Federal Health Information Technology Spending to Reach $6.4 Billion by 2021, According to Deltek

New Deltek report forecasts health IT investments by federal health care payers, providers and promoters

HERNDON, Va. – January 31, 2016 – According to a new report from Deltek, federal health IT spending will continue to grow despite a relatively flat IT market. In order to combat increases in federal expenditures for health, which are expected to grow 86% to $1.7 trillion in 2025, the federal government is seeking to reduce costs, gain efficiencies, improve care quality, promote interoperability, cure disease, and improve overall population health. Health IT investments aimed at digitizing, sharing, analyzing and securing health information will drive strong federal spending in this market segment over the next five years. Deltek's Federal Health Information Technology Market, 2016-2021 report provides analysis of the trends and drivers shaping the federal health IT marketplace, and predicts investments growing from $6.0 billion in FY 2016 to $6.4 billion in 2021 at a Compound Annual Growth Rate (CAGR) of 1.4%.

Federal agencies acting as health care payers, promoters and providers such as such as the Defense Health Agency and Veterans Affairs will continue to invest in technologies and solutions to improve health outcomes and reduce waste, fraud and abuse. The Defense Health Agency’s worldwide implementation of a new electronic health records system and the Department of Veterans Affairs’ creation of an entire digital health platform will continue to sustain spending in the federal health IT market.


  • Electronic Health Record (EHR) Investments – Growth in federal health IT contractor addressable spending will be supported by investments in EHR and solutions to improve population health and combat disease.
  • New Administration Priorities – Future health initiatives remain largely uncertain under the new presidency. The Trump administration has clearly stated its intent to repeal and replace or modify the Affordable Care Act, which would impact funding for agencies involved in health care delivery and payment. However, Defense and VA spending may be insulated or even increased as part of the new administration’s stated commitment to support the nation’s military and veterans.
  • Data-Centricity – Federal health IT areas focus largely on data: data standardization, data integrity, data exchange, data analytics, data storage and interoperability. Other priorities include infrastructure modernization, legacy system modernization, cloud adoption, telehealth and mobile applications.
  • Policy and Legislation – Legislation such as the HITECH Act, MACRA, and the 21st Century Cures Act, promote population health and the use of health IT on a nationwide level, but provide relatively limited funds to agencies for the implementation of health IT. Opportunities will largely come from agencies balancing existing funds.
  • Provider Market Dominates – Deltek expects the provider market segment, consisting primarily of VA and DoD, to show the most year-over-year growth due to EHR initiatives, as well as VA efforts to implement its digital health platform.


“Although future health initiatives remain largely uncertain under the new presidency, the need to update or replace EHRs, establish interoperability, spur medical innovation, and improve outcomes will drive demand for contractor solutions and support.”

Angie Petty, Senior Principal Research Analyst, Deltek

“Given the focus on reducing health care costs, contractors with solutions that help agencies leverage its vast volumes of data to increase health care effectiveness and root out waste will be well positioned in this market.”

Deniece Peterson, Director of Research, Deltek


According to #Deltek report, fed health IT spending to grow from $6.0B in FY16 to $6.4B in FY21 http://ow.ly/Q5Yl308ujTU

#Deltek report: DoD and VA investments to help drive fed health IT spending over the next five years http://ow.ly/Q5Yl308ujTU

Fed health IT spending to remain strong under new admin. w/ need to reduce fed health care expenditures. #Deltek http://ow.ly/Q5Yl308ujTU

For more information on GovWin IQ and this report, visit the “Federal Information Security Market, 2016-2021” page on Deltek.com/GovWin. The report is free to subscribers of GovWin’s Federal Market Analysis program.

About Deltek

Deltek is the leading global provider of enterprise software and information solutions for government contractors, professional services firms and other project-based businesses. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. 22,000 organizations and millions of users in over 80 countries around the world rely on Deltek to research and identify opportunities, win new business, recruit and develop talent, optimize resources, streamline operations and deliver more profitable projects. Deltek – Know more. Do more.® www.deltek.com 

For further information contact:

Lauran Cacciatori
Vice President, Corporate Marketing and Communications Deltek
+1 703.885.9947