Defense officials have asked Congress to approve a new structure for the military health care system that, as with higher Tricare fees, would help to curb runaway medical costs.
The centerpiece of the plan is to elevate Tricare management to a more powerful Defense Health Agency, with new authority to more effectively use the military’s direct care system and to more carefully manage purchased care through Tricare support contractors.
The health agency would impose new business practices and appoint market managers in areas with multi-service medical facilities to streamline operations. The agency also would reduce redundancies across the separate medical commands of the Army, Navy and Air Force by combining functions for purchasing, logistics and information technology.
Each branch’s medical commands would continue to run separately, a concession to those who believe they provide specific strengths and expertise. But to critics, including some lawmakers, who still want a joint medical command running military health care, as numerous studies have endorsed, the health agency should be seen as a reasonable interim step, said Dr. Jonathan Woodson, assistant secretary of defense for health affairs.
“The Defense Health Agency will be an important pillar of any unified health command if that, indeed, were considered down the line,” Woodson said.
The strongest reason to keep Army, Navy and Air Force medical commands, led by separate surgeons general, is operational medicine, Woodson said. The Navy is trained to deliver care to units afloat and to deployed Marines, the Air Force has expertise in aerial platforms and Army doctors are trained to deliver medical ground support in combat areas.
“The whole idea is not to throw the baby out with the bathwater. To design a system that creates … the best quality in health care (and) access, but preserves the unique features that individual service cultures bring to the fight,” Woodson said.
A Pentagon task force established last June drafted the new governance plan. But Congress temporarily blocked it, demanding a report from the department that describes every option studied, the potential impact on readiness and their projected cost savings.
The health agency would be led by a three-star officer and would report to Woodson, the department’s most senior health official. The surgeons general would focus more heavily on operational medicine and less on the garrison care and insurance benefits for troops, retirees and their families.
The Washington, D.C., area, which has seen heavy realignment of medical facilities with a new hospital at Fort Belvoir, Va., and the Walter Reed National Military Medical Center consolidation at Bethesda, Md., would see another change. These new hospitals now fall under the Joint Task Force National Capitol Region Medical, which is led by a three-star admiral who reports to the deputy defense secretary. The joint command would be replaced by a two-star run directorate, which would report to the health agency.
With the plan delivered, the Government Accountability Office, Congress’ auditing arm, now has 180 days to review recommendations, comment on strengths and weaknesses, and report its own estimate of savings to House and Senate defense committees. Lawmakers gave themselves an additional 120 days to study the GAO’s findings and the task force report, and then to accept, reject or modify what the department’s proposal.
After the combined 300-day review period, Woodson said, “we are hopeful we will get the OK” to restructure. The savings from creating the health agency would be modest, about $50 million a year through reduced staffing, shaved off a health care budget that will top $53 billion this year.
But more substantial savings – in the billions of dollars annually – are expected once the health agency is operating to eliminate waste and can impose new business processes on military hospitals and clinics, and on purchased care contracts that govern Tricare civilian networks.
Woodson said about 25 percent of on-base hospitals and clinics are underutilized. So a key goal of the health agency will be to fully use brick-and-mortar resources and reverse the exodus in recent years of patients to the more costly civilian Tricare network.
It might appear the surgeons general are losing some authority, particularly in areas with multi-service medical facilities. But Woodson said operational medicine would gain from new administration as dollars are spent more wisely. For example, if a base hospital sees its orthopedic specialist deployed for war, a health agency-run system will have more replacement options than to send patients to a civilian specialist until the doctor returns.
A decade of war shows that “unless you have a coordinated strategy that reaches across the services, we get a local solution,” which usually means patients go off base for care and they are hard to get back.
The health agency would develop the requirements and have the surgeons general fulfill them. “Unless you have this collaborative administration structure,” Woodson said, the services would continue to operate “in their own little silos” and, as current cost growth shows, “that just doesn’t work.”
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