Defense Health Program Budgets Expected to Rise

Specifically for FY 2022, DOD is requesting $54B for the Defense Health Program (DHP). The DHP operations and maintenance budget shows an increase from $31.8B in FY 2021 to $34.18B in FY 2022, driven by an expected increase in funds needed for private-sector care. The DHP information management budget is expected to grow from $2.1B in FY 2021 to $2.2B in FY 2022. The DHPs FY 2022 request also includes $252M in Direct War Funding and $429M for continued COVID-19 response. Overseas Contingency Operations funding has been discontinued.

DHP plans to reduce its investment in Research, Development Test & Evaluation (RDT&E) by $1.77B in FY 2022. The DHP RDT&E request totals $630.7M for FY 2022. This reduction stems from a decrease in funding for the Medical Technology Development program.  Further investigation reveals that the drop in funding is due to the elimination of 37 Congressional Special Interest Additions which totaled $ 1.5B in FY 2020 and $1.7B in FY 2021.  These projects covered a wide range of medical research including Amyotrophic Lateral Sclerosis (ALS), autism, Multiple Sclerosis (MS), and various cancers.

The DHP procurement budget shows growth of $235M from FY 2021 to FY 2022.

The increase in the procurement budget is driven by an additional $198.7M for DOD Healthcare Management System Modernization (DHMSM) to align with the MHS GENESIS deployment schedule. The budget also includes $17M to replace medical/surgical, preventive medicine/pharmacy, and radiographic equipment across the MHS. $7.7M is allotted for the Wide Area Virtual Environment (WAVE) system at Uniformed Services University of the Health Sciences. The budget request also includes $3.2M of funding for computing and storage architecture associated with LogiCole and the refreshed Defense Medical Logistics Standard Support (DMLSS) environment. And an additional $3M is provided for General Fund Enterprise Business System (GFEBS) hardware and storage.

Expect contractor opportunities to remain strong in the area of defense health over the next few years as DOD completes the transition of military treatment facilities to be under the purview of the Defense Health Agency (DHA), and continues to implement the MHS GENESIS EHR, upgrade its medical network infrastructure, and pursue further IT modernization efforts.