The “New Normal” in Federal Health: Technological and Cultural Shifts

March saw a bevy of federal health conferences and events that brought together representatives of VA, DHA, CMS, FDA, NIH, CDC, IHS, HRSA, ACF and HHS to discuss how the pandemic has changed their operations and what lies ahead.

While known traditionally for their siloed and somewhat transient policies, agency leaders articulated four unified and lasting takeaways for industry:

Four Key Takeaways from a Month of Federal Health Agency Insight

1. Agencies are investing in permanent versions of ‘temporary’ remote technological fixes.

Most agencies leading up to the pandemic were leaning in on remote-friendly investments, particularly in infrastructure modernization (e.g., cloud migration, cybersecurity).

However, adoption of flexible, digital end-user solutions was more fragmented depending on budgets and internal champions.

The pandemic has forced an accelerated adoption curve for digital citizen service delivery (e.g., at CMS), remote care delivery in the form of new applications and telehealth (VA, DHA), and those on the lagging end of cloud adoption (e.g., DHA).

Responses to these new delivery models have been very positive and agencies are looking to permanently integrate them into operations to meet consumer expectations.

Industry is likely to see a wave of requirements that balance customers’ need to continue the shift to digital operations and platforms while also maintaining the security and integrity of legacy systems.

2. Data analytics and AI have officially taken off across every health agency, but other emerging technologies are still unevenly received.

The pandemic prompted widespread use of to keep pace with the need for rapid decision making.

Stakeholders across organizations are recognizing that “data is not getting any smaller” (CMS OIT leader) and are committed to investing in long-term analytics solutions such as CMS’ Enterprise Data Lake.

Additionally, Biden administration leaders have highlighted data as critical for implementing their priorities, as Dr. Marcella Nunez Smith emphasized how data is key to the health equity agenda.

This widespread adoption contrasts with the mixed reception to emerging technologies like RPA and blockchain, with some agencies leaning in (CMS into RPA, FDA into blockchain).

At the same time, many agencies are adopting some technologies while resisting others. VA for example is looking at RPA for claims processing needs, similar to CMS, while both VA and CMS have clearly stated they do not yet see a use case for blockchain in their missions.

While investments in data analytics are almost certain to find demand, contractors must carefully consider the use cases for new technologies they are pitching to customers going forward to maximize ROI.

3. IT departments and personnel are shifting toward the center of agency operations.

Federal health agencies, and HHS OpDivs in particular, have long been infamous for the outsized role of their centers and institutes compared to their IT offices.

While IT offices acknowledge that mission executors drive requirements, there has been a shift in the level of engagement and collaboration between mission centers and OITs as a result of the cooperation needed to pivot in the pandemic.

CMS and VA IT leaders both highlighted how they are embracing Human Centered Design (HCD) to understand their end-users’ needs, while FDA and CMS OIT leaders specifically called out more proactive engagement with the centers as an objective going forward.

In the words of VA IT leadership, “we want to win the best supporting actor role.” In tandem with increased collaboration, IT workforces and leaders are also receiving more attention.

At CMS, upskilling the workforce to have a higher level of awareness of technologies, HCD, and product management was the second named area of innovation during the pandemic, behind only data use and analytics.

Furthermore, the creation of more nuanced CXO roles tied to IT (e.g., HHS’s new Chief Data Officer and CDO Council) and rise in visibility and autonomy of CIOs, CTOs, CISOs, etc. signals increased activity for these leaders going forward.

The HHS CIO, for example, emphasized how the HHS OCIO rapidly shifted from being a policy and guidance organization to be part of the response and active in putting solutions in place during COVID-19.

While the centers and institutes will still likely drive requirements, we expect more mission-related opportunities to emerge from OITs in a shift from their traditional focus on back-office and enterprise IT.

4. Culture has changed. Collaboration is real and expectations for pace of innovation are high.

Perhaps the most notable change in tone amongst leaders was openness to collaboration, new expectations for pace of innovation, and willingness to accept (some) risk. VA and DHA leaders both referred to traditional barriers as being largely “artificial” or “psychological” and celebrated the momentum generated by overcoming them.

For example, VA and HHS have resolved data sharing policy and access rights previously thought to be too daunting, resulting in new precedent for cross-agency data sharing.

Within HHS, OpDivs that are traditionally highly independent have recognized the importance of collaboration and communication, with FDA leaders noting that “it takes all of us across the OpDivs to enable the HHS mission” (FDA Director, Office of Innovation).

There has also been a shift in government-industry dynamics, with agencies recognizing the importance of enabling industry to operate with innovation and urgency.

For example, a NIH CIT leader praised industry partners for “working with us to turn crises into opportunities” and emphasized the importance of a “culture of urgency and ability to take calculated risk.”

Adoption of accelerated acquisition practices such as oral presentations at FDA and VA helped them cut down their time to engage with industry from months to weeks, and VA IT leadership even went so far as to express that “the currency of the customer is now speed,” indicating this new pace of business is here to stay.

Industry Adaptations for the New Normal

As agencies adopt these shifts as their “new normal,” industry will also need to adapt. Specifically, those working with the government should expect to:

• Sustain the momentum in collaboration, innovation, speed, and agility.
  Contractors should expect capture processes to look different going forward (e.g., more tech demos, oral presentations) and must adapt capture and B&P resourcing accordingly.Additionally, while customers may be more comfortable with “calculated risk” with trusted providers, non-incumbents must continue to carefully navigate the line between risk and innovation.
• Innovate at “the next level” in cloud, data analytics, cybersecurity.
  With customers embracing cloud infrastructures, they are looking for industry to meet the next wave of innovation. Specifically, technologies that build on the flexibility and speed that cloud has brought while remaining secure will see success.
  For example, Low-Code No-Code platforms (especially those that are FedRamp or otherwise certified for security) and other agile development processes that sustain pace of innovation and are highly secure will be particularly successful. Within data analytics, solutions that can push data analytics around outcomes will be in particularly high demand within the federal healthcare space, as early movers such as CMS and the Medicaid program are looking to harness data to assign value to outcomes.
• Invest in your own IT and technical workforces.
  As the government invests in their teams, industry should look to do the same.Training and certifications in new platforms to bring targeted workforces that complement and collaborate with internal government workforces flexibly may be particularly valuable as government may not make platform-specific investments internally. Additionally, enabling technical staff to partner with BD teams more frequently will better position industry to be successful in tech demos and new bid approaches, where technical personnel are expected to be highly customer-facing.

After a year of disruption, federal health leaders are looking ahead to a new baseline of operations. Many of these changes may prove to be positive for industry as government overcomes historical barriers to innovation, if companies can keep pace and pivot their own operations.