Blockchain Saving HHS $30M on First Accelerate Contract

Health and Human Services HHS

Accelerate – the first blockchain-based program in the Federal government to get an authority-to-operate – will save the Department of Health and Human Services (HHS) $30 million over five years, the agency’s CIO said today.

An Accelerate-based neural network did a cluster analysis of 10 years of HHS contracts and provided visibility into price discrepancies across its portfolio, CIO Jose Arrieta explained. HHS used this data to strike a deal with a company that will generate the $30 million of savings over the next five years.

“We negotiated a deal with a company and we’re going to save $30 million over five years. It’s about 52.25 percent discount off of the rate that we’re currently paying. We’ll generate savings immediately in year one. That deal in and of itself more than pays for the investment that we’ve made in Accelerate,” Arrieta said at the Feb. 11 Digital Health CXO Tech Forum.

Arrieta added that HHS is also finding new ways to incentivize companies to work with the Federal government. For example, a $150,000 contract may seem like a drop in the bucket to large companies, but the opportunity to become the first service delivering a new capability to the Federal government may be a bigger future selling point.

Despite the department running about two weeks behind its Accelerate development schedule, Arrieta also announced that HHS is on track to secure another cost-saving contract deal.

“We have another deal that we are working on that we expect to complete sometime in April … We may not hit our target in April, but we think there’s over a $30 million savings opportunity there based on the insights that we have into the data set using HHS Accelerate. So, it’s going well,” he said.

As for other blockchain programs at the department, Arrieta said that “things will happen behind the scenes.” With Accelerate, HHS has already seen the return on investment that’s possible, even though not everyone may fully understand it.

HHS Deputy Secretary Eric Hargan shared an example of a behind-the-scenes technological advancement unrelated to Accelerate that he said has generated billions of dollars of “regulatory savings” through the use of AI-assisted analyses and other initiatives.

“I had all of our regulations … scanned and looked at by AI. I gave it to one of our consultants, and just did some really initial scrubs … We look for old terms that really don’t have any validity anymore,” he explained. “Some of this is clean-up work, some of it is actually moving the needle in terms of removing requirements that are obsolete on people to continue to work in that area.”

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