VA awarded $530.8M in Q2 FY17 to TriWest Healthcare Alliance for physician services in Arizona

Contract Overview

Contract Amount: $530,845,894 ($530.8M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-01-01

End Date: 2017-03-31

Contract Duration: 89 days

Daily Burn Rate: $6.0M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: EXPRESS REPORT: TRIWEST IGF::OT::IGF HEALTHCARE SPEND FOR CHOICE FOR FY17 Q2

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85080

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $530.8 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: TRIWEST IGF::OT::IGF HEALTHCARE SPEND FOR CHOICE FOR FY17 Q2 Key points: 1. The contract represents a significant portion of the VA's healthcare spending in the specified period. 2. Competition dynamics for this contract are crucial for understanding price discovery and value for money. 3. Performance context is essential to evaluate the effectiveness of healthcare services delivered. 4. Sector positioning highlights the VA's reliance on large-scale contracts for healthcare provision. 5. Risk indicators may include contractor performance history and the complexity of healthcare delivery.

Value Assessment

Rating: fair

This contract awarded to TriWest Healthcare Alliance Corp for $530.8 million in Q2 FY17 for physician services in Arizona requires further benchmarking. Without comparable contract data for similar services and geographic scope, a precise value-for-money assessment is challenging. However, the fixed-price incentive contract type suggests an attempt to align contractor incentives with cost control, which can be a positive indicator if managed effectively. The duration of 89 days for this delivery order is relatively short, implying it might be part of a larger program or a specific, time-bound initiative.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally favorable for price discovery and can lead to more competitive pricing for the government. The number of bidders and the specific evaluation criteria used would provide further insight into the strength of the competition. A robust competitive environment suggests that the selected contractor, TriWest Healthcare Alliance Corp, offered a compelling proposal relative to its peers.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces. It ensures that the government explores a wide range of options, potentially leading to better service quality and more efficient use of public funds.

Public Impact

Veterans in Arizona are the primary beneficiaries, receiving physician services through this contract. The contract facilitates access to healthcare services, potentially improving health outcomes for eligible veterans. Geographic impact is concentrated within Arizona, where TriWest is contracted to provide services. Workforce implications include the employment of physicians and support staff by TriWest to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the delivery order's requirements are not clearly defined.
Ensuring consistent quality of care across all contracted services is a potential concern.
Monitoring contractor performance against incentive targets is critical for cost control.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Fixed-price incentive contract type aims to align contractor and government interests for cost efficiency.
The contract addresses a critical need for healthcare services for veterans.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on physician services. The market for healthcare services, particularly for government entities like the VA, is substantial. Large-scale contracts are common for providing comprehensive care to specific populations. Benchmarking this spending against other VA contracts for similar services or against private sector healthcare provider costs would offer further context on its scale and efficiency.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. As this was a full and open competition, it is possible that small businesses participated as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business involvement and its impact on the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would be embedded in the contract terms, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases, though detailed operational oversight specifics are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs Healthcare Services
Community Care Network (CCN) Program
TRICARE Program (DoD Healthcare)

Risk Flags

Potential for cost overruns under Fixed Price Incentive contract type.
Ensuring consistent quality of care across a large network.
Complexity of managing large-scale healthcare delivery contracts.
Dependence on contractor performance for veteran healthcare access.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $530.8 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: TRIWEST IGF::OT::IGF HEALTHCARE SPEND FOR CHOICE FOR FY17 Q2

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $530.8 million.

What is the period of performance?

Start: 2017-01-01. End: 2017-03-31.

What is TriWest Healthcare Alliance Corp's track record with the Department of Veterans Affairs prior to this contract?

TriWest Healthcare Alliance Corp has a significant history of contracting with the Department of Veterans Affairs, particularly in providing healthcare services to veterans in specific regions. Prior to this Q2 FY17 award, TriWest was known for its role in the VA's network of community care providers. Their experience often includes managing large-scale healthcare delivery networks and serving geographically dispersed veteran populations. Understanding their performance on previous contracts, including any challenges or successes in meeting quality metrics, cost targets, and patient satisfaction, is crucial for assessing the reliability and effectiveness of their current service provision. This historical context helps in evaluating potential risks and benefits associated with awarding substantial contracts to the organization.

How does the $530.8 million spending in Q2 FY17 compare to the VA's overall healthcare expenditures for physician services?

The $530.8 million awarded to TriWest Healthcare Alliance Corp in Q2 FY17 represents a substantial investment in physician services for a specific region (Arizona). To contextualize this figure, it's essential to compare it against the VA's total healthcare spending for that fiscal year and quarter, as well as its spending on similar physician services nationwide. If this amount constitutes a significant percentage of the VA's total physician service budget, it highlights the scale of this particular contract and the VA's reliance on it. Conversely, if it's a smaller fraction of the overall budget, it suggests a more diversified approach to healthcare procurement. Analyzing trends in VA healthcare spending over time, including the proportion allocated to community care versus in-house services, would further illuminate the strategic importance and financial weight of this contract within the broader VA healthcare system.

What are the primary risk indicators associated with a contract of this magnitude and type (Fixed Price Incentive)?

Contracts of this magnitude, especially Fixed Price Incentive (FPI) types, carry several inherent risks. For an FPI contract, a key risk is the potential for cost overruns if the target cost and incentive sharing mechanisms are not well-defined or if unforeseen circumstances drive up expenses. The government might end up paying more than initially anticipated if the contractor exceeds cost targets, even with incentives. Another risk relates to contractor performance; ensuring TriWest delivers the contracted physician services at the required quality and accessibility standards is paramount. Performance failures could lead to disruptions in veteran care, increased costs for corrective actions, and reputational damage for the VA. Furthermore, the complexity of managing a large healthcare network introduces risks related to administrative inefficiencies, data security, and compliance with healthcare regulations. The geographic concentration in Arizona also presents a risk if local healthcare market dynamics or unforeseen events (like natural disasters) impact service delivery.

How effective has the VA been in achieving its program objectives through similar community-based healthcare contracts?

The effectiveness of the VA's community-based healthcare contracts, including those with providers like TriWest, has been a subject of ongoing evaluation and policy adjustment. These contracts aim to expand healthcare access for veterans, reduce wait times, and provide specialized services not always available within VA facilities. Success is often measured by metrics such as veteran satisfaction, timely access to care, quality of services rendered, and cost-effectiveness. While these programs have generally succeeded in increasing access and offering more choice, challenges have included ensuring seamless care coordination between community providers and the VA, maintaining consistent quality standards across a diverse network, and managing program costs effectively. The VA has continually refined its approach, including restructuring its community care network, to address these challenges and improve overall program outcomes for veterans.

What are the historical spending patterns for physician services within the VA, and how does this contract fit?

The VA's historical spending on physician services has shown a consistent and significant trend, reflecting the large and complex healthcare needs of the veteran population. Over the years, the VA has increasingly utilized community-based providers to supplement its internal capabilities, leading to a rise in contract spending for various medical services, including physician consultations and treatments. This $530.8 million award to TriWest in Q2 FY17 for physician services in Arizona fits within this broader pattern of leveraging external healthcare networks. It represents a substantial, albeit potentially short-term (given the 89-day duration), allocation of resources towards ensuring veterans in a specific region have access to necessary medical expertise. Analyzing historical data would reveal whether such large, regional awards are typical, or if this represents an anomaly or a response to specific program needs or market conditions at the time.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 16010 N 28TH AVE, PHOENIX, AZ, 85053

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $530,845,894

Exercised Options: $530,845,894

Current Obligation: $530,845,894

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline