all levels, from individual public and private hospitals, to counties, to statewide implementation. Wake County, N.C. is currently evaluating proposals for the creation of an EHR system to serve the county's human services department and meet stage 3 meaningful use requirements prior to 2015. Kansas is in the midst of planning to procure a custom-off-the-shelf (COTS) EHR solution for the five hospitals that operate under its Department of Social and Rehabilitation Services (SRS). Meanwhile, the Arkansas Department of Health (DOH) released a request for information (RFI) for the state's Medicaid EHR.

Not only are vendors active in assisting states and localities with the implementation of EHRs and health information exchanges (HIEs), they also aid in the provision of meaningful use incentive payment programs. States and localities procuring or awarding such contracts include Alabama, Ohio, California, Iowa, and Minnesota. As states and localities continue to adopt EHRs and work toward incentive payments for meaningful use, vendors will continue to see business opportunities arise.

Deltek's Health Care and Social Services team will continue its blog series to celebrate National Health IT (HIT) Week. Make sure to check out tomorrow's blog on health IT budgets across the states.

Follow us on Twitter @GovWin_HHS or connect with us through LinkedIn!

Despite reluctance, states acknowledge looming deadline for insurance exchanges

The January 1, 2014 federal deadline for states to have health insurance exchanges up and running is fast approaching, and as summer comes to a close, states are realizing just how fast time is flying.

Surprisingly, several states have yet to pass legislation to set up the infrastructure, and in some cases, have returned federal funding. However, this has not stopped states like Kansas from moving forward. The state gave back $31.5 million in federal funding from the Early Innovator Grant after Governor Sam Brownback's administration deemed it to have "too many strings attached." Nonetheless, the state still plans to continue in the same direction with the development of an optimal solution for the insurance exchange. Kansas plans to use 90/10 funding and will be applying for a Level 1 Establishment Grant. The state recently released a draft timeline for the exchange and anticipates a solicitation release midway through FY 2012 if a competitive process is decided upon. Some of the main goals in creating an exchange include providing a system with best possible outcomes for Kansas consumers, balancing administrative effectiveness, ensuring continuity of care, and providing user-friendly access to the exchanges.

Oklahoma also gave back federal funding. The state returned $54 million from the Early Innovator Grant after refusing to comply with the health care bill's mandates. A joint committee has been created to recommend how the state should address the federal health care law. The first meeting will take place today, September 14, in the House chamber at the Oklahoma State Capitol; it is expected to feature key members of the Health Insurance Exchange Steering Committee from the Oklahoma Health Care Authority. Early this year, the state introduced Legislation SB971, which would have established the "Oklahoma Health Insurance Private Enterprise Network," but the bill failed to make the legislative session.

Alaska, one of two states that refused to apply for planning grant funding, is now taking steps toward setting up architecture for a future exchange. Alaska Health and Social Services Commissioner William Streur confirmed that the department plans to issue a request for proposals (RFP) in the coming weeks for consultants to assist in designing Alaska's future exchange. Governor Sean Parnell considered the federal health care overhaul unconstitutional; however, the state plans to proceed with the development of an insurance exchange with its own money.

Here is a look at some other state statuses:

  • California: The state recently released a competitive negotiation process for business and operations planning process services under the Level 1 Establishment Grant. The selected contractor will assist staff in developing a comprehensive business and operations plan.
  • Missouri: The Missouri Health Insurance Pool (MHIP) released a request for information (RFI) for health insurance exchange component solutions and services; responses are currently under review. The state received $20.9 million earlier this year under the Level 1 Establishment Grant and plans to build an exchange IT system that will be highly coordinated with state agencies to enable a streamlined, single-portal eligibility and enrollment system.
  • Nevada: The Nevada Health and Human Services Department was recently awarded $4.05 million in Level 1 Establishment Grant funding for its exchange. The state plans to use funding to develop a rules-based eligibility engine that will serve as a single, streamlined eligibility process for all medical assistance programs including Medicaid, Nevada Check Up and the exchange.
  • Washington: The Washington Health Care Authority released a selective solicitation for project manager and deputy project managers for the health insurance exchange project. Selected vendors must be prequalified under ITPS. The state also plans to release a solicitation for call center services in September 2012.
  • Wyoming: The Wyoming Health Benefits Exchange Steering Committee has been meeting to discuss options for the state's insurance exchange. The committee is expected to submit a draft of its proposals by October 1, 2011. The group is looking at elements such as financial feasibility to create the exchange, regional partnerships, and whether to seek an extension to 2015 from the federal government.

Though numerous states are ostensibly sluggish when it comes to establishing legislation for health insurance exchanges, they still must move forward with planning efforts. For that, states will continue to create workgroups and steering committees to review various options and make recommendations for future exchanges. States that have yet to set up legislation should not be dismissed, as there may be opportunities for vendors to take part in planning and development. Moreover, vendors should not overlook states returning federal funding, since they will use money from other sources to cover costs for exchange implementation. Furthermore, as always, states are looking for cost-effective solutions that do not sacrifice quality in the delivery of services to their customers. As a result, vendors should continue to work toward user-friendly, modular technology for these systems.

Deltek's Health Care and Social Services team will continue its blog series to celebrate National Health IT (HIT) Week. Make sure to check out tomorrow's blog on Electronic Health Records and Friday's on health IT budgets across the states.

Follow us on Twitter GovWin_HHS@GovWin_HHS or connect with us through LinkedIn!

The future of food assistance: state vs. federal control

With 46 million Supplemental Nutrition Assistance Program (SNAP) recipients nationwide – up from 27 million just four years ago – the U.S. Department of Agriculture (USDA) is contemplating how it can accommodate the ever-increasing need for food assistance in America. As part of the federal stimulus package, additional funding for SNAP was provided in 2009, but will come to an end in 2013.

In Washington D.C., the idea of turning SNAP into a state-run block grant program has been tossed around, but not without widespread objection. Additionally, prevention of fraud and abuse of SNAP is a common concern. With one in seven Americans receiving SNAP benefits, the government has little choice but to identify a solution or face increasing food insecurity rates throughout the country.

In June 2011, the House passed a plan to convert SNAP into a block grant program; however, apprehension was rampant. Under a block grant structure, states would likely struggle to accommodate increasing needs during times of economic strife or, as recently demonstrated, when dealing with the aftereffects of natural disasters. The risk that states may reallocate SNAP block grant funding to other state-operated programs also exists, particularly as states continue to struggle with budgetary constraints.

Economically, SNAP is both helpful and harmful. Without assistance, many families would not have money for daily needs such as shelter or transportation to and from work. This is highlighted by today's increasing cost of living and simultaneous minimal increase in wages. SNAP stimulates the economy by generating millions in revenue for retail food outlets nationwide, but not without some damage; SNAP eats up approximately $68 billion worth of taxpayer dollars annually.

Analyst's Take

While Congress contemplates how it will handle, or even possibly forsake control of SNAP, states should begin brainstorming how they would operate individual food assistance programs and systems in their states. If the block grant program is eventually implemented, state human and social services departments will likely look to consultants and vendors for assistance with planning, developing, implementing, and operating state-run systems. Additionally, with the potential for increased oversight of SNAP, vendors with effective fraud detection and independent verification and validation (IV&V) technologies and services may find themselves presented with an abundance of business opportunities. In the meantime, GovWin will continue to monitor Capitol Hill for any decisions regarding the future operation of SNAP.

Make sure to follow GovWin's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn.

 

National Health IT Week – Health Information Exchanges

It would be hard to write a blog series for Health IT (HIT) Week and not include today's topic: health information exchanges (HIE). For those new to the subject, the American Recovery and Reinvestment Act (ARRA) of 2009 provided approximately $150 billion in health care spending, including $564 million under the Health Information Technology for Economic and Clinical Health Act (HITECH). One award ranging from $4 million to $40 million was given per state. The State HIE Cooperative Agreement Program funded states' efforts to rapidly build capacity for exchanging health information across the health care system. Key to this is the continual evolution and advancement of necessary governance, policies, technical services, business operations, and financing mechanisms for HIE over each state, territory, and state-designated entity (SDE). This program builds on existing efforts to advance regional and state-level health information exchange while moving toward nationwide interoperability.

Back in October 2010, Deltek analyzed several of the state HIE planning documents and compiled a report of trends found within the states. Most SDEs planned on utilizing a hybrid method of data storage, which can be defined as some health data being centralized and some health data being stored at locations where care is provided. A hybrid HIE offers the most flexibility (of the three structure options) by allowing large institutions with complex electronic health record (HER) systems -- along with individual providers with no EHR system -- to receive shared services and value from the statewide HIE. SDEs seemed to have a consensus of core components of an HIE, including:

  • Master patient index (MPI), which utilizes a standard identity/information correlation process to uniquely identify an individual and match patient data from different providers and care settings
  • Record locator service (RLS), which coordinates with the MPI and facilitates the exchange of secure messages and documents, but does not store information contained in the records
  • Authentication services, which are state-mandated security controls that identify who can access the statewide HIE
  • Access and authorization services, or role-based security that controls how an individual is permitted to use the statewide HIE
  • Auditing and logging services
  • Transport and content standards, which include nationally recognized specifications and protocols to enable communication among different health data systems
  • Data transaction services, which include the processes and software necessary to facilitate the exchange of various types of data through the statewide HIE
  • User and system interface (methods to access the statewide HIE)
As with health insurance exchanges, SDEs are still grappling with the idea of sustainable HIEs. HIEs have significant start-up and ongoing funding needs, including hardware/software, communications, technical support for providers, legal expertise to safeguard privacy, etc. Estimated yearly budget operations ranged from $7.5 million to $32 million. Strategies for self-sufficiency include subscription payments, transaction payments, service/cost-sharing fees, pay for performance models, and/or the use of state/federal/foundation funding. Given the difficult economic environment facing all health care stakeholders, to become financially sustainable, the HIE must focus on unmet needs that stakeholders are willing to pay for. Analysis in several plans shows there is not a single financing mechanism that will work -- as with the technical architecture section -- a hybrid revenue model will probably be required to span the short and long-term needs of state HIEs.

For those vendors in the market, there are still several HIE opportunities still waiting to be bid. These include Massachusetts, Arizona, Oklahoma, Georgia, Virginia, Nevada, New Jersey, Hawaii, and New Hampshire. At the eHealth National HIE Forum in July 2011, it was pretty clear that there are still many hurdles along the quest for bettering the delivery of health care. As should come as no surprise, the top ten challenges that lie ahead include many touched on in this blog: sustainability, defining value, government policy/mandates, systems integration, technical aspects/interoperability issues, enganging clinicians, and privacy. It is safe to say that capturing data alone is no longer enough. There is far more value in clinicians being able to analyze and use the data to make the best decisions for their patients.

We will continue the celebration of health IT this week with a series of blogs highlighting progress in the states along with vendor recommendations based on those trends. In the coming days, look for blogs on the following hot health IT topics:

  • Wednesday: The progress and challenges around the implementation of health insurance exchanges.
  • Thursday: An update on Electronic Health Records.
  • Friday: Analysis of health IT budgets across the states.
Don't forget to follow Deltek's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn. We'll be tweeting and posting throughout the week with our expert analysis of health IT in the state and local market.

National Health IT Week kicks off

Good Monday morning and welcome to Deltek's blog series in honor of National Health Information Technology (HIT) Week. In its sixth year, National Health IT Week gives us an opportunity to both reflect on the intense progress we've seen in the state and local health IT market over the last few years and analyze what we expect in the future.

As any casual observer of health care could attest, the advent of sophisticated health IT has enabled improvements and changes that those in the market even ten years ago could not begin to imagine. It is fitting that we should take a week to celebrate and highlight these technologies that have a meaningful impact on the lives of those among us who are most in need. Improved access to care, better outcomes, and a seamlessly efficient and cost-effective delivery of care are only a few benefits of HIT.

We will join the celebration of health IT this week with a series of blogs highlighting progress in the states along with vendor recommendations based on those trends. In the coming days, look for blogs on the following hot health IT topics:

  • Tuesday: The status of health information exchanges that have already been implemented and those that are still in a planning stage and will require vendor support.
  • Wednesday: The progress and challenges around the implementation of health insurance exchanges.
  • Thursday: An update on Electronic Health Records.
  • Friday: Analysis of health IT budgets across the states.

Don't forget to follow Deltek's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn. We'll be tweeting and posting throughout the week with our expert analysis of health IT in the state and local market.

Obama American Jobs Act: Contractor Implications

On Thursday night, President Barack Obama revealed the American Jobs Act, an ambitious $447 billion package of spending plans and tax cuts designed to stimulate the U.S. economy and create badly needed jobs. And according to Obama, the plan will be paid for in full by rolling it into the list of spending to be offset by the Joint Committee focused on a deficit reduction plan.

Overall, Obama pushed for more federal spending to help jump-start the economy, although he avoided the word "stimulus," which has become an issue with Republicans. Clearly, the GOP will continue to oppose anything resembling the last stimulus, and is quite weary of the threat of continued out-of-control spending.

Below are some key points from Obama's speech which could affect the government contracting community:

  • Helping Small Businesses – As part of his infrastructure revitalization plan, Obama called for significant investments in schools, roads, rail and airports while helping small business contractors compete for infrastructure projects. He also called for tax cuts, reforms and regulatory reductions to help entrepreneurs and small businesses access capital and grow, which could benefit smaller contractors just getting started and those looking to expand their operations.

    Contractor Impact: Obama's plan includes changing the way the government does business with smaller firms. The Administration will soon announce a plan to accelerate government payments to small contractors to help put money in their hands faster. The President is also charging his CIO and CTO to, within 90 days; stand up a one-stop, online portal for small businesses to easily access government services.

  • Transportation Infrastructure - Transportation infrastructure presents a double opportunity for Obama - a chance to get Americans working, while modernizing the U.S.'s deteriorating infrastructure. In total, Obama called for $50 billion to be spent on immediate investments for highways, transit, rail and aviation. The President's plan includes investments to improve America's airports, support NextGen Air Traffic Modernization efforts, and resources for the TIGER and TIFIA programs, which target competitive dollars to innovative multi-modal infrastructure programs. Another $10 billion will be spent on an infrastructure bank to help get private funding to support infrastructure-related projects.

    Contractor Impact: Infrastructure work would benefit AEC contractors over the next several years. According to Deltek's "Federal Architecture and Engineering Market Outlook, 2011-2016" report, demand for architecture and engineering (A/E) services by the U.S. government will increase from $8.1 billion in 2011 to $9.5 billion in 2016 at a compound annual growth rate (CAGR) of 3.2%. As transportation infrastructure modernization progresses, so does the embedded technology, which could mean additional opportunity for technology contractors.

  • School Infrastructure - Obama also wants to create jobs to work on construction projects at thousands of deteriorating schools, with rural and Bureau of Indian Education funded schools having top priority. Obama aims to invest $25 billion in school infrastructure, including Internet-ready classrooms. He also emphasized the need to rehire teachers who have been laid off, and will look to spend $35 billion to help protect those teachers.

    Contractor Impact: Infrastructure work would benefit AEC contractors and firms that could provide IT enhancements and upgrades. Projects would include energy efficiency upgrades, modernization of science and computer labs and technology upgrades.

  • Expanding access to high-speed wireless - The President is calling for a deficit reducing plan to deploy high-speed wireless services to at least 98% of Americans, including those in more remote rural communities, while freeing up spectrum through incentive auctions, spurring innovation, and creating a nationwide, interoperable wireless network for public safety.

    Contractor Impact: There is opportunity for not only companies that provide wireless network capabilities, but also adjacent technology areas that would be facilitated by broader access, such as telehealth and telework.

  • Supporting the Unemployed – The President proposes an overhaul of the Unemployment Insurance program, extending benefits and giving states more responsibility and flexibility to design better programs for reemployment, particularly for the long-term unemployed. There are some 6.2 million Americans who have been out of work for more than six months. States would also have the flexibility to help long-term unemployed workers create their own jobs by starting their own small businesses.

    Contractor Impact: Depending on the scale and nature of the overhaul, states may need assistance in developing, implementing and monitoring new programs and information.

  • Creating Tax Benefits: The Act has several tax incentives for businesses to spur hiring:

    • Payroll taxes - Topping the President's jobs initiative is the cutting of payroll taxes. The plan is to expand cuts worth $240 billion so that workers could expect to see their share halved through 2012. This provision would also cut the payroll tax in half to 3.1% for employers on the first $5 million in wages.
    • Tax Credits for Hiring the Long-Term Unemployed - President Obama's plan would also give companies a $4,000 tax credit for hiring from the 5 million, long-term unemployed Americans.
    • Tax Credits for Hiring Veterans - The unemployment rate for U.S. veterans below the age of 30 hovers around 24%, and that rate could expand. Currently, there are 2 million veterans of the Afghanistan and Iraq campaigns back home. But once those missions fully draw down, that number could easily double, reports say. The "Returning Heroes tax credit" will set aside $5,600 to $9,600 to encourage the hiring of unemployed veterans.

    Contractor Impact: Tax incentives are useful to any company struggling with cashflow issues.

Spending Summary

Source: White House Office of the Press Secretary

The biggest criticism of the plan that seems to be leading the online debate is the tax credit element, the argument being that businesses only hire when the demand for their product or service is there, not simply to take advantage of tax credits. I tend to believe this will be true, except for those specific areas of investment that will drive demand and therefore the need to hire (e.g. transportation, education, wireless). Driving demand for struggling businesses in flattened industries outside of these will be an issue.

In the current environment, the first question might be "how will the government pay for all of this?"To pay for the plan, President Obama is calling on the Joint Committee that is currently working on a deficit reduction plan (required as part of the debt ceiling agreement) to find additional cuts. Obama noted that in the coming weeks, he would further outline his deficit reduction plans.

So what are the chances of this act passing Congress? Considering the level of contentious debate that has occurred since the 111th Congress was formed, particularly around budget-related legislation (e.g. FY11 budget, debt ceiling), this bill will likely face the same level of scrutiny. However, there are no less than 26 other job bills that were introduced and stalled in Congress in 2011 (some of them with very interesting names such as the "Keep American Jobs from Going Down the Drain Act of 2011," and "Don't Default on America's Debts and Destroy American Jobs Act of 2011").

I'm sure President Obama is hoping for the "Can We Please Just Pass This Bill Without Drawn Out and Stubborn Debate Act of 2011." And he may get his wish. Spurred by plummeting Congressional approval ratings, negative public perception and plain old weariness of continuous head-butting over numerous issues, Congress may be more willing to compromise than we've seen on any other issue in 2011 - as long as Obama's plan to pay for it comes to fruition.

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