Department of HHS FY 2018 IT Budget Observations

Late last month the White House released its full FY 2018 budget request which included details on IT budgets.  HHS was among a number of agencies that showed a declining FY 2018 budget as compared to FY 2017.

HHS’ IT and Development, Modernization and Enhancements (DME) Budgets

HHS is requesting $5.7B in total IT funding, a 3% decrease over FY 2017 enacted levels.

• Grants account for $8.2B of the total HHS IT budget.
• Proposed potential contractor addressable budget (total IT budget less the cost of government FTEs is $5.1B (90%) of HHS’ IT budget.
• DME accounts for $1.1B, or 19%, of the total IT budget, a 12% decrease from FY 2017 enacted levels.
• 556 total investments; the top 10 represent 35% of the total IT budget at $2B.
• $405M is slated for IT security spending, a 3.9% increase over FY 2017 levels. 
• $921M is slated for provisioned IT investments which includes cloud investments.  $21M is considered DME and $900M O&M.
• Notable agency changes include a 30% decrease at Administration for Children and Families, a 3% decrease at Health Resources and Services Administration, a 16% decrease at Centers Disease Control and Prevention, and a 7% increase at Indian Health Service. Although the total discretionary budget of National Institutes of Health is slated for major cuts, the IT budget only shows a proposed 1% decrease.   

Noteworthy IT Investments

Delving into the details of HHS’ IT investments and initiatives gives deeper insight into their priorities, which is largely infrastructure-focused. Here are just five initiatives that stand out among others due to relative size, budget growth, and/or proportion of new development spending.

• CMS IT Infrastructure (On-going):  IT infrastructure and platform for Medicare and Medicaid. $624M, (+7%), 0% DME
• CMS Federally Facilitated Marketplace (FFM): Provides a platform for organizing the health insurance marketplace to help consumers and small businesses shop for coverage. $278M, (-10%), 55% DME
• NIH IT Computational Infrastructure and Services: Provides shared/dedicated hosting and data storage for applications or services across NIH. $272M, (+4%), 0% DME
• NIH IT End User Devices, Tools & Support:  Support of end user devices, peripherals, software and IT support. $145M, (+0%), 0% DME
• CDC Information Technology Infrastructure:  CDC plans to reduce costs and gain efficiencies through their consolidation of services into a central organizational unit, IT Svcs Office (ITSO), reporting to the agency CIO. $121M, (0%), 2% DME