Massive Health Data Warehouse Delayed Again, A Decade After Texas Pitched It

Texas health regulators are starting from scratch in designing a system to store massive amounts of data — after spending millions of dollars trying to roll out a version that’s now been scrapped.

Charles Smith, executive commissioner of the Texas Health and Human Services Commission, said Monday that his agency had recently nixed a $121 million contract to create an Enterprise Data Warehouse, an enormous database that would store a wide range of information about the many programs the agency administers. First funded in 2007, the project was expected to be up and running a few years after.

Because the original design would not link enough programs at the sprawling agency, regulators would essentially start from scratch on a much larger — and therefore more useful — system, Smith told members of the Texas House State Affairs Committee at a hearing on state contracting reform efforts.

“We were in the process of building a two-bedroom, two-bath home,” he said, likening the effort to a home construction project. “You get it ready to prep your foundation, and I realize my spouse is pregnant with quadruplets.”

The most recent design, which was largely focused on storing data on Medicaid and the Children’s Health Insurance Program “isn’t going to meet the needs of our family," he added.

The update stirred concerns from some lawmakers about the lack of progress on a pricey project with a troubled history.

“Thirty-five million dollars we’ve spent on a project that was supposed to cost $120 million. For that, we have nothing?” asked Rep. Dan Huberty, R-Houston.

“Are we getting back to where we started?” asked Rep. Four Price, R-Amarillo.

Texas has spent $35 million on the project so far, with most coming from federal funds, said Smith, who was appointed to his post in May. About $6 million was tapped from state funds.

Smith did not have an estimate about how much the new, larger project would cost, because those assessments won’t begin until next fall — after the legislative session that begins in January.  

He pushed back against suggestions that spending thus far was for naught, noting that the agency — as part of the planning process — had moved to a new software system that would be used in the new data warehouse.

“We’ll go through and develop a plan, and a timeline, and we’ll come back next session with everything we need to obtain through the process,” he said.

Since the project was first funded, it has suffered myriad delays, as well as uncertainty about whether the federal government would pitch in with additional funding.

In 2013, the Health and Human Services Commission finally invited private companies to submit proposals for the contract. The next year, state officials chose Truven Health Analytics, a Michigan-based firm, as their tentative winner.

But after a series of contracting scandals at the agency prompted the resignation of several high-ranking officials, the state started over, and in November 2014 asked companies to re-apply for the funding.

• Read More Contract High: How Texas outsourced crucial state services for two decades — and got smoked.

Those proposals were due in February 2015, and state officials anticipated the project would begin on Sept. 1 of that year, according to the state’s latest published timeline for the project.

At the time, a spokeswoman for the health commission told the Houston Chronicle that the quality of the project was “more important than the timeline.” The agency nonetheless said it was “still possible” the project would be up and running by the end of 2015.

Smith said his agency needed a warehouse that would give his agency instant access to more data than the scrapped plans accounted for — such as information related to foster care.

“I’m talking to our staff about what is the capacity of our system,” he said. “We don’t know how many families are willing and able.”

Such concerns come at a time when his agency is growing in size and scope. Three of the state’s five health and human services agencies are consolidating into a single “mega-agency” — a reorganization ordered by state lawmakers in 2015.

The other two agencies, which oversee the state’s foster care system and public health infrastructure, respectively, will be considered for consolidation in 2017. State leaders have said that changing the Health and Human Services Commission’s configuration would streamline services and improve efficiency.

Some lawmakers took heart that Smith had refused to follow through with the warehouse’s original design, calling it a thoughtful approach. 

“It sounds like the contract was inadequate,” said Rep. Byron Cook, a Corsicana Republican who chairs the State Affairs Committee. “I appreciate that.”