[8.1] Innovations in Veterans Administration Discussion What clinical service and/or service delivery system innovations can be bought to the Veterans Administration? These systems/innovations may relate to new technology or resources that can be utilized or other areas that you say consider relevant to the discussion. Be specific.250 words include references and citations. Mooney, D. (2001). SWOT Analysis – A structured way to plan (Links to an external site.)Links to an external site.. Retrieved from http://www.amputee-coalition.org/communicator/vol2…JRC. (2005). SWOT (Strengths Weaknesses Opportunities and Threats) Analysis (Links to an external site.)Links to an external site.. Retrieved from http://forlearn.jrc.ec.europa.eu/guide/2_scoping/m…Jurevicius, O. (2013). SWOT Analysis – Do it properly! (Links to an external site.)Links to an external site. Retrieved from http://www.strategicmanagementinsight.com/tools/sw…


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Department of Defense
Task Force on the
Future of
Military Health Care
f i n a l
A S u b c o m m i tt e e o f t h e
D e f e n s e H e a lt h B o a rd
R e p o r t
Department of Defense
Task Force on the
Future of
Military Health Care
f i n a l
A S u b c o m m i tt e e o f t h e
D e f e n s e H e a lt h B o a rd
December 2007
R e p o r t
Department of Defense
Task Force on the Future of Military Health Care
December 20, 2007
The Honorable Robert M. Gates
Secretary of Defense
The Pentagon
Washington, D.C. 20301
Dear Mr. Secretary:
The Task Force on the Future of Military Health Care is pleased to submit to
you the following report summarizing our work.
The Task Force was created to assess and recommend changes that would help
sustain the military health care services being provided to members of the
Armed Forces, retirees, and their families. With the mission specified in the
John Warner National Defense Authorization Act for Fiscal Year 2007 (Section
711 of P.L. 109–364) as a constant guide, the Task Force presents this report of
its findings.
The Task Force held public hearings, reviewed studies and research regarding
program and organizational improvements to the military health care system,
and visited military health care sites. As part of the public hearings, the Task
Force also has heard extensive testimony related to improving business and
management practices and realigning fee structures, which is a major focus of
our findings and recommendations. The Task Force has laid a solid framework
to sustain and improve the future of military health care.
In preparing the report, we were motivated by a belief that the members of our
Armed Forces, their families, and military retirees, who have made and who
continue to make enormous personal sacrifices in defending America, deserve a
health care system that is flexible, effective, and cost-efficient. In summary, the
system should provide much needed health care while considering fairness to
the American taxpayer. We are confident that the general findings in this report
represent a strong start toward achieving our goal.
Gail R. Wilensky, Ph.D.
John D.W. Corley, General, USAF
Department of Defense
Task Force on the Future of Military Health Care
General John D.W. Corley
Dr. Gail R. Wilensk y
USAF, Co-Chairman
Nancy Adams
Mr. Lawrence Lewin
Major General, USA, Retired
Mr. Shay A s sad
Rear Admiral John Mateczun
Dr. Carolyn M. Clancy
Richard B. Myers
General, USAF, Retired
Dr. Rober t Galvin
Lieutenant General Jame s Roudebush
The Honorable Rober t Hale
Rear Admiral David J. Smith
The Honorable Rober t J. Henke
Rober t W. Smith III
Major General, USA, Retired
Ta s k F o r c e o n t h e F u t u r e o f M i l i ta r y H e a lt h C a r e
Executive Summary
1. Introduction
2. Guiding Principles
3. Overview of the Military Health System
4. Direct and Purchased Care in the Military Health System
5. Business and Health Care Best Practices
6. The Military Health Care Procurement System and
Contracts for Support and Staffing Services
7. The Reserve Component and Its Health Care Benefit
8. Managing the Health Care Needs of Medicare-Eligible
Military Beneficiaries
9. The DoD Pharmacy Program
10. Retiree Cost-Sharing
11. A ppropriate Mix of Military and Civilian Personnel for
Readiness and High-Quality Care
12. Command and Control Structure to Manage the Military Health System
A. Task Force Biographies
B. Authorizing Language and Charge to the Task Force
C. Preliminary Findings and Recommendations from
the Task Force’s Interim Report
D. Meetings and Presentations
E. Recommendations of Previous Review Groups
F. DoD Guidance/Oversight of Wellness Initiatives
G. Additional Information on Procurement and Contracting
H. The Reserve Component
I. Previous DoD Pharmacy Cost Control Measures
J. Synopsis of Proposed TRICARE Enrollment and
Deductible Fees—Unindexed
K. Implementing Our Recommendations
L. Acronyms
M. Task Force Staff
The members of the Task Force wish to express their deep gratitude to the men and
women of the Armed Forces of this Nation. We recognize that those who serve, and
those who have served, have made many sacrifices that most citizens have not been
asked to make. Many service members have been placed in harm’s way to protect
this Nation and its essential values and interests. These men and women have
responded to frequent and extended deployments to dangerous and remote places.
Their families have shared a heavy burden as well.
The Task Force, by the nature of its responsibilities and duties, was required to
examine an array of topics outlined in its congressional charter. It considered
military health care within the larger context of U.S. health care. It reviewed
considerable data in the civilian sector and compared military health care benefits
to those provided by many U.S. employers, and also compared the costs. Health care
costs are rising rapidly for the entire Nation, accounting for an ever larger share of
gross domestic product and stressing many measures of affordability, such as income
and wages. Nonetheless, the Task Force in its deliberations was mindful of the unique
role in society of military service and the military health care system and of the fact
that at least some of its value and capability is not subject to the kind of cost-benefit
or efficiency measures and analysis that might be applied to the private health
care system.
The Military Health System, like most employer-sponsored health care plans,
purchases health care, but, unlike most employer-sponsored plans, it also provides
direct care to its members and other eligible beneficiaries. In addition, while the
Active Duty force has been downsized since the end of the Cold War and many
Military Treatment Facilities have closed, the size of the nonactive population of
eligible beneficiaries has grown, and purchased health care has become a larger part
of the defense health care budget. Yet as the Task Force recognized, at all times, the
Military Health System must be appropriately sized and resourced to assure that the
military can perform the full range of missions directed by national leadership. This
includes ensuring that service members are fit to deploy for arduous duty, often to
dangerous places, where they can become casualties of war. They must have, and
they deserve, high-quality health care.
In its deliberations, the Task Force also recognized that military retirement is not
like most civilian retirement systems. To encourage military members to choose the
military as a career, the retirement system provides for no vesting until actual
retirement, which typically consists of at least 20 years of service (or the equivalent,
using a point system for members of the Reserve Component). Members are subject
to recall after retirement if their service is needed in time of national crisis. In
addition, members often are required to retire earlier than civilians, sometimes
upon a fixed number of years of service. Moreover, the entire military compensation
system differs from the typical civilian “salary” system because much of the compensation is “in-kind” or “deferred.” Thus, changes in the health care benefit must be
examined in the context of this unique system and its compensation laws, policies,
and programs.
In this report, the Task Force endeavored to find the right balance between ensuring
a cost-effective, efficient, and high-quality health care system for military beneficiaries and managing a system with spiraling costs that, if unchecked, will continue to
create an increasing burden on the American taxpayer. Clearly, health care for
service members is paramount, and the Military Health System can make many
adjustments to streamline its operations and achieve heightened effectiveness while
continuing to provide high-quality care. At the same time, the system cannot be
sustained at the current level without some degree of accountability and contribution
from military retirees. Americans everywhere are paying high costs for health care.
While military retirees deserve a more generous benefit because of their sacrifices
and years of service, relatively modest increases in out-of-pocket costs will not only
help stabilize the system and make it more accountable, but will also be looked upon
as being appropriate by the American taxpayer. In addition, this modest contribution
will help sustain the military health care system for the future, when today’s Warfighters
will rely on it in their retirement. The Task Force recognizes that its proposals,
if accepted, will not be able to resolve the future budgetary problems that the
Department of Defense will face as a result of rapid, future increasing costs of the
Military Health System. These are issues that will need to be addressed by the
Department of Defense and Congress in the years to come.
es 1 .
Executive Summary
The provision of health services and health benefits is an established and significant
mission of each service branch of the U.S. military. The extent and volume of health
care services provided through military programs have grown dramatically since
World War II, resulting in the world’s largest military health care system. This system
serves several distinct categories of beneficiaries, including Active Duty military
personnel, families of Active Duty personnel, reservists, and military retirees and
their dependents. Unlike civilian health care systems, the Military Health System
must give priority to military readiness; the Nation’s engagement in a long war on
terror; the support of a conventional war, if necessary; the provision of humanitarian
relief and response to natural disasters; and the achievement of other missions
required by national command authorities.
Given the current and likely future commitments of the military, it is urgent that
several persistent and new challenges facing today’s current Military Health System
be addressed. These include a complex health care environment that demands
increased emphasis on best practices; the need for efficient and effective procurement
and contract management; rising costs; the expansion of benefits; the increased use
of benefits by military retirees and the Reserve military components; continued
health care inflation; and TRICARE premiums and cost-sharing provisions that have
been level for nearly a decade.
These challenges must be considered in the contexts of the current and ongoing
needs of Active Duty military personnel and their families, the critical need for
medical readiness of Active Duty military personnel, the aging of the military retiree
population, and the broader backdrop of the U.S. health care economy, in which the
military health care system operates. To sustain and improve military health care
benefits for the long run, actions must be taken now to adjust the system in the
most cost-effective ways. The Military Health System must be appropriately sized,
resourced, and stabilized to ensure force readiness and the provision of the highest
quality, most cost-effective health care to beneficiaries.
Congressional concerns about the rising costs of the military health mission were
reflected in Section 711 of the National Defense Authorization Act for Fiscal Year
2007, which established the Task Force on the Future of Military Health Care to
make recommendations to Congress on a broad range of military health care issues.
Rising health care costs result from a multitude of factors that are affecting not
only the Department of Defense (DoD), but also health care in general; these
factors include greater use of services, increasingly expensive technology and
pharmaceuticals, growing numbers of users, and the aging of the retiree population.
This is the Task Force’s final report to Congress; the interim report was delivered
in May 2007. Since its first meeting on December 21, 2006, the Task Force convened
13 public meetings in Washington, D.C., and meetings in San Antonio, Texas, and
Norfolk, Virginia, to gather information pertinent to the topics listed in its charge.
It received informational briefings and written statements and held discussions
with stakeholders of the Military Health System and other experts in health care
es 2 .
management and financing. In August 2007, four members of the Task Force travelled
to Qatar, Iraq, and Germany to meet with leadership at Military Treatment Facilities
at operating bases to discuss issues of concern relating to health care delivery, health
care operations, medical personnel morale, and organizational structure.
The Task Force also reviewed reports, studies, and reviews produced by the Government Accountability Office, the Assistant Secretary of Defense (Health Affairs), and
others, as specifically directed in its charge. In developing its recommendations, the
Task Force sought strategies that are based on the best information available, with
rationales that can be clearly articulated. In addition, as recommendations were
developed, their impact on beneficiaries, especially any financial impact, was
explicitly addressed.
In responding to one element of its charge, the Task Force declined to make recommendations at this time. Given the services’ differing views and the uncertain state of
legislative developments regarding further military to civilian conversions, the Task
Force does not take any position on this matter. Final legislative direction and its
effect on the services’ ability to meet mission requirements, and the demands of
peacetime health care, should be considered before further action is recommended.
Finally, although not tasked to review issues pertaining to the recruitment and
retention of medical personnel needed for force readiness and a comprehensive
health care system, the Task Force notes the critical need for focused study and
action in this area.
The Task Force is an independent entity. Thus, based on the authorizing language
creating it and its charge, its members have operated on the premise that deliberations would proceed with no preconceived outcomes or recommendations. Its
starting points were established guidance in law, regulation, and policy. These
guideposts framed discussions and served as departure points in the consideration of
any potential changes to existing policy. The Task Force conducted its deliberations
in an open and transparent process, remaining accessible and responsive to all
concerned constituencies.
Findings and Recommendations
The Task Force concludes that, first and foremost, DoD must maintain a health
care system that meets the military’s readiness needs. DoD should make changes in
its business and health care practices aimed at improving the effectiveness of the
military health care system. The Task Force also believes that those treated by this
system—military members and retirees as well as their dependents—deserve a
generous health care benefit in recognition of their important service to the Nation.
However, to be fair to the American taxpayers, the military health care benefit must
be reasonably consistent with broad trends in the U.S. health care system.
To implement these overarching conclusions, the Task Force makes several broad
recommendations. Many of these recommendations, if implemented, would affect
the entire Military Health System. Other recommendations are focused on the
health benefits for military retirees. Importantly, the Task Force recommends no
changes in the minimal costs now paid by Active Duty military personnel or their
family members for health care.
T a s k F o r c e o n t h e F u t u r e o f Mili t a r y H e a l t h C a r e
Integration of Direct and Contracted Care
Findings :
The Military Health System does not function as a fully integrated health care
system but is divided into a direct care system, which is itself composed of separate
service systems, and a system of contracted services (e.g., managed care support
contracts and pharmacy). DoD needs a strategy for health care delivery that integrates the direct care system and the contracts supporting DoD health care delivery
(i.e., purchased care). Lack of integration diffuses accountability for fiscal management, results in misalignment of incentives, and limits the potential for continuous
improvement in the quality of care delivered to beneficiaries.
In major markets within the Military Health System, such as the National Capital
Region or San Antonio, there is insufficient planning and accountability at the local
level to ensure integrated provision of services. There is no single point of accountability for costs within a particular market, for services provided to the beneficiary
population, or for health care outcomes.
There are several factors contributing to the lack of an integrated strategy. DoD
procedures do not provide for an integrated approach to accountability and financial
empowerment for managing overall population health care. This is coupled with
fiscal constraints that separate the funding of the direct care and purchased care
systems, thereby limiting the flexibility needed at the local level to make the most
cost-effective and beneficial health care delivery decisions for beneficiaries.
Recommendation 1: Develop a Strateg y for Integrating Direct and Purchased Care
DoD should develop a planning and management strategy that integrates the
direct health care system with the purchased care system and promotes such
integration at the level where care is provided. This strategy will permit the
maintenance and enhancement of the direct care system’s support of the military
mission while allowing for the optimization of the delivery of health care to all
DoD beneficiaries.
Action Items :
• The Office of the Secretary of Defense, the Joint Staff, and the military departments should develop a strategy for health care delivery that integrates the
direct and the purchased care systems.
• DoD should:
– provide incentives that optimize the best practices of direct care and private
sector care;
– fiscally empower the individuals managing the provision of integrated health
care and hold the same individuals appropriately accountable;
– draft legislative language to create a fiscal policy that facilitates an integrated
approach to military health care; and
– develop metrics to measure whether the planning and management strategy
produces the desired outcomes.
es 4 .
Implement Best Practices
Findings :
The Task Force inquiry into best practices was organized into three areas of focus:
1) program evaluation; 2) financial controls, including overall controllership,
eligibility and enrollment, and TRICARE as a second payer; and 3) prevention
and disease management.
Selected aspects of TRICARE contractors’ performance and beneficiaries’ experience of care have been assessed, but this information is not accessible to beneficiaries.
In addition, alignment with public and private sector quality assessment and transparency initiatives is variable. DoD has a substantial opportunity to join with other
major purchasers to be an important part of the solution. Current practices in the
Military Health System are overly focused on controlling unit prices rather than on
clinical and fiscal outcomes. The Military Health System could be well served by its
collaboration with the private sector and other federal agencies and should continue
to improve it.
Recommendation 2: Collaborate with O ther Payers on Best Practices
DoD should charter an advisory group to enhance Military Health System
collaboration with the private sector and other federal agencies in order to
share, adopt, and promote best practices.
Action Items :
• DoD should:
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