Defense Secretary Donald Rumsfeld and his leadership team have rejected a push by the Joint Chiefs to create a joint medical command or some other military-led entity to control what the chiefs fear are runaway Tricare costs.
Not only have Rumsfeld and staff rejected the idea of giving military officers greater control over health care resources, but they are expected to dissolve the advisory panel that backed the idea, the 2-year-old Defense Medical Oversight Council, sources said.
Whether it was weak civilian leadership, hidden medical costs or some other conditions that led to formation of the council, they no longer exist, Rumsfeld’s staff has suggested. The council no longer will be the dominant voice in debates over the future of military medicine.
Co-chaired by one of the services’ vice chiefs on a rotating basis, and supported administratively by the Joint Staff, the group has been a powerful tool of the Joint Chiefs of Staff in driving medical reforms since 1999. Under the auspices of Rudy de Leon, then under secretary for personnel and readiness, the council pressed the office of the assistant secretary of defense for health affairs to accelerate Tricare reforms for patients and providers alike and to document chronic under-funding of military medical budgets during the Clinton administration.
The council, with de Leon as its other co-chairman, also educated senior line officers — the war fighters — on the importance of health care for troop morale and readiness and on factors driving up costs including waves of new drugs and critical medical technologies.
But even as Tricare services improve, the Joint Chiefs and the military surgeons general, who oversee military medical staffs and facilities, have become increasingly alarmed and frustrated by the rising cost of Tricare support contracts, which, in turn, squeeze dollars available for the direct care system.
Most informed observers blame the sharp rise in contractor costs on poor fiscal management during the Clinton era. Year after year, military clinics and hospitals were left short of funds, forcing patients to use far more costly Tricare provider networks. Maj. Gen. Paul K. Carlton, Air Force surgeon general, calls it a medical budget "death spiral."
In an April 24 memo to Rumsfeld, Joint Chiefs chairman Army Gen. Henry "Hugh" Shelton, warned that a "critical fiscal situation" for military health care "is exacerbated by a diluted organizational structure" struggling to provide "essential medical benefits to dependents and retirees while ensuring the availability of contingency medical capabilities for our active duty troops."
Shelton credited the council with stopping "a potentially disastrous multibillion dollar contract" that Tricare had negotiated with companies running its civilian provider networks. He urged Rumsfeld now to consider council recommendations for improving the contracts and reorganizing the health care system.
Whether Rumsfeld ever sat for a brief on the council recommendations is unclear. But they angered some senior Defense officials who, in recent weeks, decided "the line" was seeking too prominent a role in managing military medicine. Some criticized the group for faulty logic in trying to reorganize the medical system out of what amounts to a money problem.
In a June 28 interview, Dr. David Chu, the department’s new under secretary for personnel and readiness, avoided discussing council and reports that it has held its last meeting. He only praised the council’s role in sensitizing uniformed leaders to the impact of timely, quality health care on morale and readiness.
Chu did reject the idea of reorganizing military medicine, at least from the top down.
"It’s a little early for the administration to decide exactly what the governance of this system needs to be…It may be different, I acknowledge that," Chu said. But he leans toward giving regional Tricare managers more control rather than the "Stalinist model [where] we do everything from the center."
As far as controlling future Tricare costs, Chu said the Tricare Management Activity, as established under the office of assistant secretary of defense for health affairs, already has that authority and it has been clarified through a newly signed directive.
"I’m looking to them to make sure we begin to achieve what Secretary Rumsfeld has set as the goal here: a world class medical system," Chu said.
But the Joint Chiefs remain concerned that the current organizational structure won’t be able to control medical costs, said an official familiar with their views on the issue. They worry that military medicine is "the Pac Man of future defense budgets," swallowing resources of other programs at an alarming pace.
There is "terrible inefficiency," he said. The council "has been used to provide some level of oversight and efficiency that was lacking. The bottom line is you have this large budget number in medical ($18 billion a year) that is basically managed by a staff, instead of a command, and through three separate services."
"If they are going to get these costs under control, it’s not going to happen as the system is organized now," he said.
But Chu said proper funding of both the direct care system and Tricare support contracts — which form a "grand partnership" — is key to controlling costs, and this administration is committed to proper funding. As that occurs, he said, "perverse incentives that produced the kinds of things Gen. Carlton complained about" will "die away."
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