Effective Acquisition Management is Needed to Drive Digital Health Transformation for the MHS

This is the third in a series of blog articles on Digital Health Transformation in the Military Health System. This article focuses on smart acquisition and management practices that are essential to the digital ecosystem and drive value.   

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November 7, 2023 by Paul J. Hutter, Allen Middleton, Dr. Joachim Roski, and Dr. Jonathan Woodson

The complexity of the Military Health System (MHS) requires a comprehensive acquisition strategy to make digital health transformation a reality.  “United States Military Roles of Medical Care”, incorporated from the Joint Health Services Publication, Joint Publication 4-02, 29 August 2023, visualizes the MHS’s structure comprised of the four Military Departments (MILDEPS) and the medical care they render. In addition to the MILDEPS, the Office of the Assistant Secretary of Defense for Health Affairs (“Health Affairs”), the Uniformed Services University of the Health Sciences (USU), and the Defense Health Agency (DHA) are also part of the MHS structure. All but Health Affairs actively acquire the resources and manage the logistics necessary to support their individual missions. Health Affairs provides policy oversight and, as necessary, directs acquisition and management priorities to support the overarching MHS mission. 

There are differences in the combat care models associated with the different MILDEPS, complicating the MHS’s ability to streamline acquisitions and control unnecessary variation in purchasing required supplies and services. This complex structure and multiple mission requirements necessitate coordination, communication and a shared acquisition strategy to enable the MHS to realize a common approach to digitizing health planning and delivery.

United States Military Roles of Medical Care visualizes the MHS as comprised of the
Army, Navy, Air Force and Marine Corps. (Joint Health Services Publication, Joint
Publication 4-02, 29 August 2023)

Adapting traditional acquisition model to digital transformation

The MHS is in the process of creating an overarching strategy and a supportive digital health transformation strategy. The Defense Health Agency has prioritized digital health initiatives and established five medical treatment facilities as pilots for innovation. The MHS will host a Digital Health Summit in December 2023 and there are other, ongoing efforts to develop and accelerate digital health. 

These efforts must inform and drive two critical steps in the management and acquisition process: development of requirements and a comprehensive acquisition strategy. These steps must provide the foundation for determining the strategic, operational and tactical systems and devices that will facilitate digital health transformation. A comprehensive set of requirements that nest in an effective acquisition strategy will also allow the elements of the MHS to coordinate, synchronize and distribute the products and services necessary to success. Paragraph 1.2.k. of DoD Directive 5000.01, sets forth the imperative for an acquisition strategy that maximizes competition, innovation and interoperability while employing performance-based strategies that emphasize the results to be achieved rather than the process for procurement. 

Top row left to right: Paul Hutter, JD,

General Counsel, USU; Allen Middleton,

MBA, Senior Advisor to the President.

Bottom row left to right: Joachim Roski, PhD,

Executive Director, Ernst & Young, LLP;

Jonathan Woodson, MD, President, USU.

The MHS, to achieve success, will need to focus its digital health acquisition strategy on creating an open-system IT architecture design that is vendor-neutral, modular and interoperable. Within the IT architecture of the MHS ecosystem, data layers should be separate from the layers of algorithmic solutions that query the data. This design ensures that MHS data is controlled and managed by the MHS at all times, allowing multiple vendors to offer digital solutions that can sit side by side on top of the data. By way of example, a leading publicly funded health care system in Europe has published detailed IT architecture design principles that support a digital ecosystem at scale. These principles focus on single data storage (i.e., storing data where it was collected) and make data available to multiple digital or analytic solutions querying the data via open application programming interfaces, while maintaining privacy and stringent data security.

During its acquisition decision-making process, the MHS should rely on return-on-investment (ROI) calculations. This approach requires effective collaboration between MHS clinicians and administrators on the one hand and finance, budgeting and acquisition professionals on the other to determine which investment opportunities are mission-critical for the MHS. In addition, it will allow the MHS to identify relevant assumptions that underlie ROI calculations and review ROI results during regular intervals of the implementation as part of a disciplined periodic review of key objectives and results. 

As the MHS considers acquiring and implementing digital tools, it must contemplate the one-time and ongoing cost variables around acquiring and deploying technology (e.g., ongoing licensing, data hosting and analysis, training and education of staff, redesign of work processes, IT integration and security, ongoing data governance standards). The ROI for MHS related to these costs may come through greater operational efficiency (e.g., more effective scheduling that allows for more procedures and patient visits), better effectiveness or value (e.g., outcome improvement or cost reduction for specific conditions and/or populations) or more streamlined compliance with relevant standards and regulations.

Summary

In a June 2023 report, “What is digital transformation?” by McKinsey & Company, McKinsey defined digital transformation as “the rewiring of an organization with the goal of creating value by continuously deploying tech at scale.” The foregoing discussion suggests that a strategic approach to the acquisition of digital health transformation systems and products will facilitate thoughtful development of requirements, effective incorporation of innovation, efficient procurement, training and distribution and implementation across the MHS elements and down to the users who will benefit from the transformations to improve patient care.