Following the surprising conclusion of the US presidential election, the outlook for tech vendors remains positive, even if the future direction of US policy is unclear. The advances the US government has made in adopting technology to support its transformation objectives are unlikely to be undone by the new administration, no matter what direction the new administration's policies take; within a tight fiscal operating environment, extra spending can only come from doing things differently and more efficiently. Opening up healthcare and education markets will require investment at the federal and service provider level. Federal agencies with investment plans in place may have to revise those plans, but those that have made the investment to move to more flexible deployment models will be best placed to react. For the others, this should be an opportunity to review and revise their IT plans.
Will Donald Trump trigger major changes to the delivery of public services?
The US has just had its equivalent of "Brexit." However, unlike the UK, the US is not going to have to wait two years to find out what the result will mean. Many on Capitol Hill have not prepared for this, and while there are 100 days until his inauguration, Trump will not waste time in setting out his agenda. With control of the upper (Senate) and lower house (House of Representatives), Trump has the opportunity to pursue his vision for government with much more ease than his predecessor. So what can we expect from the most unlikely of winners in this bizarre presidential election and what does this mean for tech in the US public sector?
Increasing competition in healthcare and education
For healthcare, this will mean undoing Obamacare, which has proven to be popular with those on low incomes who had previously struggled with paying for healthcare, but unpopular with those who pay for healthcare coverage and who have seen their premiums increase. Trump has said he wants to move away from state funding to a savings model and increase competition by allowing healthcare insurers to sell coverage across state lines. Any change will have implications on the insurer side, which will be tasked with helping to implement the scheme. There will be questions about what this means for programs that have been aimed at employers subsidizing employees and the impact on healthcare providers that are already facing financial constraints. However, it will likely make the implementation of patient relationship management tools more important as relationships become more fragmented.
On education, Trump has given only limited indication of the direction he is likely to take, claiming he wants to direct $20bn in federal grants to help poor families get access to a school of their choice, and to move away from Common Core standards, which he thinks are a "disaster." Rather than providing funding directly to institutions, Trump has proposed the portability of grants – giving block grants at the state level, which would then follow the student to the school that they are attending – introducing more competition into the market for capturing and retaining students. Critics of the model claim this favors secular schools and those run for profit, while those in favor say it helps to raise standards and promotes choice. Opening up the market to further competition will increase the importance of the student experience in retaining students, as well as the funding that is attached to them. Linking up student data to provide a better picture of those at risk of changing schools or dropping out will become a strategic issue for providers.
Trump will also aim to shrink the size of the bureaucracy in Washington, DC. As others have found, shrinking the leviathan is not an easy task and one that cannot be accomplished within election timetables such as four years. So what can he do? He has already said he will focus on stopping the revolving-door policy of hiring recent ex-federal staff as consultants. However, this could do more harm than good. If there is a large exodus of high-caliber and skilled staff, how will departments fill the gap? It also raises the question of funding for programs aimed at modernizing tech in the federal government such as F18 and FedRAMP. Trump might reduce the barriers to swapping out tech and push down expenditure that way. Certainly, the high cost and length of time needed to get Authority to Operate (ATO) under FedRAMP has been a barrier to uptake.
To an extent, his ability to enact change will depend on his ability to deal with the problem of budgets. The US already has a record-breaking budget and is unlikely to be able to afford "white elephant" projects. Money will have to be diverted from somewhere; international projects could suffer and a focus on savings will come back round. The potential freeze on both staffing and large unfunded projects will put those projects at risk, but there is a silver lining. Capital projects now include a large amount of tech, from transport through to schools and hospitals. Cities should be considering how to tie this together with smart city projects.
Chris Pennell, Practice Leader, Public Sector