FedSources Federal Healthcare Technology Domain Cross-Government Report on Federal Spending

8/14/2019 FedSources Federal Healthcare Technology Domain Cross-Government Report on Federal Spending

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The Federal Healthcare Technology Domain

A cross-government report on Federal spending

By Ray BjorklundSenior VP and Chief Knowledge OfficerFedSources, a Washington Management Group company

OverviewThe U.S. Federal government will spend more than $385 billion on healthcare not including Medicare

spending in GFY2010. Nearly $70 billion of that will go to government contractors in the area ofhealthcare technology.

Note that $70 billion will be spent on healthcare technology, not simply health IT. Health IT, accordingto its definition, is patient centric. The contractor addressable market for health IT is about $900

million. The contractor addressable market for healthcare technology is magnitudes larger andpresents much greater opportunity.

While this report covers health IT as part of the overall healthcare technology market, it does not

cover grants, health benefits, or healthcare reform legislation. Instead, this report maps out

contractor addressable spending for those technologies and services involved in healthcare.

These technologies and services span a broad range of agencies, including the Department of Healthand Human Services (HHS), the Food and Drug Administration (FDA), the Department of Defense(DoD), the Department of Homeland Security (DHS), the Department of Justice (DoJ), and many

others.

Federal healthcare technology is a large, complex market ripe with opportunity. This report willpresent the market in a unique way, highlighting opportunities within programs and agencies

government contractors may not have previously considered for healthcare technology business.

Market BreakdownIn this report, weve broken the healthcare technology domain into three categories: Health Research


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Health Research and Promotion represents the area with the largest growth rate: 26 percent CAGR

(compound annual growth rate) from 2008 to 2010. For GFY2010, the Federal government will spend

$7.28 billion on Health Research and Promotion. This figure follows spending of $4.6 billion inGFY2008, and $6.13 billion in GFY2009.

The types of Health Research and Promotion tracked within the spending figures include:

Biomedical researcho Medical research, clinical investigation, rehabilitative research, genomic research

Public health science, policy, and practice

o Policy and planning; behavioral, social, and economic research; public health education;health professionals education and training

The top spending agencies in the area of Health Research and Promotion include:

Department of Health and Human Serviceso National Institutes of Health

o Centers for Disease Control and Preventiono Food and Drug Administrationo Agency for Healthcare Research and Quality

o Substance Abuse and Mental Health Services Administrationo Health Resources and Services Administration

Department of Labor

o Occupational Safety and Health Administration

Environmental Protection Agency

Department of Defense

o Military Health System

o Uniformed Services University of the Health Sciences

Department of Veterans Affairs

o Veterans Health Administration

U.S. Department of Agricultureo Food and Nutrition Serviceo Rural Utilities Service

Department of Energy

Health ProtectionThe category of Health Protection covers the governments efforts to protect and defend its citizens. It

includes the development of standards, analysis of health trends, and preparedness. It also includesthe application of countermeasures to protect food and human health.

Health Protection is the second largest category in terms of growth rate: 8 percent CAGR from 2008

to 2010. For GFY2010, the Federal government will spend $5.83 billion on Health Protection. This


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Preparedness and Response

o Medical countermeasures, emergency response

The top spending agencies in the area of Health Protection include:

Department of Health and Human Services

o Centers for Disease Control and Prevention

o Food and Drug Administration

U.S. Department of Agricultureo Food Safety and Inspection Service

o Animal and Plant Health Inspection Service

Department of Defense

o Military Health System

Department of Labor

o Occupational Safety and Health Administration

Department of Homeland Security

o Office of Health Affairs

Department of Justiceo Federal Bureau of Investigation

Department of Commerceo National Institute of Standards and Technology

U.S. Postal Service

Department of Energy

Healthcare DeliveryHealthcare Delivery is the largest category by far in the healthcare technology domain, covering all

the means by which the government cares for healthcare recipients. It also includes medical anddental services, pharmaceuticals, medical supplies and healthcare facilities construction and

maintenance.

Although this is the largest category, it shows the smallest overall growth: 4 percent CAGR from 2008to 2010. For GFY2010, the Federal government will spend $54.09 billion on Healthcare Delivery. This

figure follows spending of $49.91 billion in GFY2008, and $53.50 billion in GFY2009.

The types of Healthcare Delivery tracked within the spending figures include: Medical and Dental care

Pharmacy services

Combat medicine

Emergency and humanitarian missions

Veterinary care

Acquisition of medical materiel, services, and facilities


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Department of Health and Human Services

o National Institutes of Health

o Centers for Disease Control and Preventiono Health Resources and Services Administrationo Indian Health Service

o Centers for Medicare & Medicaid Services

o Public Health Service

Department of Justiceo Federal Prison System

Spending BreakdownAll three categories combined Health Research and Promotion, Health Protection, and Healthcare

Delivery are experiencing steady increases year-over-year with a compound annual growth rate of 6percent from GFY2008 through GFY2010.

GFY2008 GFY2009 GFY2010 GFY2011 GFY2012

CAGR

GFY08-

10

CAGR

GFY08-

12

Health protection $4.98B $6.42B $5.83B 8%

Health research and

$0B

$10B

$20B

$30B

$40B

$50B

$60B

$70B

$80B

$90B

Contractor-addressable

federalspending


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Opportunity BreakdownBased on the types of services and products the Federal government has spent in each of the

Healthcare Technology Domain categories in GFY2008 and GFY2009, one can predict which types of

opportunities will be most prevalent within the Healthcare Technology Domain for GFY2010, GFY2011and beyond.

GFY2008 GFY2009 GFY2010 GFY2011 GFY2012CAGR

GFY08-10

CAGR

GFY08-12Real property $3.57B $4.62B $3.42B -2%

Telecomm $1.14B $1.28B $1.41B 12%

Prof services (incl R&D) $4.91B $7.24B $6.00B 11%

Other white collar services $11.26B $11.38B $12.33B 5%

Medical services $19.37B $19.90B $21.24B 5%

Investment products$3.65B $3.64B $4.25B 8%

Consumable products $13.72B $15.98B $16.49B 10%

Blue collar O&Mservices $1.89B $2.00B $2.06B 4%

Totals $59.49B $66.05B $67.20B $72.24B $77.30B 6% 7%

$0B

$10B

$20B

$30B

$40B

$50B

$60B

$70B

$80B

Contractor-addres

sable

federalspending


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one example, as the agency responsible for delivering countermeasures in the event of a biological

attack.

Based on the number of agencies spending money in this market, and growing interest from a range

of influencers, the healthcare technology market will be a source of significant opportunity during the

next several years.

Specifically, government contractors can expect to see greater than average opportunity in thefollowing areas:

Certification processes, such as health information exchanges, information security andprivacy, health IT devices, and meaningful use standards

Program integrity and forensics

Strategic sourcing, for clinicians and practitioners, pharmaceutical and medical supplies, and

supply chain management

Enhancements in grants management

Modernization of healthcare delivery, including workflow and process re-engineering, case

management tools, investment in clinical diagnostic tools, building out IT and facilityinfrastructure (including telecom), and training of healthcare providers in information-based

technologies

Information sharing, accelerated by high performance computing and cloud computing,

including preparedness and countermeasures

The overall message for contractors is, if you can help improve the effectiveness and efficiency of thefederal healthcare system, you will find great opportunities within the Federal Healthcare Technology

Domain.

About the author

Ray Bjorklund is Senior Vice President and Chief Knowledge Officer at FedSources. Ray has more thanthree decades of hands-on experience in federal program management and procurement processes.As a former government program manager and procurement official focusing on defense, C4ISR and

IT initiatives, he has a deep understanding of the public sector market and its complex policy andprocurement procedures. Ray specializes in identifying market factors, technology trends, and

strategic solutions to help clients posture for success in the government marketplace, and is regularlyquoted in the media as a highly regarded expert in the public sector marketplace.

Ray holds a BS from the University of California at Davis in Environmental Sciences and an MS fromNorthrop University in Procurement and Contract Law.

About FedSources


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FedSourcesInFocus:HealthcareTechnology SampleAgency&OpportunityTargets

January2010


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1 FedSources 2010, All Rights Reserved. Reproduction Prohibited.

Introduction

WanttolearnmoreaboutHealthcareTechnology?Whichagenciesshouldyoufocuson?HowdoyoumapyourcompetenciestoHealthcareTechnologyopportunities?ThefollowingAppendixprovidesahighleveloverviewofgovernmentagencieswithHealthcareTechnologyprograminitiativesandprogramopportunityexamples.Thesesampleagencyprofilesandopportunityprofilesaremerelyasnapshot

ofwhatisavailableviaFedSourcesMarket

IntelligenceServices.


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DepartmentofHealthandHumanServices(HHS)


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HHSOpportunity


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HHSOpportunity


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HHSOpportunity


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CentersforDiseaseControlandPrevention(CDC)


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CDCOpportunity


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CDCOpportunity


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NIHOpportunity


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NIHOpportunity


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NIHOpportunity


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DepartmentofVeteransAffairs(VA)


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VAOpportunity


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VAOpportunity


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VAOpportunity

Military Health Systems (MHS)


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MilitaryHealthSystems(MHS) TRICAREManagementActivity(TMA)


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FedSources Federal Healthcare Technology Domain Cross-Government Report on Federal Spending

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