[Senate Hearing 114-806]
[From the U.S. Government Publishing Office]
S. Hrg. 114-806
DEFENSE HEALTH CARE REFORM
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HEARING
BEFORE THE
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 23, 2016
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.Govinfo.gov/
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COMMITTEE ON ARMED SERVICES
JOHN McCAIN, Arizona, Chairman
JAMES M. INHOFE, Oklahoma JACK REED, Rhode Island
JEFF SESSIONS, Alabama BILL NELSON, Florida
ROGER F. WICKER, Mississippi CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire JOE MANCHIN III, West Virginia
DEB FISCHER, Nebraska JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa JOE DONNELLY, Indiana
THOM TILLIS, North Carolina MAZIE K. HIRONO, Hawaii
DAN SULLIVAN, Alaska TIM KAINE, Virginia
MIKE LEE, Utah ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina MARTIN HEINRICH, New Mexico
TED CRUZ, Texas
Christian D. Brose, Staff Director
Elizabeth L. King, Minority Staff Director
(ii)
C O N T E N T S
_________________________________________________________________
February 23, 2016
Page
Defense Health Care Reform....................................... 1
Loftus, Dr. Bernadette C., Associate Executive Director and 4
Executive-in-Charge for the Mid-Atlantic Permanente Medical
Group.
Fendrick, Dr. A. Mark, Director of the Center for Value-Based 8
Insurance Design and Professor in the Departments of Internal
Medicine and Health Management and Policy at the University of
Michigan.
McIntyre, David J., Jr., President and CEO of TRIWEST Healthcare 18
Alliance.
Whitley, Dr. John E., Senior Fellow at the Institute for Defense 24
Analyses.
Woodson, Honorable Jonathan, M.D., Assistant Secretary of Defense 58
for Health Affairs.
Bono, Vice Admiral Raquel C., USN, Director of the Defense Health 60
Agency.
West, Lieutenant General Nadja Y., USA, Surgeon General of the 69
Army and Commanding General U.S. Army Medical Command.
Ediger, Lieutenant General Mark A., USAF, Surgeon General of the 75
Air Force.
Faison, Vice Admiral C. Forrest, III, USN, Surgeon General of the 79
Navy and Chief, Bureau of Medicine and Surgery.
Questions for the Record......................................... 92
Appendix A--Additional Statements
National Military Family Association......................... 117
Cleveland Clinic............................................. 136
National Guard Association of the U.S........................ 141
National Association of Chain Drug Stores.................... 144
The Fleet Reserve Association................................ 151
The Military Coalition....................................... 157
(iii)
DEFENSE HEALTH CARE REFORM
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TUESDAY, FEBRUARY 23, 2016
U.S. Senate,
Subcommittee on Personnel,
Committee on Armed Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:31 p.m. in
Room SD-G50, Dirksen Senate Office Building, Senator Lindsey O.
Graham (chairman of the subcommittee) presiding.
Subcommittee members present: Senators Graham, McCain,
Wicker, Tillis, Gillibrand, Blumenthal, and King.
OPENING STATEMENT OF SENATOR LINDSEY O. GRAHAM
Senator Graham. The committee will come to order.
I thank everyone for attending.
We meet this afternoon to discuss military health care
system reform and to learn how we can redesign an outdated 20th
century health care system that has become unsustainable and
does not work as well as it should for service men and women
and their families.
We are fortunate to have two panels of distinguished
witnesses joining us today.
On the first panel, we have Dr. Bernadette Loftus,
Associate Executive Director and Executive-in-Charge for Mid-
Atlantic Permanente Medical Group; Dr. Mark Fendrick, Director
of the Center for Value-Based Insurance Design and Professor in
the Departments of Internal Medicine and Health Management and
Policy at the University of Michigan; Mr. David McIntyre,
President and CEO [Chief Executive Officer] of the TriWest
Healthcare Alliance; Mr. John Whitley, Senior Fellow at the
Institute for Defense Analysis.
On the second panel, we have the Honorable Jonathan
Woodson, Assistant Secretary of Defense for Health Affairs;
Vice Admiral Bono, Director of the Defense Health Agency;
Lieutenant General Mark Ediger, Surgeon General of the Air
Force; Vice Admiral Faison, Surgeon General of the Navy;
Lieutenant General West, Surgeon General of the Army.
Senator McCain has made this a priority of the committee to
try to find a way to reform health care. We made a good effort
and I think some breakthroughs in terms of retirement reform.
Now it is health care's turn because it is such a big part of
the budget.
Last year, the Military Compensation and Retirement
Modernization Commission gave us an important report on the
military compensation and retirement system, complete with
numerous recommendations to modernize that system. Without the
commission's great work, we could not have reformed the
military retirement system in the comprehensive way that we
did. We have more work to do.
The commission also made recommendations to assure
servicemembers receive the best possible combat casualty care
to improve access, choice and value of health care for all
beneficiaries and improve support for family members with
special medical needs.
In the NDAA [National Defense Authorization Act] for the
fiscal year 2016, we began the journey to accomplish military
health system reform by requiring DOD [Department of Defense]
to establish and publish appropriate access standards requiring
DOD to be more transparent in the important areas of health
care quality, patient safety, and beneficiary satisfaction by
requiring them to publish outcome measures on public websites,
mandating a pilot program that allows TRICARE beneficiaries to
get urgent care without needing to get a time-consuming,
unnecessary pre-authorization for treatment and requiring the
DOD to implement a pilot program on value-based reimbursement
whereby health care providers are reimbursed for improving
health care economics, outcomes, patient satisfaction, and the
experience of care.
Although the commission published this report over 1 year
ago, we have seen little progress made by DOD to fix the many
problems in their hospitals and clinics. In fact, we continue
to get frequent reports of the difficulties military families
face every day. Here are two examples.
An expectant mother with a high-risk pregnancy moved with
her husband to a new duty station during the 28th week of her
pregnancy. Before being assigned to an obstetrician at the new
duty station, she had to see her primary care manager and get a
pregnancy test, despite the fact that her medical records
verified her high-risk status. After going through all of this,
she still could not get an appointment with a military
obstetrician until the 36th week.
A spouse of a retiree injured her wrist in December and she
scheduled an appointment at Walter Reed for an evaluation. At
the appointment, the provider spent more time berating the
patient for being overweight than examining her wrist. A wrist
x-ray was done, but the provider dismissed the wrist injury as
a carpal tunnel syndrome. No follow-up appointment was given.
One month later, the patient received a letter from the
radiology department at Walter Reed advising her that she had a
broken wrist. The patient now has a cast on her arm.
In my view, these failures to provide timely quality health
care are symptoms of the many ills within the military health
care system. Clearly there are problems. There are centers of
excellence in the system, but these centers are not large
enough and frequent enough. In my view, we have seen a military
health care system designed and structured over decades to
deliver peacetime health care in a way that is being passed by
by time and modernization in the private sector.
On the battlefront, there are many soldiers alive today
that would have died in other wars because of the quality of
military health care. That has to be acknowledged. To those on
the front line of this fight, you have done amazing things.
The purpose of this committee is to learn about how we can
make things better, to listen to the private sector of what
works there, and see if we can take a 20th century health care
system designed to benefit the bravest among us to have better
outcomes, more value, and to make it more sustainable.
With that, I will turn it over to my colleague, Senator
Gillibrand, who has been terrific in everything reform.
STATEMENT OF SENATOR KIRSTEN E. GILLIBRAND
Senator Gillibrand. Thank you, Senator Graham, for your
leadership and the work you do for this committee. I join with
you today in welcoming our witnesses as we begin our discussion
of military health care reform.
I was pleased to read about the many exciting and good
approaches to health care in all of the witnesses' testimony,
including Dr. Fendrick's mention of value-based insurance
design utilized in my home State of New York and I am looking
forward to hearing more about those approaches today.
Last year, the Senate and House Fiscal Year 2016 National
Defense Authorization Act conference report included a
commitment to work with the Department of Defense to begin
reforming the military's health care system. The conference
report called the reforms aimed at improving access, quality,
and the experience of care for beneficiaries.
Today's hearing is the Senate's first step to fulfilling
this agreement. We begin with a panel of experts from outside
the Department of Defense to discuss innovations and best
practices in health care across the U.S. From this panel, we
hope to learn about the possibilities for improving military
health care.
The first panel will be followed by a panel of officials in
charge of health care for our servicemembers, retirees, and
families. From this panel, we expect to hear about current and
prospective future initiatives in the military's health care
system, as well as their assessment of innovations and best
practices described by the witnesses on the first panel.
As we consider changes to the military health care system,
it is critical that we ensure that no servicemembers or their
families are left behind and that the care we provide accounts
for the unique needs of our military community and that any
changes we consider improve access, quality, and experience for
beneficiaries.
I am particularly interested in hearing about innovations
and best practices to address health care of military families
with special needs. I am interested in hearing about the
private sector's management of pediatric populations with
chronic or complex health problems such as those with autism or
other developmental disabilities and how we may be able to
adapt these practices to serving our military families.
Specifically, many on this committee are aware of my work
to
ensure that all military children with autism have access to
ABA [Applied Behavior Analysis] therapy, which is considered
the gold standard treatment to help these kids reach their full
potential. I appreciate that the military has put in place a
demonstration program to help military families, and I am
pleased with this program's success.
However, I am worried that the proposed changes to
reimbursement rates for ABA therapy providers may derail this
program. In your remarks, I would appreciate a discussion of
your recommendations and perspectives regarding families with
special needs children.
Finally, we have to make sure that our military health care
providers maintain the skills and experiences they need to
continue to provide world-class health care to our
servicemembers wounded on the battlefield, and we have to
ensure that those who have served our country bravely return to
a health care system that is able to meet their physical and
mental health care needs. Our servicemembers, retirees, and
their families deserve the highest quality of care.
Again, I thank our witnesses for the time and effort they
have put into this important issue.
Senator Graham. Senator McCain?
Chairman McCain. No. Thank you.
Senator Graham. Dr. Loftus, if you would start.
STATEMENT OF DR. BERNADETTE C. LOFTUS, ASSOCIATE EXECUTIVE
DIRECTOR AND EXECUTIVE-IN-CHARGE FOR THE MID-ATLANTIC
PERMANENTE MEDICAL GROUP
Dr. Loftus. Good afternoon, Mr. Chairman and committee
members. Thank you for the invitation to be here today. I am
Dr. Bernadette Loftus, Executive-in-Charge of the 1,300-
physician Mid-Atlantic Permanente Medical Group at Kaiser
Permanente.
Kaiser Permanente is the largest private integrated health
care delivery system in the United States providing health care
services to 10 million members in eight States and the District
of Columbia. Kaiser Permanente is a high-performing health
system as recognized by the Commonwealth Fund and the National
Committee for Quality Assurance, or NCQA. In 2015, only two
systems in the entire U.S. received a 5 out of 5 rating from
NCQA for both commercial and Medicare patients, and they were
Kaiser Permanente of the Mid-Atlantic States and Kaiser
Permanente of Northern California. In fact, no Kaiser
Permanente plan received lower than a 4.5 out of 5 rating in
2015, a level that only 10 percent of plans achieved
nationwide.
We believe attaining excellent outcomes is based on
understanding and relentlessly measuring performance so that
opportunities for our improvement are continuously identified.
We strategically exploit the full benefits of our electronic
medical record, creating systems of care that make it easy to
do the right thing and hard to do the wrong. This is
accompanied by clear expectations around behavioral norms and
performance for our physicians and staff. The reliable
achievement of better results starts with knowledge of current
results. We measure all aspects of our care at all levels. We
choose metrics for measurement that are evidence-based,
nationally recognized, and reasonably comparable across
geographies and populations. This minimizes distracting
arguments that my patients are so unique, you cannot hold me
accountable for any particular outcome. We do believe we can
fairly assess performance across diverse populations using
these standard measures.
We assiduously measure access to care because, obviously,
without access, quality suffers. We have learned from 2 decades
of studying correlations between patient satisfaction and the
objective speed to access in days that patients have a much
higher standard for access than doctors may feel is strictly
medically necessary. Because of this, we base our access
standards solely on our members' expectations. Our best levels
of patient satisfaction with routine specialty care, for
example, correlate with a speed to access of significantly less
than 10 days from date of referral. We measure and report
access to care daily. The expectation for physician managers is
that the supply of appointments will be managed dynamically on
a daily basis to adjust to the ebb and flow of demand.
The science of excellent access is just that, a science,
although it is a relatively simple one. Supply of available
appointments must always exceed historical demand in order to
ensure great access. Hence, our physician managers are
thoroughly trained on the constant management that must be
brought to bear to maintain access.
High achievement in quality requires the same degree of
performance measurement, analytics, and reporting. Specific to
quality management, we produce monthly variation reports, which
graphically display variation in performance on quality metrics
on multiple levels. These unblinded reports allow us to
identify the high and low performers in similarly situated
practices, and this creates the opportunity for dialogue around
improvement. Data transparency spurs not only dialogue, but a
little competition as well, which in turn engenders more rapid
improvement. Data is delivered directly to every physician's
desktop. Our primary care physicians can, on a daily basis,
check their own performance on quality measures against those
of others in their department.
We do not, however, leave prevention and quality
achievement solely to our primary care physicians. It is our
cultural expectation that every physician, regardless of
specialty, addresses the prevention and chronic disease needs
of every patient she sees. This means that dermatologists and
orthopedic surgeons are as responsible for ensuring that each
diabetic gets his hemoglobin A1c measured timely or that a
woman gets her mammogram that is due, as are those patients'
primary care physicians. We continually collect and analyze
data about our patients' health status and other findings and
use that to create extensive population health registries that
in turn inform decision support software in our EMR [Electronic
Medical Records] so that every physician is alerted at every
visit to every patient that is due for a prevention or
treatment measure. We believe high achievement of quality is
everyone's job.
Again, thank you for today's invitation. I hope the
information provided about Kaiser Permanente will be useful to
you as you consider changes to the military health system and
the TRICARE program. Kaiser Permanente would be honored to
provide further assistance to you in the future and to serve
this population in any way we can.
[The prepared statement of Dr. Loftus follows:]
Prepared Statement by Dr. Bernadette Loftus
Subcommittee Chairman Graham, Ranking Member Gillibrand, and
Members of the Committee, thank you for the invitation to testify
today. I am Dr. Bernadette Loftus, Executive-in-Charge of the Mid-
Atlantic Permanente Medical Group at Kaiser Permanente. As you continue
your efforts to build and maintain a top performing health care
delivery system for the women and men of our armed services and their
families, Kaiser Permanente is pleased to support you and the leaders
of the Military Health System.
introduction and background
Kaiser Permanente is the largest private integrated healthcare
delivery system in the U.S., with 10.3 million members in eight states
and the District of Columbia. We are committed to providing high-
quality, affordable health care services and improving the health of
our members and the communities we serve. Our roots date back to 1945.
Our model was born out of the innovation and ingenuity that mobilized
our nation for World War II when Henry J. Kaiser and Dr. Sidney
Garfield teamed up to provide medical care for tens of thousands of
workers building ships around the clock for the war effort.
Today, Kaiser Permanente comprises Kaiser Foundation Health Plan,
Inc., the nation's largest not-for-profit health plan, and its health
plan subsidiaries outside California and Hawaii; the not-for-profit
Kaiser Foundation Hospitals, which operates 38 hospitals and over 600
other clinical facilities; and the Permanente Medical Groups, which are
multi-specialty group practices employing over 18,000 physicians that
contract with Kaiser Foundation Health Plan to provide or arrange
health care services for Kaiser Permanente's members. Kaiser Permanente
operates in California, Hawaii, Oregon, Washington, Colorado, Georgia,
Maryland, Virginia and the District of Columbia. Many of our service
areas include a significant presence of military personnel and
families.
Kaiser Permanente is honored and grateful to have many former
career military and military-trained physicians, nurses, and other
clinicians working in our system, including some who remain Active in
the Reserves. The training and practice environment of the Military
Health System, as well as the values and mission-driven spirit of the
women and men who join the Military Health System, produce clinicians
who succeed in, and help lead our system. We also appreciate the
ongoing opportunities our clinical and operational leaders have to
collaborate with leaders in the Military Health System to share best
practices and learn from one another.
aligning incentives for high-performing integrated health care delivery
Kaiser Permanente's integrated model of care is based on prepayment
rather than the volume-driven, fee-for-service reimbursement that
dominates U.S. health care. Our integrated delivery system is also
characterized by the direct operation of state-of-the art inpatient and
outpatient facilities, pharmacies, and diagnostic and laboratory
services. Care is delivered primarily by our contracted multi-specialty
physician groups and clinical staff employed by our physician groups,
hospitals, and health plans in each of our regions.
By combining care and coverage in an integrated system, our
physicians are able to prioritize prevention and population health,
while also delivering high quality complex and acute care. Kaiser
Foundation Hospitals and Health Plan's not-for-profit governance
structure means our financial margins are reinvested in care
infrastructure and care transformation, health information technology,
research, workforce training, and the support of community health and
community benefit.
Our advanced electronic medical record, called KPHealthConnect,
allows our clinicians to collaborate in teams, share information
securely, and reduce duplicative testing. It also provides longitudinal
tracking of our members' health, and supports our robust quality
improvement programs. The member-facing component of our electronic
health record, My Health Manager, allows members to exchange secure
email with their care team, schedule appointments, get test results,
and request prescription refills online. These features are also
incorporated in our mobile ``app'' to provide more ways for our members
to connect with us and manage health needs. In 2014, Kaiser Permanente
members sent more than 20 million secure emails to their providers.
delivering high-quality care
Kaiser Permanente is a high performing health system as recognized
by the Commonwealth Fund and the National Committee for Quality
Assurance (NCQA). In 2015, only two systems in the entire U.S. received
a ``perfect'' 5 out of 5 rating from NCQA for both commercial and
Medicare patients, and they were Kaiser Permanente of the Mid-Atlantic
States, and Kaiser Permanente of Northern California. In fact, no
Kaiser Permanente plan received lower than a 4.5 out of 5 rating in
2015, a performance level that only 10 percent of all plans nationwide
achieved.
At Kaiser Permanente, we believe that achievement of excellent
outcomes is based on understanding and relentlessly measuring current
performance, so that opportunities for improvement are continuously
identified. We strategically exploit the full benefits of a uniform
system-wide electronic health record, which we use to create systems of
care that make it easy to do the right thing, and hard to do the wrong.
This is accompanied by crystal-clear expectation around behavioral
norms and performance of our physicians and staff.
a commitment to measuring quality and access
No health care delivery system can reliably achieve better results
unless it knows its current results. At Kaiser Permanente, we measure
all aspects of our care delivery at an individual, local, regional, and
national level. We choose measures that are evidence-based, nationally-
recognized, and reasonably comparable across geographies and
populations. This is to minimize the distracting argument that goes
like this: ``my patients are unique, therefore I cannot be held
accountable to achieve any particular measurement or outcome.'' In
recognition that some patients are sicker than others, we do employ
standard risk-adjustment methodologies where appropriate, primarily
with inpatient quality measures. As a result of our measurement
philosophy, we spend a lot of time on HEDIS (Healthcare Effectiveness
Data and Information Set) measures, \1\ Consumer Assessment of Health
Plans and Systems (CAHPS) \2\ satisfaction measures, and their
inpatient twin, HCAHPS (both developed by the Agency for Healthcare
Research and Quality), and The Joint Commission core and ORYX (Care
Measures) measures. \3\ We feel confident that we can fairly assess
performance, down to the individual practitioner level, across diverse
populations using these measures.
---------------------------------------------------------------------------
\1\ http://www.ncqa.org/HEDISQualityMeasurement/HEDISMeasures.aspx
\2\ https://cahps.ahrq.gov/
\3\ http://www.jointcommission.org/accreditation/performance--
measurementoryx.aspx
---------------------------------------------------------------------------
We also assiduously measure access to care, because there is no
quality of care unless there is first access to care. We have learned
from over two decades of studying the correlation between patient
satisfaction and our objective speed-to-access in days, that patients
have a much higher speed-to-access in days than physicians generally
feel is medically necessary. Because of this, we set our internal
access standards based on our members' expectations. Our best levels of
patient satisfaction with routine specialty access, for example,
correlate with a speed-to-access of less than ten calendar days from
date of referral. We measure and report access in primary care on a
daily basis. The expectation for physician managers is that the supply
of appointments in primary care will be managed dynamically on a daily
basis to adjust to the ebb and flow of demand. We measure and report
specialty access weekly, and expect responsible managers to take action
to augment appointment supply when our predictive models indicate the
likelihood that access will not meet our standards.
The science of excellent access is just that, a science, although
it is a relatively simple one. The supply of available appointments
must always exceed historical demand for appointments, in order to
ensure great access, and so our physician managers are trained and
retrained on the constant management that must be brought to bear to
maintain access.
Advances in technology enable us to augment face-to-face
appointment access with secure email communications between patients
and their physicians, and now video visits. Our prepaid model allows us
to adopt these technologies to create capacity for expanded access
using the most clinically appropriate, convenient options for our
patients. We currently offer video visits through our clinical advice
call centers, which operate 24 hours a day, and we are rolling out the
option of telehealth visits in primary care and many specialties across
our regions. As a data-driven system, we are collecting data and
evaluating patient outcomes as we expand these virtual services. Early
results show our members value these new modalities of care.
High achievement in quality requires the same degree of performance
measurement, analytics, and reporting. Specific to quality management,
we produce monthly ``variation'' reports, which display, with clear
graphics, the variation in performance on key quality metrics between
departments on those same measures. These unblinded reports allow us to
identify the high and low individual performers in similarly situated
practices, and this creates the opportunity for dialogue around
improvement. Data transparency spurs not only dialogue, but a little
competition as well, which in turn engenders more rapid improvement.
Data literally is delivered to every physician's desktop. Our
physicians are able to check their own performance on quality measures
against those of others in their department on a daily basis.
emphasizing prevention and managing chronic conditions
At Kaiser Permanente, prevention and quality is everyone's
responsibility. We do not leave it up to our primary care physicians
alone. It is our cultural expectation that every physician, regardless
of specialty, will address the prevention and chronic disease measures
for every patient she sees. This means that dermatologists and
orthopedic surgeons are as responsible for ensuring that each patient
with diabetes gets his HgbA1c (Glycated Hemoglobin) measured at the
appropriate interval, or that a woman gets her screening mammogram that
may be due, as are those patients' primary care physicians. We
continually collect and analyze data about our patients' health status,
and lab, imaging, and other test results, and use that information to
create extensive population health registries. These registries inform
decision support software in our electronic health record. As a result,
every physician--primary care or specialist--is alerted at every visit
to every patient who is due or overdue for prevention or treatment
measures.
Patients with chronic conditions (i.e. diabetes, asthma, congestive
heart failure, and hypertension) often require the most resources. By
stratifying patients according to diagnosis and need, effective disease
management programs are seamlessly integrated into our care models,
with features that include dedicated case managers, teams that include
nurses, social workers, dieticians, and pharmacists, and clinical
practice guidelines and decision-support tools. By making the right
thing easy to do, our goal is to provide care that is safe, reliable,
effective, and equitable.
conclusion
Once again, thank you for inviting me to testify before the Senate
Armed Services Committee today on behalf of Kaiser Permanente. I hope
that the information provided will be useful to you as you consider
possible changes to the Military Health System and the Tricare program.
Kaiser Permanente would be honored to provide further assistance to you
in the future, and to serve the men and women of the U.S. Military and
their families in any way we can.
STATEMENT OF DR. A. MARK FENDRICK, DIRECTOR OF THE CENTER FOR
VALUE-BASED INSURANCE DESIGN AND PROFESSOR IN THE DEPARTMENTS
OF INTERNAL MEDICINE AND HEALTH MANAGEMENT AND POLICY AT THE
UNIVERSITY OF MICHIGAN
Dr. Fendrick. Good afternoon and thank you, Chairman
McCain, Chairman Graham, Ranking Member Gillibrand, and members
of the subcommittee. I am Mark Fendrick, a primary care
physician and professor at the University of Michigan.
Mr. Chairman, I applaud you for holding this hearing on
defense health care reform because access to quality care and
containing costs are among the most pressing issues for our
military personnel and our national well-being.
Yet, moving from a volume-driven to value-based delivery
system requires a change in both how we deliver care and how we
engage consumers to seek care. Reforming care delivery and
payment policies are important, as you just heard. However,
less attention is paid to how we can alter consumer behavior.
Today I propose that clinically driven consumer incentives,
through the creation of benefit designs that promote smarter
decision-making, can assist us in achieving our clinical and
financial goals.
The most common approach used by payers to impact consumers
in the United States is cost-shifting. With some notable
exceptions, most health plans, including TRICARE, implement
cost-sharing in a one-size-fits-all way, in that beneficiaries
are charged the same for every doctor visit, every diagnostic
test, and every prescription drug.
People frequently ask me if TRICARE members' co-payments
are too high, too low, or just right. The answer, of course, is
it depends. Asking TRICARE members to pay more for all
services, despite clear differences in clinical value, results
in decreases in both non-essential and essential care, which in
certain clinical circumstances lead to adverse health outcomes
and higher overall costs. I see this approach as pennywise and
pound foolish.
Does it make sense to you, Mr. Chairman, that my TRICARE
patients pay the same out-of-pocket cost for essential visits
such as a cardiologist after a heart attack or a therapist for
opioid addiction or autism? They pay the same amount to see a
dermatologist for mild acne. They pay the same for drugs that
are lifesaving for cancer, diabetes, and depression as drugs
that make their toenail fungus go away or their hair grow back.
Realizing that TRICARE members avail themselves to too
little high-value care and too much low-value care, we endorse
smarter, clinically nuanced cost-sharing as a potential
solution, one that encourages TRICARE members to use more of
the services that make them healthier and discourages them away
from the services that do not. We refer to these plans that use
clinical nuance as value-based insurance design, or V-BID. V-
BID simply sets cost-sharing to encourage the use of high-value
services and providers and discourages the use of low-value
care.
For the record, I support high cost-sharing levels but only
for those services that do not make TRICARE members healthier.
The fundamental idea of buy more of the good stuff and less of
the bad stuff has made V-BID one of the very, very few health
care reform ideas with broad multi-stakeholder and bipartisan
political support. Led by the private sector, V-BID has been
implemented by hundreds of private and public employers,
several States, and most recently the Medicare program. It is
common sense. When barriers to high-value services are reduced
and access to low-value services are discouraged, we attain
more health for every dollar.
Therefore, I recommend incorporating V-BID into TRICARE
plans in the following ways.
First, TRICARE plans should vary cost-sharing for services
in accordance to who provides them, such as high-performing
providers, as Dr. Loftus mentioned, or the location of care
based on quality, as well as cost.
Second, TRICARE plans should implement V-BID programs that
combine reductions in high-value services but also include
increases in cost-sharing for low-value care. As we think about
fiscal sustainability, it is important to point out that
immediate and substantial savings are accumulated from waste
identification and elimination.
Last, TRICARE plans should vary cost-sharing based on
information such as clinical risk factors, special needs, and
disease diagnosis.
The successful practice of precision medicine requires
precision benefit design. As cost-sharing becomes a necessity
for TRICARE's fiscal sustainability, I encourage this committee
to take a common sense approach of setting member co-payments
based on whether a clinical service makes a TRICARE member
healthier instead of the status quo, which is basing
contributions exclusively on what they cost. If such an
approach encourages the utilization of high-value care and
discourages only low-value services, these TRICARE plans can
improve health, enhance consumer responsibility, and reduce
costs.
I am honored to support the men and women of the U.S.
military and their families and am happy to provide the
committee further assistance. Thank you very much.
[The prepared statement of Dr. Fendrick follows:]
Prepared Statement by Dr. A. Mark Fendrick
Good morning and thank you, Chairman Graham, Ranking Member
Gillibrand, and Members of the Subcommittee. I am Mark Fendrick,
Professor of Internal Medicine and Health Management & Policy at the
University of Michigan. I am addressing you today, not as a
representative of the University, but as a practicing primary care
physician, a medical educator, and a public health professional. I have
devoted much of the past two decades to studying the United States
health care delivery system, and founded the University's Center for
Value=Based Insurance Design [www.vbidcenter.org] in 2005 to develop
and evaluate insurance plans designed to engage consumers, optimize the
health of Americans and ensure efficient expenditure of our public and
private health care dollars.
Mr. Chairman, I applaud you for holding this hearing on Defense
Health Care Reform, because access to quality care and containing costs
are among the most pressing issues for our military personnel and our
national well-being and economic security. We are well aware that the
U.S. spends far more per capita on health care than any other country,
yet lags behind other nations that spend substantially less, on key
health quality and patient-centered health measures. Since there is
consistent agreement within both political parties, and among key
stakeholders, that there is already enough money being spent on health
care in this country, I would like to emphasize that if we reallocated
our existing dollars to clinical services for which there is clear
evidence for improving health and away from those that don't, we could
significantly enhance quality and substantially reduce the amount we
spend. Thus, instead of the primary focus on how much we spend--I
suggest we shift our attention to how well we spend our military health
care dollars.
from a volume-driven to value-based system
Moving from a volume-driven to value-based military health delivery
system requires a change in both how we pay for care (supply side
initiatives) and how we engage consumers to seek care (demand side
initiatives). Previous discussions and earlier testimonies focused on
the critical importance and progress regarding reforming care delivery
and payment policies. Many sections of the 2016 National Defense
Authorization Act (NDAA) address payment issues; Sec. 726 explicitly
calls for a pilot program to test value-based reimbursement in TRICARE.
These are important and worthy conversations. Yet, less attention
has been directed to how we can alter consumer behavior as a policy
lever to bring about a more efficient delivery system. While you have
heard about the potential of pay-for-performance programs, patient-
centered medical homes, bundled payment models, and other initiatives
to influence providers, today I propose that value-driven consumer
incentives--through benefit design reforms that promote smart decisions
and enhanced personal responsibility--must be aligned with payment
reform initiatives for us to achieve our clinical and financial goals
for military health care. I commend the Subcommittee for exploring this
matter today.
dangers of a blunt approach to beneficiary cost-sharing--the importance
of `clinical nuance'
Over the past few decades, public and private payers--including the
TRICARE program--have implemented multiple managerial tools to
constrain health care cost growth with varying levels of success. The
most common approach to directly impact consumer behavior is consumer
cost shifting: requiring beneficiaries to pay more in the form of
higher premiums and increased cost-sharing for clinician visits,
diagnostic tests and prescription drugs. Of note, the Defense
Department budget proposal for 2017 calls for increasing the member
out-of-pocket contributions for TRICARE members, most dramatically for
military retirees under 65.
With some notable exceptions, most U.S. health plans--including
TRICARE--implement cost-sharing in a `one-size-fits-all' way, in that
beneficiaries are charged the same amount for every doctor visit,
diagnostic test, and prescription drug [within a specified formulary
tier]. People frequently ask me whether the amount of cost-sharing
faced by TRICARE members is too high, too low, or just right. The
answer, of course, is ``it depends.'' As TRICARE members are asked to
pay more for every clinician visit and for every prescription--despite
clear differences in health produced--a growing body of evidence
demonstrates that increases in patient cost-sharing lead to decreases
in the use of both non-essential and essential care. Unfortunately,
research suggests that increasing `skin in the game' has not produced a
savvier health care consumer.
A noteworthy example of the undesirable impact of `one-size-fits-
all' increases in cost-sharing is a New England Journal of Medicine
study that examined the effects of increases in copayments for all
doctor visits for Medicare Advantage beneficiaries [Trivedi A. N Engl J
Med. 2010;362(4):320-8]. As expected, individuals who were charged more
to see their physician(s) went less often; however, these patients were
hospitalized more frequently and their total medical costs increased.
While this blunt approach may reduce TRICARE expenditures in the short-
term, lower use rates of essential care may lead to inferior health
outcomes and higher overall costs in certain clinical circumstances.
This effect simply demonstrates that the age-old aphorism `penny wise
and pound foolish' applies to health care.
Conversely, decreases in cost-sharing applied to all services
regardless of clinical benefit--which may have been the case in certain
TRICARE plans--can lead to overuse or misuse of services that are
potentially harmful or provide little clinical value. For the record, I
support high cost-sharing levels for those services--but only those
services--that do not make TRICARE members healthier. That said, I
don't think it makes sense to raise cost-sharing on the services I beg
my patients to do, such as fill their prescriptions to manage their
chronic conditions (e.g. diabetes, depression, HIV) and laboratory
tests that allow the monitoring of a specific disease (e.g.,
cholesterol, blood sugar).
Since there is evidence of both underuse of high-value services and
overuse of low-value services in the TRICARE program, `smarter' cost-
sharing is a potential solution--one that encourages TRICARE members to
use more of those services that make them healthier, and discourages
the use of services that do not. Therefore, to more efficiently
reallocate TRICARE medical spending and optimize health, the basic
tenets of clinical nuance must be considered. These tenets recognize
that: 1) clinical services differ in the benefit provided; and 2) the
clinical benefit derived from a specific service depends on the patient
using it, who provides it, and where it is provided.
Does it make sense to you, Mr. Chairman, that my TRICARE patients
pay the same copayment to see a cardiologist after a heart attack as to
see a dermatologist for mild acne--Or that the prescription drug
copayment is the same amount for a lifesaving medication to treat
diabetes, depression, or cancer, as it is for a drug that treats
toenail fungus--On the less expensive generic drug tier available to
most TRICARE members (current copayments are $10 at retail pharmacies
and $0 through a mail order pharmacy), certain are drugs so valuable
that I often reach into my own pocket to help patients fill these
prescriptions; while for the same price there are also drugs of such
dubious safety and efficacy, I honestly would not give them to my dog.
The current `one-size-fits-all' cost-sharing model lacks clinical
nuance, and frankly, to me, makes no sense. As we deliberate Defense
Health Care benefit redesign, there is bipartisan recognition that the
current structure of the TRICARE benefit is outdated, confusing, and in
need of reform. Taking steps to improve the current array of confusing
deductibles, copayments and coinsurance is long overdue. I could not
agree more that our military personnel deserve better. Only after we
acknowledge the limitations and inefficiencies of the TRICARE cost-
sharing structure, can we identify ways to improve it. It is my
impression that TRICARE members avail themselves of too little high-
value care and too much low-value care. Precision medicine needs
precision benefit design. We need benefit designs that support
consumers in obtaining evidence-based services such as diabetic retinal
exams and discourage individuals through higher cost-sharing from using
dangerous or low-value services such as those identified by
professional medical societies in the Choosing Wisely initiative. By
incorporating greater clinical nuance into benefit design, payers,
purchasers, beneficiaries, and taxpayers can attain more health for
every dollar spent.
value-based insurance design [v-bid]: implementing clinical nuance
Realizing the lack of clinical nuance in available public and
commercial health plans, more than a decade ago the private sector
began to implement clinically nuanced plans based on a concept our team
developed known as Value-Based Insurance Design, or V-BID. The basic V-
BID premise calls for reducing financial barriers to evidence-based
services and high-performing providers and imposing disincentives to
discourage use of low-value care. A V-BID approach to benefit design
recognizes that different health services have different levels of
value. It's common sense--when barriers to high-value treatments are
reduced and access to low-value treatments is discouraged, these plans
result in better health with the potential to substantially lower
spending levels.
Let me be clear, Mr. Chairman, I am not asserting that implementing
V-BID into TRICARE is a single solution to TRICARE's problems. If we
are serious about improving our members' experiences and health
outcomes, while also bending the health care cost curve, we must change
the incentives for consumers as well as those for providers. Blunt
changes to TRICARE benefit design--such as those recently announced--
must not produce avoidable reductions in quality of care. Instead, I
would recommend clinically driven--instead of a price driven--
strategies.
I'm pleased to tell you that the intuitiveness of the V-BID concept
is driving momentum at a rapid pace in both the private and public
sectors, and we are truly at a `tipping point' in its adoption.
Hundreds of private self-insured employers, public organizations, non-
profits, and insurance plans have designed and tested V-BID programs.
The fundamental idea of `buy more of the good stuff and less of the
bad' has made V-BID one of the very few health care reform ideas with
broad multi-stakeholder and bipartisan political support.
V-BID implementation has occurred in many of the states represented
by members of this subcommittee. Mr. Chairman, V-BID principles have
been implemented in your State of South Carolina Medicaid program to
ensure that vulnerable beneficiaries have better access to potentially
life-saving drugs used to treat chronic diseases. Senator Gillibrand,
the Empire state has highlighted V-BID in Governor Cuomo's state
innovation plan and is a key element of the State Innovation Model
(SIM) program. Senator King, V-BID has a similar high profile role in
the Maine SIM program. Senator Cotton, Arkansas has been a national
leader in aligning consumer engagement initiatives with the episode-
based payment model. Senators Tillis and Blumenthal, V-BID plans are
now offered to state employees in North Carolina and Connecticut. Of
note, the Connecticut Health Enhancement Plan--a V-BID plan for state
employees--has demonstrated high levels of participation in healthy
behaviors (98 percent), and preventive care, and has significantly
reduced emergency room visits in only two years. This plan has become a
national model used by several other states and public employers.
The last and most important example I would like to mention is the
implementation of V-BID in the Medicare program, a crucial component of
our nation's commitment to take care of the elderly and disabled among
us. The `one-size-fits-all' approach to Medicare coverage dates back to
its inception in the 1960s, driven by discrimination concerns. Over the
past several years, bipartisan, bicameral Congressional support has
grown to allow Medicare to implement clinically nuanced benefit
designs. In 2009, Senators Hutchison and Stabenow introduced a
bipartisan bill, ``Seniors' Medication Copayment Reduction Act of
2009'' (S 1040), to allow a demonstration of V-BID within Medicare
Advantage plans. Last May, Senators Thune and Stabenow introduced the
``Value-Based Insurance Design Seniors' Copayment Reduction Act of
2015'' (S 1396). A companion bill included in the ``Strengthening
Medicare Advantage through Innovation and Transparency for Seniors Act
of 2015'' (HR 2570) passed the U.S. House of Representatives in June
with strong bipartisan support.
This strong Congressional backing led the Center for Medicare &
Medicaid Innovation (CMMI) to announce a program to test V-BID in
Medicare Advantage (MA) plans in September 2015. The 5-year
demonstration program will examine the utility of structuring patient
cost-sharing and other health plan design elements to encourage
patients to use high-value clinical services and providers, thereby
improving quality and reducing costs. The model test will begin in
January 2017, in Arizona, Indiana, Iowa, Massachusetts, Oregon,
Pennsylvania, and Tennessee.
infusing `clinical nuance' into tricare
Flexibility in benefit design would allow TRICARE plans to achieve
even greater efficiency and to encourage personal responsibility among
members in the following ways:
I. Differential Cost-Sharing for use of Different Providers or Settings
Since the value of a clinical service may depend on the specific
provider or the site of care delivery, TRICARE plans should have the
flexibility to vary cost-sharing for a particular outpatient service in
accordance with who provides the service and /or where the service is
delivered. This flexibility is increasingly feasible, as quality
metrics and risk-adjustment tools become better able to identify high-
performing health care providers and/or care settings that consistently
deliver superior quality.
II. Differential Cost-Sharing for use of Different Services
To date, most clinically nuanced designs have focused on lowering
patient out-of-pocket costs for high-value services (carrots). These
are the services I beg my patients to do--for which there is no
question of their clinical value--such as immunizations, preventive
screenings, and critical medications and treatments for individuals
with chronic disease such as asthma, diabetes, and mental illness (e.g.
as recommended by National Committee for Quality Assurance, National
Quality Forum, professional society guidelines). Despite unequivocal
evidence of clinical benefit, there is substantial underutilization of
these high-value services by TRICARE members. Multiple peer-reviewed
studies show that when patient barriers are reduced, compliance goes
up, and, depending on the intervention or service, total costs go down.
Yet, from the TRICARE program's perspective, the cost of incentive-only
`carrot-based' V-BID programs depends on whether the added spending on
high-value services is offset by a decrease in adverse events, such as
hospitalizations and visits to the emergency department. While these
high-value services are cost-effective and improve quality, many are
not cost saving--particularly in the short term. However, research
suggests that non-medical economic effects--such as the improvement in
productivity associated with better health--can substantially impact
the financial results of V-BID programs.
While significant cost savings are unlikely with incentive-only
`carrot' programs in the short term, a V-BID program that combines
reductions in cost-sharing for high-value services and increases in
cost-sharing for low-value services can both improve quality and
achieve net cost savings. Removing harmful and/or unnecessary care from
the system is essential to reduce costs, and creates an opportunity to
improve quality and patient safety. Evidence suggests significant
opportunities exist to save money without sacrificing high-quality
care. For example, in 2014, the lowest available estimates of waste in
the U.S. health care system exceeded 20 percent of total health care
expenditures. Though less common, some V-BID programs are designed to
discourage use of low-value services and poorly performing providers.
Low-value services result in either harm or no net benefit, such as
services labeled with a D rating by the U.S. Preventive Services Task
Force.
It is important to note that many services that are identified as high
quality in certain clinical settings are considered low-value when used
in other patient populations, clinical diagnoses or delivery settings.
For example, cardiac catheterization, imaging for back pain, and
colonoscopy can each be classified as a high- or low-value service
depending on the clinical characteristics of the person, when in the
course of the disease the service is provided, and where it is
delivered.
Fortunately, there is growing movement to both identify and discourage
the use of low-value services. The ABIM [American Board of Internal
Medicine] Foundation, in association with Consumers Union, has launched
Choosing Wisely, an initiative where medical specialty societies
identify commonly used tests or procedures whose necessity should be
questioned and discussed. Thus far, over 40 medical specialty societies
have identified at least five low-value services within their
respective fields. Substantial and immediate cost savings are available
from waste identification and elimination. Thus, V-BID programs that
include both `carrots' and `sticks' may be particularly desirable in
the setting of budget shortfalls.
III. Differential Cost-Sharing for Certain Services for Specific
Enrollees
Since a critical aspect of clinical nuance is that the value of a
medical service depends on the person receiving it, we recommend that
TRICARE plans encourage differential cost-sharing for specific groups
of enrollees. The flexibility to target enrollee cost-sharing based on
clinical information (e.g., diagnosis, clinical risk factors, etc.) is
a crucial element to the safe and efficient allocation of expenditures.
Under such a scenario, a plan may choose to exempt certain enrollees
from cost-sharing for a specific service on the basis of a specific
clinical indicator, while imposing cost-sharing on other enrollees for
which the same service is not clinically indicated. Under such an
approach, plans can recognize that many services are of particularly
high-value for beneficiaries with conditions such as diabetes,
hypertension, asthma, and mental illness, while of low-value to others.
(For example, annual retinal eye examinations are recommended in
evidence-based guidelines for enrollees with diabetes, but not
recommended for those without the diagnosis.) Without easy access to
high-value secondary preventive services, previously diagnosed
individuals may be at greater risk for poor health outcomes and
avoidable, expensive, acute-care utilization. Conversely, keeping cost-
sharing low for all enrollees for these services, regardless of
clinical indicators, can result in overuse or misuse of services
leading to wasteful spending and potential for harm.
Permitting `clinically nuanced' variation in cost-sharing would
give TRICARE plans a necessary tool needed to better encourage members
to receive high-value services. This addition would eliminate many of
the challenges and limitations of the `one-size-fits-all' model.
alignment of consumer engagement with alternative payment models
The TRICARE program is currently examining many exciting, some
unproven, value-based reimbursement initiatives such as bundled
payments, pay-for-performance, and patient-centered medical homes, some
of which are explicitly addressed in the 2016 National Defense
Authorization Act. As these initiatives provide incentives for
clinicians to deliver specific services to particular patient
populations, it is of equal importance that consumer incentives are
aligned. As a practicing physician, it is incomprehensible to realize
that my patients' insurance coverage may not offer easy access for
those exact services for which I am benchmarked. Does it make sense to
offer a financial bonus to get my patient's diabetes blood sugar under
control, when her benefit design makes it prohibitively expensive to
fill her insulin prescription or provide the copayment for her eye
examination? The alignment of clinically nuanced, provider-facing, and
consumer engagement initiatives is a necessary and critical step to
improve quality of care, enhance the member experience, and contain
cost growth for the TRICARE program.
conclusion
As this committee considers changes to the TRICARE benefit design,
it is an honor for me to present one novel approach to better engage
TRICARE members. As a practicing clinician, I believe that the goal of
the military health system is to keep its members healthy, not to save
money. That said, I strongly concur that health care cost containment
is absolutely critical for the sustainability of the TRICARE program
and our nation's fiscal health. While there is urgency to bend the
health care cost curve, cost containment efforts should not produce
avoidable reductions in quality of care. As cost-sharing becomes a
necessity for fiscal sustainability, I encourage you to take a common-
sense approach of setting member co-payments on whether a clinical
service makes a TRICARE member healthier--instead of the current
strategy of basing member contributions on the price of the service. In
other words, make it harder to buy the services they should not be
using in the first place. If such principles encourage the utilization
of high-value providers and services and discourage only low-value
services, TRICARE plans can improve health, enhance consumer
responsibility, and reduce costs.
Thank you.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
STATEMENT OF DAVID J. McINTYRE, JR., PRESIDENT AND CEO OF
TRIWEST HEALTHCARE ALLIANCE
Mr. McIntyre. Good afternoon, Chairman McCain, Chairman
Graham, Ranking Member Gillibrand, and members of the Personnel
Subcommittee of the Senate Armed Services Committee.
It is a privilege to appear before you today at this
initial hearing on defense health care reform, and I hope that
my participation in today's hearing will be of assistance to
you and the Defense Department as you seek to ensure that the
military health system is strengthened and is able to continue
to provide optimal support to those who wear the cloth of this
Nation, their families, and those who earned a retirement
benefit due to their career of service.
I believe any framework for reform needs to begin with an
assessment of what is working and not working, what the
environmental conditions are likely to look like in the future,
including the `go to war' capabilities and needs, and what
approach will likely ensure success in the future.
For my nearly 20 years of privileged service at the side of
DOD and now VA [Veterans Affairs], I believe there are four
fundamental questions worthy of exploration.
First, does DOD have the optimal footprint and most
effective, efficient management structure and tools and system
to deliver on the needs? Is the investment in the direct care
system being optimized? There is a great deal of expense
inherent in the physical footprint, the equipment that has to
be purchased and kept current and the personnel required to
effectively staff the footprint. There is great efficiency and
effectiveness to be gained when sizing a system, when making
`make versus buy' decisions and collaborating appropriately,
and perhaps even when leasing versus traditional ownership of
plant and equipment is broached.
I also believe that telehealth and data and analytics tools
and the corollary personnel investments need to be maximized,
especially in this day and age.
As for management structure, there has been much written,
proposed, and discussed on this topic over the years. It would
seem that there is an opportunity in this space as well to
achieve savings and enhance effectiveness, just as has been
done with the evolution in the way in which the military
medical community now supports the warfighter in theater. While
not easy, streamlining the number of players and consolidating
functions will also make the organization more agile and
fiscally efficient.
Second, does the benefit available to the population make
sense and is it priced properly?
The individual that testified just before me spoke
eloquently of one component part that ought to be considered.
As we all know, the TRICARE benefit has evolved greatly in the
last 20 years. Having said that, one challenge that remains
constant is what to do with the pricing structure which was
previously addressed. I believe that part of that needs to
include indexing. One of the challenges often with programs
that are developed is that we fail to index them. I think a
simple, actuarially based and automatic triggered index would
be worthy of consideration.
Third, is access to care easy, and what is the optimal
approach to providing the direct care system with the needed
elasticity to ensure that access to quality providers is
available to meet the needs that the direct system cannot meet
itself?
My understanding is that an electronic authorization system
that allows workflow to efficiently and effectively move
between the direct system and the TRICARE contractors and
providers still does not exist. I would say that needs to be
remedied, and it needs to be grounded in processes that are
effective and efficient, to include supporting how to make sure
that appointments work effectively and accurately.
Lastly, I would say that the networks built by those that
support the DOD as contractors need to be constructed to match
the need that exists for care in the community. One size does
not fit all. In order to optimize the DOD budget, those
networks should be priced at market rate.
Fourth, are we optimally promoting health and effectively
and efficiently supporting those whose unmanaged health issues
are both bad for the individual and presenting avoidable
expense to the taxpayer?
Optimally promoting health starts with effectively
supporting the patient, which my colleagues have addressed
previously. If done right, it also results in cost avoidance,
so the two go hand in hand. Segmenting the population and
focusing in on those who benefit most from assistance in the
management of their conditions is just smart and annually
reviewing the analysis of the population's health is critical
to doing this right.
Developing and deploying an integrated approach to disease
management for that specific profile of conditions is also
critical, something that we tried in TRICARE when I was doing
it and we failed to focus in on the right spaces where
opportunity exists. You want the treatment to be coordinated
and well managed, regardless of where the care is delivered,
whether it is in the direct system or in the community.
There should then be the development of a customized
treatment plan for the individual patient and the modification
of the design of the TRICARE program to provide a series of
incentives and disincentives for compliance with that treatment
plan.
Lastly, provider payment models that appropriately reward
providers for quality outcomes and reduce an overall spend need
to be adopted as they are the key partner in delivering care. I
would suggest doing pilots to continue to test this, but then
deploying it effectively and quickly is important.
Senator Gillibrand, I would like to draw your attention to
one prototype that I was privileged to be a part of with one of
the next panel's participants. That is at the side of the first
lady then of the Marine Corps, Annette Conway, who was a
special educator. We had the privilege, then-Captain Faison and
myself, now the Navy Surgeon General, to prototype how to put a
special needs program together to serve the families at Camp
Pendleton. I believe, sir, that that worked extremely
effectively. There are some clues there from a while ago, and
there are probably clues from current pilots that could be
rolled out and made available as you map the final policy.
In closing, I want to thank you for the invitation to
appear before you today. It was an honor and a privilege for my
colleagues and I at TriWest Healthcare Alliance and our
nonprofit owners to be of service to the beneficiaries of the
military health system at the side of the ladies and gentlemen
who wear the cloth of the Nation. That is work we will not
return to because we have the awesome privilege now of leaning
forward at the side of the VA in the current furnace, and that
is where we will stay focused until our job is done.
I hope that my testimony today has been helpful to you as
you contemplate the way ahead as it relates to continuing to
refine the military health system and the important TRICARE
benefit. I look forward to answering any questions you might
have. Thank you.
[The prepared statement of Mr. McIntyre follows:]
Prepared Statement by Mr. David J. McIntyre, Jr.
introduction
Good afternoon Chairman Graham, Ranking Member Gillibrand, and
members of this distinguished Committee.
Thank you for the invitation to appear before you today at this
initial hearing on Defense Health Care Reform. I applaud you and your
colleagues for taking on this subject and I am pleased to share with
you my views on this topic, as you and the Defense Department seek to
ensure that the Defense Health System remains strong and is able to
provide optimal support to those who wear the cloth of the nation,
their families and those who earned a retirement health benefit due to
their career of service in the uniformed services.
For almost 20 years I have had the distinct privilege of co-
founding and leading a company, TriWest Healthcare Alliance, whose sole
mission is standing alongside the federal government--initially with
the Department of Defense and now with the Department of Veterans
Affairs (VA)--in serving the health care needs of those who serve this
country in uniform and their families. Prior to this privileged work, I
had the honor of serving almost nine years in the offices of the U.S.
Senate, where I was responsible for health-policy issues for the
Chairman of this Committee, Senator John McCain, and Senator Slade
Gorton (R-WA). That time included much engagement in this space,
including at the time of the birthing of the TRICARE program
legislatively.
It is with this comprehensive policy and business background that I
am in front of you today. I did not go out looking to testify before
you but I feel it is my personal responsibility, based on my experience
in working with the federal government in this critical space and in
understanding the needs of our deserving Service members and their
families, that I share with you my view of how to bring best commercial
practices to bear in the military health space while also maintaining
the readiness of our military and ultimately ensuring the long-term
fiscal health of the Department of Defense (DOD).
In 1996, a group of non-profit health plans and university health
systems came together and founded TriWest Healthcare Alliance. Our
initial mission was to serve the DOD in bringing up the first TRICARE
contract in what were then Regions 7 and 8, which we assisted the DOD
in folding into the TRICARE Central Region at a savings to the
government. We then went on to serve the 21-state TRICARE West Region.
While today TRICARE is recognized as a solid benefit for our nation's
Service members and their eligible family members, it took many years
of hard work, focus, and most importantly partnership between the
contractor community and DOD's health care system to mature it to the
point of stability and fashion it into the successful program that it
is today. I am proud of the role TriWest played, along with our
colleagues in the contractor community, in the implementation,
maturation, and improvement of that program during our years of service
in support of the Defense Department. After being toughened up a bit, I
am even more proud today to have the privilege of bringing that same
focus and singular-purpose intensity to the side of VA as they seek to
enhance access to care in the community and re-set themselves for this
generation's Veterans and those that will follow.
In addition, TriWest has the privilege of serving the U.S. Marine
Corps as the worldwide operator of the DSTRESS stress and suicide-
prevention contact center and providing back-up to their Sexual Assault
Prevention and Response (SAPR) line. While certainly not perfect, I am
proud to say that we have not lost a Marine in our nearly seven years
of work in this critical space. We also serve the U.S. Air Force by
providing appointing service in three Military Treatment Facilities in
the Continental U.S.
At TriWest, we found that the successful delivery of all of these
services demands a collaborative approach between all the stakeholders.
I believe that history will continue to reflect positively on the road
that we collectively traveled during our time at the side of DOD, as we
achieved much collective success to the benefit of those that we were
jointly privileged to serve. Though it took a bit of time to mature, as
all large and complicated programs do, TRICARE demonstrated one of its
core intended purposes in being stood up . . . giving the direct care
portion of the DOD Health System the ability to necessarily project
forward into a theater/theaters of war and continue to provide for the
needs of those staying behind given the elasticity provided through
consolidated civilian provider networks. I am also very proud of the
unique success we had in mapping and developing networks to Guard units
across the vast expanse of our 21 states of operation, so that they and
their families might have access to the basics when they were not
available in their geographic locale through DOD's physical footprint.
Much of the work we did so successfully at the side of DOD has
carried over to that which we are now privileged to do in support of VA
as it seeks to re-tool to more successfully meet the needs of Veterans,
including those of our generation's War on Terror. While that work,
much like that which we were privileged to perform in support of DOD,
demands our all at this moment, it was nice to have a reason to step
back and reflect a bit . . . and be prepared to share with you a few of
my thoughts regarding the next generation of refinement/reform of the
Military Health System (MHS).
Mr. Chairman and members of this distinguished Committee, I believe
that any framework for reform needs to begin with an assessment of what
is working and not working, what the environmental conditions are
likely to look like in the future--including the ``Go to War''
capabilities, and what approach will likely ensure success in the
future.
It goes without saying that the DOD Health System, like VA, is not
the private sector . . . and, parts of their mission and the
expectation we all have as citizens in how we will care for and support
those who put themselves in harm's way--sometimes at a very high
personal cost to their health--necessarily means that it will not and
should not mirror the private sector. However, there are definitely
places where the private sector can ensure elasticity of access for the
direct care system and bring core competencies to the equation that
also afford the direct care system the ability to achieve its quality
objectives and keep costs under control.
As I stepped back and thought about the reform question, based on
now having the benefit of 20 amazing years of serving those who serve
at the side of DOD and now VA, I would be asking four questions.
First, knowing what we know today and looking into the future, do
we have the optimal footprint and most effective/efficient management
structure and tools/support system? Are we effectively and efficiently
optimizing the investment in the direct care system?
Second, does the benefit available to the population make sense,
and is it priced properly?
Third, is access to care easy and do we have the optimal approach
to provide the direct care system with needed elasticity in access to
providers when they are unable to meet the health care need directly?
Fourth, are we optimally promoting health and effectively and
efficiently supporting those whose unmanaged health issues are both bad
for the individual and more costly to the DOD?
optimal footprint, management structure and tools
First, knowing what we know today and looking into the future, do
we have the optimal footprint and most effective/efficient management
structure and tools/support system? Are we effectively and efficiently
optimizing the investment in the direct care system?
There is a great deal of expense inherent in the physical
footprint, the equipment that has to be purchased and kept current, and
the personnel required to staff the footprint. Over the years, the DOD
has had a solid focus on downsizing from hospitals to clinics where it
made sense and testing various models for how to make more efficient
use of operating resources. As you know, there has even been the
exploration of joint use DOD/VA facilities over the years, with the
most recent project in Chicago. There is great efficiency and
effectiveness to be gained when sizing, make versus buy and
collaboration are approached properly, and I believe it is time to look
at making this approach the rule instead of the exception. I also think
that evaluating leasing options versus traditional ownership is
worthwhile.
I would suggest that part of optimal footprint design is the
leveraging of telehealth. While DOD has made much use of this
technology over the years--and certainly has been very effective in
harnessing it of late to support the needs of the warfighter--I believe
there would be much gained from exploring its application, and the
associated tools that are starting to emerge in the marketplace, in
optimizing the reach of both military and civilian providers in
supporting those who use today's manpower-intense nurse advise lines,
those who suffer from chronic illnesses and those for whom behavioral
health counseling would be more accessible through leveraging this mode
of access.
I would also observe that all of us in health care are increasingly
learning the importance of data, and data analytics capability to feed
optimal decision-making . . . whether it is used to determine what is
made versus bought, identify the most effective targets for disease and
condition management investment, or how to optimally tailor provider
networks to effectively meet patient need. Solid data and the skilled
people who have the ability to understand and use it must be at the
core of any health reform effort. This is an area where investments are
essential, and if done properly will yield much dividend down the line.
Thus, I would encourage a deliberate focus on what is needed to achieve
success . . . in terms of the systems, the data analytics tools, and
the investment in personnel needed to give the MHS [Military Health
System] the critical tools needed in this area.
As for management structure, there has been much written, proposed
and discussed over the years. It would seem that there is opportunity
in this space as well to achieve savings and enhance effectiveness,
just has been done with the evolution in the way in which the military
medical community is collaborating and integrating to support the
warfighter. While not easy, streamlining the number of players and
consolidating functions will also make the organization more agile in
the work that it does.
tricare benefit
Second, does the benefit available to the population make sense and
is it priced properly?
As we all know, the TRICARE benefit has evolved into a solid
element of the compensation package for military personnel, their
families and military retirees. The early days of the program were not
easy as tweaks needed to be made. We all stayed at it and at the time
we left our work at the side of DOD, it had evolved into one of the
highest rated health plans in existence.
Having said that, one of the challenges that seem to perpetually
exist is what to do with the pricing structure for the various elements
of the TRICARE plan. As you and the Department work through this year's
version of those decisions, I would encourage serious consideration be
given to how to effectively establish an indexing approach that is
simple, actuarially-based and has automatic triggers so that the need
for Congress to engage in rate-setting decisions on an annual basis
becomes a thing of the past.
access to care
Third, is access to care easy and do we have the optimal approach
to provide the direct care system with needed elasticity in access to
providers when they are unable to meet the health care need directly?
One of the areas we spent a great deal of time and energy on during
our work supporting the Defense Department and its TRICARE
beneficiaries in the West Region was easing the complications of access
to care when the supply existed within the Military Treatment
Facilities. It required an elaborate and evolved set of tools and
processes customized to each location to support the referrals into the
facilities. When we came into the second generation of the TRICARE
contracts there was to have been an electronic system which we were to
connect to in order to make the process seamless. It was never built.
Rather than wringing our hands, we stepped back and re-configured our
approach in order to make the processes work in the absence of the
electronic systems availability. My understanding is that such a system
that allows for the connection between the direct care system and the
TRICARE contractor seeking to ensure the maximal use of the direct care
system, to the benefit of the patients and the taxpayer, still does not
exist. It was a worthy notion then, and I believe that remains the
case.
In working this piece, it is critical, though, that the focus not
just be on electronics. It needs to start with a review of the
processes for how appointments are made and managed and how
authorizations move between the direct care system and the TRICARE
contractors. This review should be done in order to both allow for the
refinements in those processes and ultimately to ensure that the
systems work for the processes they were designed to serve.
Lastly, a core element of access to care is ensuring that the
networks built by the TRICARE contractors are constructed to match the
need that exists for care in the community. They should provide optimal
elasticity for the direct care system, which means that it is incumbent
on the direct care system to be engaged in recurring Demand Capacity
modeling with the TRICARE contractors. In order to optimize the budget,
the networks should be priced at market rate.
optimally promoting and paying for health
Fourth, are we optimally promoting health and are we effectively
and efficiently supporting those whose unmanaged health issues are both
bad for the individual and more costly to the DOD?
With infrastructure optimized, critical tools in place and fully
leveraged, and access to care within the direct care system being fully
leveraged with necessary and appropriate elasticity available through
the provider network in the community, we are to the final piece I
would like to touch on. That is optimally promoting health . . . which
starts with supporting the patient, and, if done right, results in cost
avoidance.
It is about improving value for the patient and improving value for
the taxpayer. If done right, these are not mutually exclusive concepts.
Indeed, those who are doing it well in the private sector are
demonstrating that both are possible. My colleagues on this panel, in
fact, are very steeped in this topic.
When I look at it from my vantage point, I think there are several
core elements to success.
First, it is segmenting the population and focusing in on those who
benefit most from assistance in the management of their conditions. To
facilitate this, I would suggest that requiring an annual analysis of
the population's health by both the MHS and the TRICARE contractor
would be of value.
Second, it is the development and deployment of an integrated
approach to disease management for that specific profile of conditions
. . . so that the treatment will be coordinated and well managed
regardless of whether a specific component of care is delivered by a
provider in the direct care system or a provider in the network.
Third, it is the development of a customized treatment plan for the
individual patient and the modification of the TRICARE program to
provide a series of incentives and disincentives for compliance with
the treatment plan. The most effective programs in the country are
using a mix of carrots and sticks to encourage adherence.
Fourth, is the adoption of provider payment models that
appropriately reward providers for quality outcomes and reductions in
overall spend as the key partner that they are in serving the patient.
I would suggest doing pilots in this area to test what would work
optimally in a unique system like the MHS, but I am confident that you
will find significant benefit from a better alignment with the new pay
tools that are emerging in the private sector and also being tested in
Medicare.
conclusion
In closing, I want to thank you for the invitation to appear before
you today. It was an honor and privilege for my colleagues and I at
TriWest Healthcare Alliance to be of service to the beneficiaries of
the Military Health System as it is to now be of service to our
nation's Veterans at the side of VA. I hope that my testimony today has
been helpful to you as you contemplate the way ahead as it relates to
continuing to refine the Military Health System and the TRICARE
benefit, and I look forward to answering any questions you might have.
STATEMENT OF DR. JOHN E. WHITLEY, SENIOR FELLOW AT THE
INSTITUTE FOR DEFENSE ANALYSES
Dr. Whitley. Mr. Chairman, members of the committee, it is
a privilege to participate in this panel. The views I express
are my own and should not be interpreted as reflecting any
position of the Institute for Defense Analyses.
The military medical community is a dedicated force trying
to provide beneficiaries a high-quality benefit and maintain
their readiness to provide lifesaving care on the battlefield.
This community works within a military health system that often
fails to encourage these outcomes and, at times, actually
hinders their ability to succeed. I commend the Congress for
addressing these challenges.
I make three primary points in my written testimony, which
I will summarize briefly here.
First, TRICARE reform is not simply raising beneficiary
cost-shares. TRICARE reform is a chance to fix a program that
has become out of step with current trends in health care. It
is not simply raising costs on retirees to save DOD money. It
should be able replacing a system of 5-year, winner-take-all,
largely pass-through, largely fee-for-service contracts with a
modernized system that improves the quality of the benefit for
our families and retirees while saving the taxpayer money.
Second, TRICARE reform is an opportunity to bring an
increased focus on readiness to the military health system, in
particular on how to retain the capability built during the
wars. As the Compensation Commission reported, quote, research
reveals a long history of the military medical community
needing to refocus its capabilities at the start of wars after
concentrating during peacetime on beneficiary health care.
Well before the wars in Iraq and Afghanistan began, GAO
[Government Accountability Office] was reporting that, ``Since
most military treatment facilities provide health care to
Active Duty personnel and their beneficiaries and do not
receive trauma patients, military medical personnel cannot
maintain their combat trauma skills during peacetime by working
in these facilities.''
Although there were a lot of improvements made during the
war, military physicians are still reporting, ``Today the
service that the physician was referring to has less than a
dozen pre-hospital physician specialists and about the same
number of trauma surgeons on Active Duty.'' By comparison, that
service has roughly the same number of radiation oncologists
and nearly three times the number of pediatric psychiatrists
and orthodontists in the force. This is largely because the
medical specialty allocations are based on traditional
peacetime beneficiary care needs. Refocusing on wartime needs
could populate key institutional and operational billets with a
critical mass of trained pre-hospital and trauma specialists
and drive further advances in battlefield care during
peacetime. End quote.
This focus on the beneficiary care mission brings me to my
third point. TRICARE reform is also an opportunity to reform
the entire military health system. The MHS is a complex,
interweaving set of missions, delivery systems, benefits, and
funding streams. It involves duplicative management layers and
fails to incentivize unity of effort on the key system-wide
outcomes of readiness, high-quality benefit delivery, and cost
control.
A prime example of these MHS problems is the military
hospital network. The MHS direct care system includes over 50
inpatient hospitals and over 300 outpatient clinics. The
purpose of having a DOD-run hospital system is to provide the
clinical skill maintenance platform for the operationally
required military medical force. The day-to-day workload and
operations of these hospitals are almost exclusively focused on
beneficiary health care. As an example, I show in my written
statement how different the inpatient workload in the direct
care hospitals is from the deployed inpatient workload.
This puts military hospital commanders in an almost
impossible situation, and it creates a climate of confusion
within the MHS that affects everything from staffing decisions
to major investment decision-making.
These military hospitals are expensive and a key driver of
excess cost--of health care costs within the DOD.
Many of these incentive challenges and the mission
confusion in the MHS are driven by a lack of transparency in
funding. The line service leadership, the Office of the
Secretary of Defense, and Congress cannot identify how much is
spent on beneficiary care and how much is spent on readiness,
reducing the effectiveness of resource allocation decision-
making and reducing accountability.
I offer suggestions on potential reform options for each of
these challenges in my written testimony, and I would very
happy to elaborate on them in the question and answer period.
I would just like to close by, again, commending you for
taking on these important and complex issues and for including
me in this conversation.
[The prepared statement of Dr. Whitley follows:]
Prepared Statement by Dr. John Whitley
Mr. Chairman and Members of the Committee: It is a privilege to
participate in this panel. The views I express are my own, and should
not be interpreted as reflecting any position of the Institute for
Defense Analyses. The military medical community is a dedicated force
trying to provide beneficiaries a quality benefit and maintain their
readiness to provide lifesaving care on the battlefield. This community
works within a Military Health System (MHS) that often fails to
encourage these outcomes and, at times, actually hinders their ability
to succeed. I commend Congress for addressing these challenges and
would like to make three primary points in my testimony:
1. TRICARE reform is an opportunity to improve choice and access
for beneficiaries while controlling costs in DOD--it is not simply
increasing cost-shares or tweaking contracts.
For much of the last 10 years, TRICARE reform has been
defined as increasing cost-shares for beneficiaries to reduce
utilization and raise revenue--saving DOD money.
TRICARE is a flawed program that is out of step with
healthcare trends.
- It is focused on purchasing procedures, with few tools to
promote health outcomes, manage utilization, coordinate care, or
control costs.
- Pass through (government bears risk) contracting fails to
incentivize contractors to manage care and improve health outcomes.
- Five-year, winner-take-all contracts are cumbersome,
uncompetitive, and hinder the infusion of new ideas from the private
sector.
- Result is poor beneficiary experience (e.g., poor choice/
networks) at high cost.
- Raising cost shares or tweaking the TRICARE contracts
cannot fix this problem.
TRICARE should be based on purchasing a benefit (not
procedures) for an individual with a risk-bearing contract.
- The healthcare sector knows how to administer a health
benefit to maximize outcomes while controlling cost--DOD should use
this expertise, not shun it.
- Annual (evergreen) contracts should be used to ensure
timely adaption of new innovations as they are introduced in the
rapidly evolving healthcare sector.
- Contracts should shift financial risks and provide
flexibility to incentivize contractors to use state of the art business
practices in delivering the benefit.
Cost shares are only a part of this discussion; they
are a tool, but only one of many.
2. TRICARE reform can be used to improve medical readiness,
breaking the historic cycle of letting medical readiness atrophy when
DOD returns to a peacetime focus following war.
A tremendous deployed medical capability was built
during the wars, but the MHS does not have the needed case mix and
volume of workload in military hospitals to sustain it.
Congress can leverage TRICARE reform to help prevent
the loss of this capability.
3. TRICARE reform is an opportunity to reform the MHS--improving
efficiency and incentives.
MHS is a complex interweaving set of missions,
delivery systems, benefits, and funding.
It involves duplicative management layers and fails to
incentivize unity of effort on the key system-wide outcomes of
readiness, high-quality benefit delivery, and cost control.
TRICARE reform, with a readiness focus, could begin
the process of transitioning the MHS into a more streamlined system
incentivized to focus on outcomes.
tricare reform is not simply increasing beneficiary cost-shares
For much of the last 10 years, TRICARE reform has largely been
defined by the Department of Defense (DOD) as increasing cost-shares
for beneficiaries; this would reduce utilization of healthcare services
and raise revenue, reducing the cost to DOD of providing the healthcare
benefit. As the Military Compensation and Retirement Modernization
Commission (MCRMC) report pointed out, this narrative is, at best,
incomplete. The TRICARE program is structurally flawed, and the result
is poor performance at high cost. Its poor performance can be observed
for many attributes other than cost-shares (e.g., choice and access).
These limitations in the TRICARE benefit are largely driven by
structural flaws in the design of the program. TRICARE reform is not
simply raising beneficiary cost-shares; it is an opportunity to address
these structural flaws to improve choice and access while controlling
costs.
This framing of the debate is important. When TRICARE reform is
defined as raising cost-shares, it creates a clear winner (DOD) and
loser (beneficiaries who are paying more for the same quality of
benefit). When TRICARE reform is understood to be modernizing a poorly
performing program, it focuses discussion on solutions that leave many
beneficiaries better off while simultaneously saving DOD money. The
debate is no longer about whether to harm beneficiaries to help DOD, it
is about how best to modernize the purchase and administration of
healthcare to benefit everyone. Cost-shares can be an element of
reform, but they are not the only element, and beneficiaries can be
rewarded with better choice and access in return for higher cost-
shares.
Structural Flaws in the Design of the TRICARE Program
In the late 1980s, as the Cold War was ending, DOD's limited method
of purchasing healthcare was the Civilian Health and Medical Program of
the Uniformed Services (CHAMPUS), used primarily for recruiters and
others located far from military hospitals. By the 1990s, as large-
scale post-Cold War rationalization of DOD infrastructure began, it had
become clear that DOD healthcare was going to have to shift to a more
integrated system with greater reliance on private sector care. The
dominant method for purchasing care in the private sector was fee-for-
service (FFS), in which doctors and other healthcare providers are paid
for each service or procedure performed. FFS purchasing was also a
simple approach for a system focused on purchasing wraparound or
overflow care to augment its in-house facilities in select markets and
situations in which it could not deliver all care itself. In this
environment, the limited CHAMPUS system was transformed into the much
larger TRICARE system, which today comprises three geographic regions
that purchase community care through pass-through (i.e., no substantive
risk transfer) five-year FFS contracts, one per region. The initial
contracts (called T1) were built on pass-through FFS purchasing of
care, but did allow some limited use of alternative methods for
purchasing care, risk sharing between the government and the regional
contractor, and contractor provision of ancillary services such as
augmenting staff in military hospitals.
DOD is now on a third round of contracts (T3) and is currently in
the process of contracting for T4. Two particular trends that have
occurred since TRICARE's inception are important to highlight for
understanding the structural flaws in the TRICARE program. The first is
the movement away from FFS purchasing of healthcare in both the private
and public sectors. The primary alternative to FFS when TRICARE was
established was the staff model health maintenance organization (HMO).
The two methods formed opposing poles, with various private sector
insurers and other market participants ranging along the continuum
between these poles. Modern healthcare no longer fits into this
framework. There are very few market participants at these poles and
the continuum between them has been replaced by intense competition in
a wide-ranging space of alternative value-based purchasing (VBP)
methods. The healthcare sector discovered that pass-through FFS
contracting provided poor (and sometimes perverse) incentives for
utilization management, care coordination, and promotion of health
outcomes--in short, it was not a sustainable business model. FFS
purchasing remains an element of an overall strategy for purchasing
healthcare, but its use as the only method in a non-risk-bearing
contract with a contractor has greatly diminished. FFS coupled with no
risk transfer to the contractor is a poor program design. In the public
sector, the traditional FFS Medicare (of which TRICARE is a variant)
has already seen one-third of beneficiaries migrate to Medicare
Advantage (risk-based plans) and the Administration has set targets to
have 30 percent of individual Medicare payments made through
alternative (non-FFS) methods by 2016 and 50 percent by 2018. The
second important trend is that, although TRICARE started out with
contracts that promoted a broader focus than just pass-through FFS
purchasing of healthcare, over three generations of contracts TRICARE
devolved to just that. While the healthcare sector has moved away from
that model, TRICARE has narrowed to little else.
This history helps identify some of the key flaws in the design of
the TRICARE program:
1. TRICARE contracting is based on pass-through (non-risk bearing)
contracting for procedures instead of purchasing a benefit for an
individual with a risk-bearing contract: TRICARE should not be built on
the purchase of individual procedures or visits; it should be built on
the purchase of a benefit for the individual or family. This is
essential for ensuring that care is coordinated, utilization is
managed, and health outcomes are promoted--the key outcomes of
interest. In addition, the purchase of this benefit must transfer risk
to the contractor. The healthcare sector is rapidly evolving, and a
focus of a reformed TRICARE should be on the incentives being provided
to the contractors to adopt and further innovate in their use of these
VBP tools to promote the key outcomes of interest. Insurance carriers
focus on these problems every day and are professional managers of
healthcare. DOD should leverage their expertise and put it to work on
behalf of military beneficiaries.
2. TRICARE cost control strategies are based on costs per
procedures instead of the total cost for the value received: One
unfortunate impact of pass-through FFS contracting is that it focuses
attention on per-procedure costs while distracting attention from, and
providing few tools to manage, utilization and total cost. DOD's system
is anchored in its use of Medicare reimbursement rates for procedures,
and TRICARE often contracts for procedures at 20 percent or more below
commercial rates. This has become an overriding focus in DOD and a
primary measure by which reform alternatives are evaluated (i.e., a key
evaluation criterion is often whether it raises per-procedure rates).
FFS models, however, incentivize increased utilization that may not be
clinically necessary, and in DOD, utilization rates are 30-40 percent
higher than demographically similar comparison groups. Despite paying
less per procedure, DOD pays more in total per beneficiary.
The healthcare sector is focused on total cost and the value
received for the amount paid. To take a common example (taken
specifically from interviews conducted in Alexandria, Louisiana), a
particular market may have several orthopedic surgeons performing total
knee replacements. The best surgeons may charge higher rates for the
surgery (there is higher demand for their services) but may also have
lower costs for the entire episode of care (driven by lower failure
rates, quicker healing rates, shorter physical therapy requirements,
etc.). Private insurers will observe this difference and be willing to
pay the higher surgical rate, incentivizing their patients to use the
more expensive surgeons. This cannot be done in the TRICARE system;
regardless of health outcomes and total cost, the surgeons with the
lowest per-procedure cost will be the only ones allowed. The focus on
procedure rates drives other perverse results as well, e.g., narrow
networks and poor access.
3. TRICARE contracts are long-lived and winner-take-all instead of
competitive evergreen contracts: TRICARE uses winner-take-all (one
successful contractor per region) five-year (often extended) contracts.
The process by which TRICARE's contracts are awarded is complicated,
prolonged, and characterized by protests and delays, increasing
TRICARE's costs. More importantly, the lack of competition and multi-
year duration of contracts limits TRICARE's ability to innovate and
keep pace with healthcare trends and advances. Most other public sector
healthcare programs use competitive, annual (sometimes known as
evergreen) contracts, e.g., Medicare Part C, Medicare Part D, and
Federal Employees Health Benefits Program (FEHBP). Large, multi-year,
winner-take-all contracts can appear simple at first and may be
attractive for this reason, but TRICARE experience demonstrates
otherwise.
These challenges are fundamental to the design of the current
TRICARE program. Minor tweaks of the program such as retaining the
five-year, winner-take-all pass through structure but directing VBP
instead of FFS purchasing will not substantively change the result.
Each of the structural flaws should be addressed as part of TRICARE
reform and the flaws are interconnected--fixing one element without the
others can leave the program performing just as poorly as it currently
does.
Implications of TRICARE Program Flaws
The structural flaws of the TRICARE program design cause poor
performance in many areas. From the perspective of healthcare
experience to the beneficiary, the flaws cause limitations on choice
and access. From the perspective of DOD and the taxpayer, the flaws
cause unnecessary overutilization and high costs.
The most important attribute to beneficiaries in benefit design is
choice. Families and individuals in different stages of life (e.g.,
child-bearing years versus retirement years) and with different
situations (e.g., higher income versus lower income, married versus
single, and healthy versus infirm) have different healthcare wants and
needs. Providing choice among a variety of plan options allows
beneficiaries to select the plan that best suits their needs, trade off
added benefits against the associated premium increases, and take
ownership of their healthcare experience. In a study on employer-
sponsored insurance, it was found that the value placed on choice by
beneficiaries equated to 16 percent of their employer-provided
healthcare subsidies. \1\ Choice is the most important attribute
because it is the one that empowers beneficiaries to correct
deficiencies in other attributes--with choice, the beneficiary can
simply walk away from the plan (or provider) that isn't meeting their
expectations and choose another.
---------------------------------------------------------------------------
\1\ Leemore Dafny, Kate Ho, and Mauricio Varela, ``Let Them Have
Choice: Gains from Shifting Away from Employer-Sponsored Health
Insurance and Toward an Individual Exchange,'' American Economic
Journal: Economic Policy 5, no. 1 (2013): 33, 56.
---------------------------------------------------------------------------
Providing choice among plans also has significant value in program
design and management. It corrects the winner-take-all structural flaw
identified above. Under a centrally directed program design (a uniform
benefit), the central authority (DOD, in accordance with statutory
direction, in the case of TRICARE) designs the healthcare plan and
dictates its terms to beneficiaries. Under a program designed around
beneficiary choice among multiple plans, competition between the plans
is created. To survive in the marketplace, contractors/carriers have to
attract beneficiaries to their plan (and away from competing plans).
This means that the plans have to focus carefully on designing options
that are attractive to beneficiaries and provide the services
beneficiaries want. It also means that they have to be price
competitive, so they have to offer those desired services as cheaply as
possible. Instead of having a central authority dictate to
beneficiaries regardless of their preferences, a program design based
on choice harnesses beneficiary preferences to improve program
performance. The Office of Personnel Management (OPM) stated to the
MCRMC that this competition among plans drove a one percent reduction
in premium growth in the FEHBP compared to similar employer sponsor
premium growth in recent years. TRICARE has experienced average cost
growth several percentage points above civilian healthcare.
For most DOD beneficiaries, there are two health plan options:
TRICARE Prime and the combined TRICARE Extra (network) and Standard
(non-network) plan. To understand choices available to other
beneficiary groups, one simple comparison group is federal civilians.
Table 1 compares the plan choices available to military beneficiaries
in three markets compared to the choices available to the federal
civilian workforce in those markets.
Table 1.--Plan Choices for Military Beneficiaries Compared to Federal Civilians
----------------------------------------------------------------------------------------------------------------
Market Area Military Beneficiaries Federal Civilians
----------------------------------------------------------------------------------------------------------------
Las Vegas, Nevada........................................... 2 19
Pensacola, Florida.......................................... 2 18
Leesville, Louisiana........................................ 2 16
----------------------------------------------------------------------------------------------------------------
Another key attribute is the size of the provider network available
to the beneficiary. A regular concern raised by military beneficiaries
is that TRICARE has limited networks. Table 2 provides a comparison
between the civilian providers available to military beneficiaries in
three geographic markets compared to the networks available to federal
civilians in those markets for two FEHBP plans, the Government
Employees Health Association (GEHA) plan and the Blue Cross and Blue
Shield (BCBS) plans. Two of these markets (Fayetteville and San Diego)
have military treatment facilities (MTFs) in them that expand the pool
of available providers for the subset of military beneficiaries
enrolled in Prime to the MTF, but even for this subset of
beneficiaries, the list of available providers is dwarfed by the plans
available to federal civilians.
Table 2.--Provider Networks for Military Beneficiaries Compared to Federal Civilians
----------------------------------------------------------------------------------------------------------------
Market Area Specialty TRICARE GEHA BCBS
----------------------------------------------------------------------------------------------------------------
Fayetteville, NC 28310 (Fort Bragg)...... Family Practice............ 64 123 148
OB/GYN..................... 28 86 111
Orthopedic Surgery......... 19 43 163
----------------------------------------------------------------------------------------------------------------
Phoenix, AZ 85004........................ Family Practice............ 94 158 124
OB/GYN..................... 114 126 138
Orthopedic Surgery......... 84 111 108
----------------------------------------------------------------------------------------------------------------
San Diego, CA 92136...................... Family Practice............ 111 149 149
OB/GYN..................... 53 93 78
Orthopedic Surgery......... 90 142 130
----------------------------------------------------------------------------------------------------------------
Source: Sarah K. Burns, ``Network Analysis Methodology,'' Power Point presentation, March 3, 2015.
It is important to note that the ``narrow networks'' of the TRICARE
program are different from the trend in civilian healthcare being used
to control costs. The narrow network options in civilian healthcare are
focused on the best value providers. The Aetna Aexcel Specialist
Performance Network provides a good example. Aetna considers this its
``Tier 1'' network, and it is narrower than their traditional network.
Beneficiaries get reduced cost shares for using providers in this
network. The network is developed in accordance with Aetna's Aexcel
Performance Network Designation Measurement Methodology. \2\ The
designation process is conducted every two years for a provider and is
based on four criteria: volume, clinical performance, efficiency, and
network adequacy. Table 3 illustrates selected clinical performance
measures used by Aetna.
---------------------------------------------------------------------------
\2\ Aetna Performance Network Designation Measurement Methodology,
2016.
Table 3.--Aetna Aexcel Clinical Selected Performance Measures
------------------------------------------------------------------------
Specialty
Measure Description Attribution
------------------------------------------------------------------------
30 Day Readmission Rate-- This measure All specialties
Management Physician. calculates the included in
percentage of Aexcel.
acute care
inpatient
hospitalizations
followed by a
subsequent acute
care inpatient
hospitalization
within 30 days of
the discharge
date of the first
hospitalization.
This measure
excludes
readmissions that
would have been
expected based on
the clinical
nature of the
case.
------------------------------------------------------------------------
Adverse Event Rate/Acute This measure All specialties
Inpatient Hospitalization-- calculates the included in
Managing Physician. percentage of Aexcel.
acute care
inpatient
hospitalizations
that include an
identified
undesirable
(adverse) event
during the
hospitalization.
------------------------------------------------------------------------
Adverse Event Rate--Outpatient This measure Gastroenterology,
Procedure. calculates, for Obstetrics/
members having Gynecology,
selected Orthopedics,
outpatient Otolaryngology,
procedures, the Plastic Surgery,
frequency of an Surgery, Urology
adverse event
within the 30
days after the
procedure.
------------------------------------------------------------------------
Asthma: Use of Appropriate This measure Otolaryngology
Medication. calculates the
percentage of
members age 5 to
64 who were
identified as
having persistent
asthma and
receiving
appropriately
prescribed
medication.
------------------------------------------------------------------------
In contrast, the TRICARE network is based almost exclusively on
per-procedure cost. TRICARE is a strictly FFS program design that bases
its procedure rates on Medicare procedure pricing. A major determinant
of network designation for TRICARE is the willingness of the provider
to accept a procedure rate below Medicare rates. In other words, the
TRICARE network is limited to those providers in a market willing to
take the lowest rates for their services. Although basic standards of
licensure and credentialing are maintained, there is little room for
consideration of health outcomes similar to that described in Table 3
for Aetna's Aexcel program.
This creates a contrast between Aetna's definition of a narrow
network option and TRICARE's narrow networks. Aetna's narrow network is
built upon the providers offering the best value, whereas TRICARE's
narrow network is based on the providers that accept the lowest rate.
This difference in perspective is driven by the fact that the
healthcare sector is focused on total cost and the value received for
the amount paid. An example of this was provided above about an
orthopedic surgeon in Alexandria, Louisiana. That market has several
orthopedic surgeons performing total knee replacements. The surgeon
widely-regarded as the best surgeon in the area can charge higher rates
for the surgery (there is higher demand for their services), but
generally experiences lower costs for the entire episode of care
(because of lower failure rates, quicker healing rates, shorter
physical therapy requirements, etc.). Private insurers observe this
difference and are willing to pay the higher surgical rate,
incentivizing their patients to use the more expensive surgeon. This
cannot be done in the TRICARE system; regardless of health outcomes and
total cost, the surgeons with the lowest per procedure cost will be the
only ones allowed in the TRICARE network. The surgeon discussed in
Alexandria was not a TRICARE network orthopedic surgeon.
It is also important to note that this is not a criticism of the
TRICARE contractors. They are presumably doing the best job they can,
given the contracts awarded to them and the constraints of the system
within which they operate. In fact, the incumbent contractors have
experience outside of TRICARE, where they are making great strides in
raising quality while controlling costs--but they are prohibited from
applying those innovations to TRICARE.
From the perspective of DOD and the taxpayer, the problems created
by the flawed design of the TRICARE program include high utilization
and cost. Healthcare utilization necessary for good health outcomes is
a good thing, but the TRICARE program design encourages utilization for
which the benefits do not exceed the costs. One simple comparison is to
use DOD's data on utilization rates for inpatient care for military
beneficiaries compared to the utilization for a demographically similar
group of people in civilian healthcare plans. This comparison can be
made for beneficiaries in TRICARE Prime with a comparison group in
civilian HMO plans and, separately, beneficiaries in TRICARE Standard
and Extra with a comparison group in civilian Preferred Provider
Organization (PPO) plans. Figure 1 provides these comparisons for 2014,
showing that, for Prime enrollees, utilization is 68 percent higher
than the comparison group and, for Standard and Extra users,
utilization is 133 percent higher than the comparison group. \3\
---------------------------------------------------------------------------
\3\ For outpatient utilization, Prime enrollees had more encounters
than their demographic equivalents in HMO plans, while Standard and
Extra users had fewer encounters than their demographic equivalents in
PPO plans.
---------------------------------------------------------------------------
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
For cost, one simple exercise is to compare DOD's data on the cost
of healthcare utilization for TRICARE beneficiaries to the utilization
for a demographically similar group of people in civilian health care
plans. Figure 2 provides this comparison for Active Duty family members
and, separately, for non-Medicare eligible retirees. The comparison is
for Prime enrollees compared to a demographically similar group
enrolled in a civilian HMO (Health Maintenance Organization) plan. \4\
---------------------------------------------------------------------------
\4\ Results are similar for Active Duty family members who are
Standard and Extra users. Retirees who are Standard and Extra users
show a smaller difference in cost.
---------------------------------------------------------------------------
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The lower cost shares of the TRICARE program (primarily in TRICARE
Prime) are only one factor driving these differences in utilization and
cost. The nature of the TRICARE contracts incentivizes increased
utilization--the lack of risk transfer along with the lack of
flexibility provided to the contractors means that they have little
incentive or ability to manage utilization for cost control. In
testimony to the MCRMC, Dr. Gail Wilensky provided cost estimates of
the potential savings from TRICARE reform, and only about half of the
estimated savings was from changes to cost shares; the rest was from
non-cost-share improvements to program design. \5\
---------------------------------------------------------------------------
\5\ Gail Wilensky, ``Alternative Strategies to Influence Cost and
Utilization,'' PowerPoint presentation, April 9, 2014.
---------------------------------------------------------------------------
Some Basic Principles for TRICARE Reform
The healthcare sector is adopting VBP (Value-Based Purchasing)
methods to promote health outcomes, improve utilization management,
better coordinate care, and control cost. TRICARE reform should be
informed by these trends but, as stated above, simply directing VBP
within the existing TRICARE program structure is not modernization of
the program.
Every transaction is different and a clean and definitive taxonomy
of VBP methods has not yet emerged. Some of the more common examples
include:
1. Capitation: Imposing risk (partial or full) on delivery system
to incentivize improved management of the provider and greater
coordination of care.
2. Bundling: A set of providers agreeing to collectively accept a
pre-determined payment equal to the expected cost for a given set of
healthcare services.
3. Accountable Care Organizations (ACOs): Integration of providers
to achieve joint accountability for achieving quality improvements and
reductions in the rate of spending growth.
4. Pay-for-Performance: Linking payment to measures of quality and
care.
My fellow panelists are experts in these trends and will likely
speak in much more detail about them.
These VBP purchasing trends are primarily focused on the market
between the contractor and the delivery system. DOD's direct influence
is on the transactions between the employer (DOD) and the contractor.
This is where DOD has the opportunity to incentivize efficient
purchasing practices. Figure 3 illustrates the structure of the market
within which the TRICARE contracts operate. As stated above, the market
between DOD and the contractor is currently composed of five-year,
winner-take-all contracts with little substantive risk-bearing by the
contractor, and largely restricts the contractor to FFS purchasing
methods in the downstream market between the contractor and the
delivery system.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Three basic principles for the design of the TRICARE program in the
relationship between DOD and the contractor that will determine how
well the program will ultimately perform are:
Competitiveness: This is a key to incentivizing carriers/
contractors to focus on the preferences of beneficiaries.
Risk-bearing: This is a key to incentivizing the
carriers/contractors to aggressively manage cost and improve outcomes.
Flexibility: This allows the risk-bearing carrier/
contractor to compete and evolve their suite of tools as the market
changes and conditions vary across markets.
As discussed above, choice is the key attribute of benefit design
because it empowers the beneficiary to correct other problems with the
benefit, and it creates a simpler program design that is self-
correcting and monitoring--a plan that fails to offer what the
beneficiaries want is driven from the market, with no DOD intervention
required. The ultimate objective of TRICARE reform should be to ensure
that beneficiaries have multiple options in each market from which they
can choose. Most large federal healthcare programs are based on this
principle (e.g., Medicare Part C, Medicare Part D, and FEHBP). These
existing government programs provide examples of how TRICARE reform
could accomplish this. Per the MCRMC recommendation, TRICARE reform
could provide a cafeteria-style menu of plan options in each market
(similar to FEHBP). The MCRMC recommended moving at once to this
alternative to avoid paying overhead for two distinct program designs
and for improved incentives, but an alternative would be to make FEHBP
enrollment an option for beneficiaries in select markets to begin a
process of transitioning to a competitive framework. Alternatively, the
Medicare Part C approach could be used and, in fact, is already used in
six areas of the country with the United States Family Health Plan
(USFHP), although this is the only allowed alternative in these
markets, which does not allow for full competition. In this framework,
TRICARE reform could include the expansion of additional fully
capitated (i.e., risk-bearing) plans in individual markets. These
additional plans could be delivery system-based like USFHP or could be
expanded to allow traditional insurance carriers to provide options
within markets. Like Medicare Part C and USFHP, specific plan
attributes could be regulated (e.g., covered services and cost-share
structures).
Risk-bearing contracting incentivizes the contractor to focus on
cost. In traditional contracting, forcing the contractor to bear risk
raises cost, and self-insuring (DOD bearing the risk) lowers average
cost. That logic applies when all else is held constant. In healthcare
contracting, the biggest factors in determining the contractor's costs
are the incentives placed on them to manage care and control cost. In
other words, exposing the contractor to risk can actually lower the
cost of delivering the benefit.
With competitive, risk-bearing contracts, the contractor can then
be given the flexibility (in both VBP methods and, within established
bounds, in benefit design) to deliver the benefit. In the current
TRICARE design, DOD's strategy for ensuring contractor performance is
to micromanage the contractor (e.g., directing them to use FFS
contracting only). With competitive, risk-bearing contracts, the choice
behavior of beneficiaries ensures contract performance, and the
contractors can be left free to innovate and adapt to market conditions
as they vary geographically and evolve over time.
Different reform options (e.g., making FEHBP available or adding
capitated plans in each market) can be evaluated based on the degree to
which they advance these principles. The more the three principles are
advanced, the higher the quality of the benefit will be and the greater
the savings to DOD. Figure 4 illustrates how these different reform
options can be evaluated.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Although they are not the primary focus of this testimony, it is
also important to briefly mention two additional populations of TRICARE
beneficiaries: Reserve Component members and Medicare-eligible
retirees. Members of the Guard and Reserve eligible for TRICARE
benefits experience many of the same challenges with choice and access
as Active Duty family members and retirees, but the impact of TRICARE's
design flaws can be even more severe. Many Guard and Reserve members
live further from military bases than the Active and retiree
populations, where TRICARE networks can be even less developed, driving
even more significant choice and access problems. TRICARE reform is an
opportunity to improve the health benefit provided to Guard and Reserve
members.
Medicare-eligible retirees using the TRICARE for Life (TFL) program
present a unique opportunity for TRICARE reform if Congress decides to
include that population. TFL beneficiaries' healthcare costs are paid
both by Medicare and DOD. Their costs tend to be very high and, for
similar reasons to the discussion above, there is little coordination
of their care for promotion of health outcomes and cost control. This
is even more important for this older population because of the higher
complexity of their care as they age. Neither DOD nor Medicare are
fully in control of this situation or incentivized to deal with the
problem because of the division of the costs. Significant opportunities
are likely available to improve care while reducing costs by
introducing capitated (e.g., Medicare Advantage-like) plans for
Medicare-eligible retirees.
tricare reform can be used to improve medical readiness
The readiness of the military medical force to conduct its deployed
mission should be a primary consideration in TRICARE reform. The
military medical community built an incredible level of capability and
readiness during the wars in Iraq and Afghanistan. The MHS in its
current form cannot maintain that capability, and it will atrophy as
attention returns to peacetime beneficiary care delivery. The MCRMC
found that ``[r]esearch reveals a long history of the military medical
community needing to refocus its capabilities at the start of wars,
after concentrating during peacetime on beneficiary health care.'' \6\
TRICARE reform should be leveraged to break this historic cycle and
help ensure we start the next war with the most ready medical force
possible.
---------------------------------------------------------------------------
\6\ MCRMC report, citing Bernard Rostker, Providing for the
Casualties of War: The American Experience Through World War II (Santa
Monica, CA: RAND, 2013) and General Accounting Office, Medical
Readiness: Efforts Are Underway for DOD Training in Civilian Trauma
Centers, GAO/NSIAD-98-75 (Washington, DC: GAO, April 1998), 12.
---------------------------------------------------------------------------
Medical readiness challenges
The military medical mission of DOD is to provide a medical force
ready to deploy for the provision of medical care. The MHS combines
this operational mission with the delivery of beneficiary healthcare by
using the military medical force during peacetime to deliver a portion
of beneficiary healthcare in house in military hospitals. Although
there have been long standing challenges with this model, \7\ it arose
in a period of time when medicine was less specialized than today and
theater medical care included significantly longer-term care than is
currently practiced.
---------------------------------------------------------------------------
\7\ Rostker, Providing for the Casualties of War.
---------------------------------------------------------------------------
The challenges with the model have grown over time as there have
been changes to warfighting and the practice of medicine. Examples of
these changes include: \8\
---------------------------------------------------------------------------
\8\ This material is drawn from John E. Whitley, Brandon Gould,
Nancy Huff, and Linda Wu, ``Medical Total Force Management,'' IDA Paper
P-5047 (Alexandria, VA: Institute for Defense Analyses, May 2014). See
that paper for a more detailed discussion.
Moving to a more decentralized, mobile battlefield--which
drives a smaller medical footprint in operational theaters;
Evacuating casualties early--which is better for the
casualties and reduces risk to forces in theater;
Greater specialization in the profession of medicine; and
Shifts in medical workload on the modern battlefield,
e.g., more immediate and less definitive care, different wound and
injury patterns as body armor and weapons evolve, and earlier
transportation of patients than would have occurred in earlier
conflicts.
These changes in warfighting have implications for medical force
requirements and readiness. The shift to more mobile operational forces
with a lighter theater footprint produced a shift in the required
operational medical capabilities--medical forces may be often forward-
deployed with operational units and provide more immediate complex
medical care. There is also less definitive care, as the historic model
of extensive in-theater care, practiced in World War II and Korea, has
been replaced with rapid evacuation to hospitals outside the
operational theater. Lower in-theater holding times decrease the
deployable medical requirement. However, a lower theater medical
requirement that is deployed further forward and provides more
immediate care limits the opportunities for substitution across
specialties, increasing demand for highly specialized medical
personnel. A hospital with a requirement for ten surgeons can more
readily substitute two obstetricians alongside eight surgeons than a
forward-deployed surgical team with a requirement for two surgeons;
there is not enough overlap in staff for the requirement to be met with
one surgeon and one obstetrician. In summary, the degree of overlap
between the operational mission and the beneficiary care mission has
eroded over time, causing the readiness requirement to become
increasingly focused on more complex immediate life-saving care that is
seldom seen in peacetime military hospitals.
As the MCRMC report identified, ``[r]elying on existing MTF medical
cases as a training platform for combat care can result in a
misalignment of military medical personnel compared to the medical
requirements necessary to support the operational missions.'' \9\ Table
4 illustrates this misalignment in the early years of Operation Iraqi
Freedom and Operation Enduring Freedom. The Service-identified medical
force requirements were for operationally required specialties such as
surgeons and anesthesiologists, but the actual executed force was
composed of specialties more in demand for beneficiary healthcare.
---------------------------------------------------------------------------
\9\ MCRMC Final Report, 64-65.
Table 4.--Misalignment of Medical Force
----------------------------------------------------------------------------------------------------------------
FY 2004 Military FY 2004 Executed End- End-Strength Minus
Specialty Requirement Strength Requirement
----------------------------------------------------------------------------------------------------------------
Pediatrics........................ 286 645 359
Obstetrics........................ 208 387 179
Anesthesiology.................... 318 259 -59
General Surgery................... 685 443 -242
----------------------------------------------------------------------------------------------------------------
Source: ``DOD Force Health Protection and Readiness--A Summary of the Medical Readiness Review, 2004-2007,''
June 2008.
Although this misalignment improved during the wars, \10\ more
recent research has still found misalignment:
---------------------------------------------------------------------------
\10\ John E. Whitley et al., ``Medical Total Force Management.''
Today the U.S. Army has less than a dozen prehospital physician
specialists and about the same number of trauma surgeons on
Active Duty. By comparison, the Army has roughly the same
number of radiation oncologists and nearly three times the
number of pediatric psychiatrists and orthodontists. This is
largely because medical specialty allocations are based on
traditional peacetime beneficiary care needs. Refocusing on the
wartime needs could populate key institutional and operational
billets with a critical mass of trained prehospital and trauma
specialists and drive further advances in battlefield care
during peacetime. \11\
---------------------------------------------------------------------------
\11\ R. L. Mabry and R. DeLorenzo, ``Challenges to Improving Combat
Casualty Survival on the Battlefield,'' Military Medicine 179, No. 5
(May 2014): 477-82.
These alignment issues are a significant readiness challenge.
During the wars, the medical force experienced uneven deployment rates,
with the operationally required specialties having relatively high
deployment rates and experiencing potential force stress while other
specialties hardly deployed. \12\ Interviews conducted with Combatant
Command (COCOM) staffs by the MCRMC found challenges in sourcing
operational medical requirements.
---------------------------------------------------------------------------
\12\ Whitley et al., ``Medical Total Force Management.''
---------------------------------------------------------------------------
The reason for this misalignment is that the military hospital
system does not have sufficient workload to support the operationally
required specialties--so the military medical force migrates to
beneficiary care specialties. The challenge is compounded by the fact
that even when the right specialties are employed, the workload is
still not ideal for preparing the medical personnel for their deployed
mission. As the MCRMC report identified,
[s]urgeons overwhelmingly cited vascular surgeries as the most
difficult cases [they faced in combat], followed by
neurosurgical procedures, burns, and thoracic cases. Surgeons
reported they had difficulty with these procedures because they
had not performed them in nondeployed clinical settings, and
because there had been a substantial time lapse since they had
last treated these types of injuries. \13\
---------------------------------------------------------------------------
\13\ MCRMC Final Report, 63-64, citing Joshua A. Tyler et al.,
``Combat Readiness for the Modern Military Surgeon: Data from a Decade
of Combat Operations,'' Journal of Trauma and Acute Care Surgery 73,
No. 2 (2012): S64-S70, http://www.ncbi.nlm.nih.gov/pubmed/22847097.
GAO found ``[s]ince most military treatment facilities provide
health care to Active Duty personnel and their beneficiaries and do not
receive trauma patients, military medical personnel cannot maintain
combat trauma skills during peacetime by working in these facilities.''
\14\
---------------------------------------------------------------------------
\14\ General Accounting Office, ``Medical Readiness: Efforts Are
Underway,'' 12.
---------------------------------------------------------------------------
To illustrate this challenge, Table 5 provides the top ten
inpatient diagnoses in the military hospital system in 2015 and Table 6
provides the top ten inpatient diagnoses in Iraq in 2007.
Table 5.--Top Ten Inpatient Diagnoses in Military Hospitals, 2015
------------------------------------------------------------------------
Clinical Classification Software (CCS) Grouping Dispositions
------------------------------------------------------------------------
Newborn Care.............................................. 48,490
Normal Pregnancy and Delivery............................. 46,947
Complications of Pregnancy................................ 45,427
Unclassified Care......................................... 44,281
High Blood Pressure....................................... 43,701
Perinatal Conditions...................................... 37,695
Screening/History of Mental Health and Substance Abuse.... 36,403
Complications of Pregnancy--Care of Mother................ 32,708
Disorders of Lipid Metabolism............................. 31,305
Nutritional, Endocrine, and Metabolic Disorders........... 27,887
------------------------------------------------------------------------
Table 6.--Top Ten Inpatient Diagnoses in Iraq, 2007
------------------------------------------------------------------------
Clinical Classification Software (CCS) Grouping Dispositions
------------------------------------------------------------------------
Open wounds of head, neck, and trunk...................... 3,488
Open wounds of extremities................................ 2,650
Other injuries and conditions due to external causes...... 2,274
Fracture of lower limb.................................... 992
Nonspecific chest pain.................................... 986
Abdominal pain............................................ 683
Crushing injury or internal injury........................ 589
Other specified and classifiable external causes of injury 571
Fracture of upper limb.................................... 563
Skin and subcutaneous tissue infections................... 543
------------------------------------------------------------------------
These tables understate the challenge because, in addition to
having different preponderances of diagnoses, even when the diagnoses
overlap, they differ in their severity. For example, open wounds of the
head, neck, and trunk are seen in military hospitals, but the cases
seen in Iraq were over twice as severe (as measured by probability of
death) as those seen in military hospitals. For open wounds of
extremities, the Iraq cases were almost four times as severe as the
military hospital cases.
Leveraging TRICARE reform to improve medical readiness
The MCRMC recommended a comprehensive solution to deal with these
challenges that included:
Providing new tools and access to new beneficiary
populations to attract a medical workload of the required case mix and
complexity to maintain medical readiness;
Developing a new concept of ``Essential Medical
Capabilities'' (EMCs) and integrating EMCs into readiness reporting
tools and processes to increase measurement, transparency, and
accountability for medical readiness;
Realigning funding to improve incentives for maintaining
medical readiness; and
Establishment of new command structures and changes to
Joint Staff structures to focus leadership attention on medical
readiness and provide authority to ensure it is a priority.
The third element of the recommendation (realigning funding) will
be discussed in the final section of this testimony under MHS reform.
The fourth element of the recommendation (new command structures) is
beyond the scope of this testimony on TRICARE reform (although
streamlining management structures is mentioned in the final section on
MHS reform). The first two tie integrally into TRICARE reform.
The first element (new tools and populations) is directly relevant
to TRICARE reform. In its simplest form, there are only two solutions
to the readiness problem--patients providing the right case mix have to
be brought to the military medical personnel for training or the
military medical personnel have to be taken to the right patients. Our
allies have wrestled with this problem already. The United Kingdom
closed its military hospitals and moved its military personnel to
civilian hospitals with more volume and better case mix. Germany still
has military hospitals but has opened them to civilian patients. We are
big enough to follow an ``all of the above'' approach. TRICARE reform
provides an opportunity to begin this transformation.
DOD currently has few tools for attracting care into MTFs.
Compounding this problem is that the few tools available, e.g.,
cancelling civilian primary care managers, brings the wrong care into
MTFs--it brings routine and primary care into MTFs when what is needed
is a case mix that includes complex surgery and trauma. Redesigned
TRICARE contracts can include provisions to channel certain types of
care into MTFs. The most rigorous example of this is provided by the
MCRMC recommendation that the MTFs be reimbursed for the care they
deliver and allowed to differ the prices of procedures to attract the
right case mix. Although using price is the most powerful way to
channel care, there are also more limited options that can be used. One
straightforward method would be to include performance measures in the
redesigned TRICARE contracts that include channeling of care and are
tied to payments. Another would be to make the MTFs available to the
contractors for free or reduced-price care for the required case mix.
TRICARE reform also provides opportunities for getting military
medical personnel out to civilian settings that provide a better case
mix. One direct approach would be if delivery systems become TRICARE
contractors. This would increase DOD's ties to these healthcare
providers and expand opportunities for placement of military personnel
into civilian facilities.
The EMC recommendation of the MCRMC is focused on improving
transparency and accountability for readiness. An important reason for
directing DOD to implement the EMC framework as part of TRICARE reform
is that it will give Congress information on readiness that can be used
to evaluate readiness trends, providing Congress an opportunity to
provide oversight and further direction if DOD begins to let readiness
lapse during peacetime.
tricare reform is an opportunity for mhs reform
The MHS is a complex interweaving of missions (beneficiary care and
readiness), delivery systems (MTFs and purchased care), benefits, and
funding sources. It involves duplicative management layers and fails to
incentivize unity of effort on the key outcomes of maintaining
readiness, providing a high-quality benefit, and controlling cost.
TRICARE reform provides Congress an opportunity to reform the entire
MHS to create a more streamlined system that incentivizes a focus on
these outcomes.
As stated in the previous section, the MHS combines two primary
missions. The operational or readiness mission--inherently military and
performed with military personnel--is to provide medical care during
wartime or other deployed contingencies. The MHS also supports the
beneficiary care mission, which does not have to be performed with
military personnel or hospitals; about two-thirds of this mission is
delivered by purchasing private sector care. The reason that some of
the beneficiary care mission is performed in house is because it has
historically been used as the training venue for the military medical
personnel supporting the operational mission. These personnel have had
dual assignments; they are assigned to a military hospital to provide
beneficiary healthcare in-house and are also assigned (directly in
their assignment orders or indirectly by forming a pool of available
personnel) to an operational platform such as a theater hospital or a
surgical company. Figure 5 illustrates this dual-mission framework.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The dual mission framework dominates the organization of the MHS.
Military personnel are required for the operational mission, but used
for the beneficiary care mission. MTFs are justified as readiness
training platforms for the operational mission, but used for the
beneficiary care mission. A large portion of the funding for both
missions is provided in a consolidated appropriation (the Defense
Health Program (DHP)). Leadership are responsible for both missions,
but may have their evaluations dominated by beneficiary care
considerations.
Specific challenges created by the structure of the MHS include:
Conflicting missions for the military hospital system:
The ``direct care'' system of MTFs exists to support the readiness of
the military medical force, but is generally used for beneficiary
healthcare with little readiness focus in its day-to-day operations.
Lack of transparency in funding: The line Service
leadership, Office of Secretary of Defense (OSD), and Congress cannot
identify how much is spent on beneficiary care and how much is spent on
readiness, reducing effectiveness of resource allocation decision
making and accountability.
Lack of focus on readiness (discussed in the previous
section).
Conflicting Missions for the Military Hospital System
The MHS direct care system includes over 50 inpatient military
hospitals and over 300 outpatient clinics. The purpose of having a DOD-
run MTF system is for it to serve as the clinical skill maintenance
platform for the operationally required military medical force. Its
day-to-day workload and operations are almost exclusively focused on
beneficiary healthcare. This puts military hospital commanders in an
almost impossible situation and creates a climate of confusion within
the MHS that affects everything from staffing decisions to major
investment decision making. Some simple examples of the confusion
include:
Emergency Medicine: Emergency medicine physicians were
one of the specialties with the highest deployment rates to Iraq and
Afghanistan. \15\ Touring a typical MTF reveals that the Emergency
Department is often staffed with contracted civilian physicians while
pediatrics and obstetrics are mostly military.
---------------------------------------------------------------------------
\15\ Whitley et al., ``Medical Total Force Management.'' See Figure
2, p. 32.
---------------------------------------------------------------------------
Outsourcing Surgical Workload: Surgical workload is
generally more relevant for maintaining the clinical skills of the
military medical force, but MTFs generally outsource this workload to
private sector care while retaining in house more care in areas like
obstetrics. Table 7 illustrates this for three DOD markets, and it can
be seen that obstetric workload is generally kept in house at over
twice the rate of surgical workload.
Table 7.--Surgical versus Obstetric Workload Mix
----------------------------------------------------------------------------------------------------------------
Surgical Workload Obstetric Workload
-----------------------------------------------------------------------
Market Military Purchased Military Purchased
Hospital Care % Military Hospital Care % Military
----------------------------------------------------------------------------------------------------------------
Las Vegas, Nevada....................... 1,315 4,749 22% 582 651 47%
Pensacola, Florida...................... 657 5,403 11% 368 888 29%
Ft. Polk, Louisiana..................... 192 203 49% 409 24 94%
----------------------------------------------------------------------------------------------------------------
Graduate Medical Education (GME) Programs: The direct
care system supports DOD-run GME or residency programs, but there is
little attempt to focus these on operationally required specialty areas
like trauma, surgery, emergency medicine, etc.
This confusion is an important driver of excessive costs in the
MHS. The direct care system is expensive to operate, with the average
military hospital costing about 50 percent more to deliver inpatient
care than it would cost to purchase that care in the local markets at
current payment rates. \16\ Table 8 illustrates this cost difference
for three markets in which DOD operates. \17\
---------------------------------------------------------------------------
\16\ See Philip Lurie, ``Comparing the Costs of Military Treatment
Facilities with Private Sector Care,'' IDA P-5262 (Alexandria, VA:
Institute for Defense Analyses, 2016) (forthcoming). See Table 6, p.
27.
\17\ Inpatient care is used for illustrative purposes. Comparisons
of outpatient care yield similar results.
Table 8.--Military Hospital Inpatient Costs versus Private Sector Care
------------------------------------------------------------------------
Cost of Purchasing
Market Inpatient Military Care in Local
Hospital Cost Market
------------------------------------------------------------------------
Nellis Air Force Base, Nevada... $34,624,144 $29,909,465
Naval Air Station Pensacola, $31,180,755 $13,747,915
Florida........................
Ft. Polk, Louisiana............. $14,727,029 $6,604,439
------------------------------------------------------------------------
Source: Lurie, ``Comparing the Costs of Military Treatment Facilities
with Private Sector Care.''
When the direct care system is successfully delivering its
readiness mission, i.e., providing readiness training for the military
medical force, this excess cost may be justified--a necessary cost for
ensuring our warfighting capability. In cases in which the direct care
system is not succeeding in its mission, this excess cost is a source
of inefficiency in the MHS--wasting taxpayer resources that could be
used to increase compensation or reallocated elsewhere in the defense
budget for mission delivery.
DOD recently conducted an extensive internal study of the direct
care system, finding that many military hospitals did not have
economically viable inpatient capacity and should be right-sized to the
workload they can effectively support. This study, the MHS
Modernization Study, was not able to directly assess the degree to
which military hospitals were meeting the readiness mission and instead
focused on workload in major specialty areas. Although imperfect, this
workload analysis provided a valuable ``lower bound'' measure for the
readiness question--a hospital that does not have enough workload in a
particular specialty area to maintain an economically viable capacity
does not have enough workload to maintain the readiness of military
providers in that area.
The MHS Modernization Study also ended up providing important
evidence on why the direct care system is so costly. It found very low
levels of productivity across specialties and across facilities in the
direct care system. The study began by obtaining civilian provider
workload by specialty. It then compared DOD providers in the direct
care system to these civilian distributions, finding that providers in
the DOD direct care system were generally below the tenth percentile of
civilian providers in workload produced per year. Table 9 provides data
DOD shared with the MCRMC from the MHS Modernization Study. For four
specialties, it provides the average workload--as measured by relative
value units (RVUs), which provide a measure of intensity-adjusted
workload--of providers within MTFs as a percentage of the civilian
median. Since percentage of median is not a commonly used statistical
measure of a distribution, Table 10 converts it to a percentile of
civilian providers under the assumption that the civilian distribution
is approximated by a gamma distribution. As can be seen, the average
providers in MTFs operate at significantly lower workload levels than
civilian providers.
Table 9.--Average Workload in Ten Largest DOD Markets as Percentage of Civilian Median
----------------------------------------------------------------------------------------------------------------
Market Emergency Medicine Family Medicine General Surgery Orthopedic Surgery
----------------------------------------------------------------------------------------------------------------
National Capital Area........... 31% 43% 18% 26%
Tidewater, Virginia............. 49% 36% 22% 41%
San Diego, California........... 60% 48% 34% 35%
Puget Sound, Washington......... 33% 27% 36% 43%
San Antonio, Texas.............. 28% 54% 39% 41%
Bragg/Pope, North Carolina...... 21% 30% 36% 39%
Ft. Hood, Texas................. 47% 15% 37% 37%
Colorado Springs, Colorado...... 35% 39% 28% 36%
Hawaii.......................... 34% 22% 39% 41%
Jacksonville, Florida........... 59% 55% 41% 29%
----------------------------------------------------------------------------------------------------------------
Table 10.--Average Workload in Ten Largest DOD Markets as a Percentile of Civilian Providers
----------------------------------------------------------------------------------------------------------------
Market Emergency Medicine Family Medicine General Surgery Orthopedic Surgery
----------------------------------------------------------------------------------------------------------------
National Capital Area........... 1% 2% 0% 0%
Tidewater, Virginia............. 8% 1% 0% 3%
San Diego, California........... 15% 3% 2% 2%
Puget Sound, Washington......... 1% 0% 2% 4%
San Antonio, Texas.............. 1% 6% 3% 3%
Bragg/Pope, North Carolina...... 0% 0% 2% 2%
Ft. Hood, Texas................. 6% 0% 2% 2%
Colorado Springs, Colorado...... 2% 1% 1% 2%
Hawaii.......................... 2% 0% 3% 3%
Jacksonville, Florida........... 15% 7% 3% 1%
----------------------------------------------------------------------------------------------------------------
Very low productivity is an important proximate cause of the high
cost of the direct care system, but to understand how to reform the
system, it is necessary to identify root causes for the inefficiency.
Likely root causes include the following factors:
Direct care system run as military units: Military
hospitals are led and administered as military units and justified by
their readiness mission. In actual practice they are almost exclusively
focused on beneficiary healthcare delivery. This misalignment of
leadership and administrative structure with actual operations and
functions means that the wealth of experience in civilian healthcare at
running effective and efficient hospitals is not applied to military
hospitals. Professional business management of these large complex
businesses is not used.
Military hospitals don't have to directly compete for
business: Private hospitals that cannot manage themselves effectively
lose business and either get better or go bankrupt. Military hospitals
are protected from this disciplining force of markets by simply being
given bigger budgets to account for their inefficiency and attempts are
made to coerce beneficiaries that choose to go elsewhere to return to
the system. \18\
---------------------------------------------------------------------------
\18\ See, for example, Amy Bushatz, ``Families Forced to Give Up
Civilian Health Care,'' June 27, 2014. http://www.military.com/daily-
news/2014/06/27/some-families-forced-to-give-up-civilian-health-
care.html
---------------------------------------------------------------------------
Military hospitals given a budget for inputs instead of
paid for outputs: Funding large DOD support missions that approximate
commercial activities with direct appropriation for their inputs
instead of on a reimbursable basis for outputs produced is a funding
mechanism long ago abandoned in most other large support mission areas,
e.g., logistics, financial services, and information services. Military
hospitals still receive their funding according to the inputs they
consume instead of the outputs they produce.
Military hospitals overuse military personnel for non-
operational specialties: As discussed in the readiness section above,
the military medical force is overstaffed in beneficiary care areas
like pediatrics and obstetrics. Military personnel are generally more
costly than civilian personnel, so the use of military personnel not
required to be in uniform for delivery of beneficiary care is
inefficient and drives higher costs.
Lack of Transparency in Funding
The root causes listed above all relate, at least in part, to a
lack of transparency in the funding structure of the MHS. The DHP
appropriation provides almost all of the funding for beneficiary
healthcare and a large portion of the funding for the readiness of the
medical force in a single, undifferentiated amount. The impact of this
on resource allocation decision making includes:
Healthcare benefits and medical readiness are put into a
direct tradespace with each other, competing for resources against each
other. Decision makers are forced to make tradeoffs between increasing
medical readiness at the expense of the health benefit or vice versa,
with no direct considerations of readiness more broadly or compensation
more broadly.
Medical readiness is removed from the tradespace of other
readiness functions within each Service so that the Services cannot
easily create a balanced readiness plan across medical and non-medical
functions.
Healthcare benefits are removed from the tradespace of
compensation instruments (e.g., base pay, special and incentive pays,
retirement, and quality of life programs) so that compensation cannot
be easily understood and balanced across the range of compensation
instruments.
This distortion of decision making trade-off spaces is compounded
by the lack of visibility and transparency available to the Service
line leadership, OSD, and Congress. This reduces incentives to manage
healthcare. For example, a Service Chief has little incentive to
actively manage the healthcare portfolio because doing so incurs the
political cost of managing a three star officer within the Service, but
fails to yield a benefit because the savings are within an OSD account
and unlikely to be given to the Service.
Some Basic Principles for MHS Reform
The overarching principle that should guide MHS reform is
increasing transparency between and separation of the operational
mission and beneficiary healthcare. Complete separation may not be
obtainable (at least in the short-run), but an increased degree of
separation will improve focus on readiness and allow for more rational
management of the direct care system and benefit. Incremental steps in
which this further separation can be achieved include reforms to
funding, MTF management, and benefit administration.
One of the biggest challenges mentioned above is the commingling of
funding for readiness and beneficiary healthcare. TRICARE reform
provides an opportunity to advance the principle of clearly identifying
the costs of the health benefit and separately budget for them in the
appropriate way, i.e., in the military personnel budget account.
Purchasing a benefit in a risk-bearing contract provides a clear
measurement of benefit cost. In addition, the budgets for many of the
overhead functions are spread across DHP accounts, and TRICARE reform
would centralize them in the contracts. Placing this funding into the
MILPERS appropriation account would then separate it from readiness and
provide it in the appropriate location for its function, increasing
transparency of the defense budget and improving incentives for
compensation management within DOD.
With the health benefit costs separately identified and accounted
for in the military personnel accounts, the remaining funding in the
unified medical program is readiness-related (or inefficiency) and can
then be placed in Service readiness accounts. In addition to increasing
transparency, this removes the artificial tradespace created between
medical readiness and benefits. It puts medical readiness into a
tradespace with other readiness investments so that efficient decision
making can occur. Basic principles of funding and budgetary account
structure include:
Costs of personnel benefits should reside in MILPERS
budget accounts.
Costs of readiness should appear in Service readiness-
related budget accounts.
MTFs and other activities replicating commercial
activities should be funded according to outputs produced, not inputs
consumed.
Costs should be recognized in the budget when the
obligation is incurred.
The high costs of the MTF system are a major driver of costs in
delivering the healthcare benefit. Ultimately, DOD will likely have to
rationalize a large number of its current facilities and focus its
direct care investments on the core MTFs that can become readiness
training platforms, creating truly world class capabilities in the
things DOD should be focused on, such as trauma, burns, and brain
injuries. TRICARE reform provides an opportunity to begin reform of the
MHS in ways that will improve incentives for more effective and
efficient MTF management. Three basic principles that should be applied
include:
MTFs should be professionally managed: Organizing and
operating MTFs like military units when the majority of the daily
operations are the provision of beneficiary healthcare with little
difference from civilian hospitals is inefficient. It fails to take
advantage of the expertise resident in the healthcare sector at running
medical facilities. A simple incremental step that could be taken as
part of TRICARE reform is directing that a group of MTFs be placed
under civilian management (e.g., as government owned, contractor
operated (GOCO) facilities) on a trial basis. One limited example of
professional management being used in the management of the direct care
system already is two outpatient clinics in the national capital region
and by most accounts this is considered very successful. If military
hospitals are to be maintained, they should be led and operated by
business professionals.
MTF management layers should be reduced: The direct care
system is actually four separate systems, three systems separately
managed by each Military Department and one additional system (the
National Capital Region) managed by the Defense Health Agency (DHA).
This duplication of overhead functions is another driver of high costs.
Consolidating oversight of the MTFs in conjunction with the
introduction of professional management per the item above would likely
reduce cost. If MTFs were managed separately from the readiness
function (e.g., the MTFs are consolidated within the DHA), this would
also help improve the focus on medical readiness within the Services by
removing the conflicting priority they face.
MTFs should be funded according to outputs instead of
inputs: The MTFs are the last large support function in DOD that are
still funded with a budget for inputs instead of for the outputs they
produce. One way to achieve this is by placing them in a revolving
fund. Another, overlapping, option would be to GOCO the MTFs with the
contractor's payments based on healthcare delivered.
MTFs should face competition: Competition is the ultimate
disciplining force in markets, and lack of competition is a primary
driver of inefficiency. Ensuring that the MTFs face competition for
beneficiaries and care delivery is the most important structural reform
for focusing them on improvement. It should also be noted that this
does not threaten readiness. The care the MTFs are primarily delivering
and that would be at risk of moving to the private sector if the MTFs
failed to effectively compete is obstetrics and other areas of
beneficiary care that are not readiness related. In areas where DOD has
invested in developing world-class readiness capabilities (e.g., burns
and orthopedic rehabilitation in San Antonio), DOD should have no
trouble competing for patients.
MTFs that cannot succeed in their mission should be
downsized or closed: Many MTFs today are not providing sufficient
workload of the required case mix to support their readiness mission.
For many of these, there is no reasonable or practical way to get the
right workload into the facility and, thus, the facility will not be
able to succeed in its mission. These facilities should be transitioned
to clinics or closed.
Finally, TRICARE reform offers an opportunity to improve benefit
administration. Purchasing a benefit for an individual or family in a
risk-bearing contract implies transferring many of the benefit
administration functions currently conducted in-house by DOD to
professionals from the private sector that perform these functions for
a living. This will have the likely effect of streamlining MHS
bureaucracy and lowering the costs of these administrative functions.
TRICARE reform could go further and affirmatively transfer
responsibility for benefit administration to the personnel management
and compensation community. Providing a healthcare benefit is not an
inherently military function, and evidence shows that it becomes a
competitor for medical readiness when combined in the MHS. Clearly
defining healthcare benefits as a compensation issue to organize and
manage them as such within the DOD would be an important MHS reform.
Senator Graham. Thank you all.
I will lead this off and let other members ask questions. I
want to thank my colleagues for attending.
I am going to make a general statement and see if you agree
with it. The battlefield medical care provided in the last 14
years has produced outcomes historic in terms of warfare. Does
anybody disagree with that?
[No response.]
Senator Graham. The answer is you all agree. Nod your
heads. Everybody nodded their head.
Let us make sure we do not break the one thing that is
working.
Now, Mr. Whitley, you said that military hospitals are
skewed toward basically family care and not battlefield
medicine readiness. Well, how do you explain that in light of
my first statement?
Dr. Whitley. It is a very sensitive issue and I want to be
very careful in how I describe it, Senator.
You said that the survival rates on the battlefield have
reached unprecedented heights, and that is true. I think that
is a great testament to everybody involved in that situation.
What I would caution, though, is using that as a measure of
success of the clinical currency, the clinical readiness of the
medical force prior to deployment, particularly at the start of
the wars in 2001 and 2002 and 2003. That measure of the overall
survival rate was contributed to by many things. We fought the
war differently. We organized the battlefield differently. We
moved patients differently, and we had some of the best men and
women in uniform providing medical care down-range that we
could have ever possibly had. That measure is the cumulative
effect of all those things.
I think what we are asking here when we talk about the
military hospitals, we talk about the readiness of the medical
force, we have get down to more specific measures that get at
the question of----
Senator Graham. Here is my concern. If you a uniformed
doctor or nurse, you can be deployed. TRICARE network
physicians are not going to be deployed. What I want to do is
make sure that in trying to fix a system that I think is very
much in need of repair that we do not destroy the one thing
that seems to work very well. I am going to look at your reform
measures, but I also want to make sure that anything we do in
the military hospital systems enhances the battlefield
medicine. If we need that footprint, even though it may not be
the most efficient way to deliver health care, because these
doctors and nurses will do something nobody else will do--they
will go to the battlefield themselves, and they are going and
they are going to practice in an environment where they can be
shot at. Let's don't miss that boat.
Dr. Loftus and Dr. Fendrick, when you look at TRICARE for
families, for the retiree community and family members and
Active Duty members, how antiquated would you say it is on an A
to F rating?
Dr. Loftus. Well, that is a difficult question.
Senator Graham. That is why I asked it.
Dr. Loftus. Yes. I would say that I have seen aspects or
observed from the outside aspects that I think do----
Senator Graham. What grade would you give it overall?
Dr. Loftus. A grade on an antiquated basis? I would give it
a B.
Senator Graham. We are starting with a B.
What about you, Dr. Fendrick?
Dr. Fendrick. I would say B-plus actually.
Senator Graham. Dr. McIntyre?
Mr. McIntyre. I would say somewhere around a B-minus in
terms of keeping up with where we need to be.
Senator Graham. Dr. Whitley?
Dr. Whitley. I will be the odd man out. I give it a C at
best.
Senator Graham. What is the 30-second answer to get us to
A?
Dr. Loftus. I think that the military health system needs
to do a better job of measuring its actual performance and
trying to compare itself to internal and external benchmarks
and to work continuously to improve that care.
Senator Graham. Dr. Fendrick?
Dr. Fendrick. I would pay providers more for providing the
services that make military members healthier. There is a very
strong evidence base that backs that up and go further to make
it easy for those members to do that. It is very
straightforward.
Senator Graham. Mr. McIntyre?
Mr. McIntyre. I would ensure that providers are getting
paid for their performance and their quality.
Number two, I would make the patient in part responsible
for their care from an incentive and disincentive perspective.
Third, I would index the benefit so that it properly keeps
pace with inflation.
Fourth, I would focus on the question of alignment of the
providers that are in the direct care system with the providers
that are downtown both in terms of requirements but also in
terms of what their focus is for the patient.
Senator Graham. Dr. Whitley?
Dr. Whitley. I would focus with respect to the TRICARE
contracts--I would focus on increasing greater competition,
having annual contracts with multiple winners per location. I
would focus on making those contracts risk-bearing, and I would
focus on increasing the flexibility to the contractor to manage
the care.
Senator Graham. If you have not done so, could you provide
in a three- or four-page report to the committee how you would
go from C to A and B-plus to A? Be specific.
[The information referred to follows:]
Dr. Whitley. In the Defense Healthcare Reform hearing on February
23, 2016, Senator Graham requested from the witnesses a three or four-
page report to the committee on how to reform TRICARE from a C to A
grade. This response provides comments on how to grade TRICARE, why it
currently gets such a low grade, and options for improving TRICARE's
grade.
How to Grade TRICARE
It is relatively straight forward to identify the outcomes we want
from the TRICARE program and assess its performance for these outcomes.
The outcomes include choice, network size and quality, access, and
healthcare quality from the beneficiary perspective; and utilization
management, care coordination, and cost control from the perspective of
DOD and the taxpayer. My written statement submitted for the hearing
provides an assessment of TRICARE with respect to many of these
outcomes and in many cases the results indicate poor program
performance.
Assessment of these outcomes by themselves, however, doesn't
provide insights on how to reform the program. To understand program
reform, assessment must be based on key program design attributes.
There are three basic attributes for the design of the TRICARE
contracting relationship between DOD and the contractor that will
largely determine how well the program performs:
Competitiveness: How many carriers/contractors compete
and have an opportunity to provide services to beneficiaries in a
location. This is a key to incentivizing carriers/contractors to focus
on the preferences of beneficiaries.
Risk-bearing: How much financial risk do carriers/
contractors bear. This is a key to incentivizing the carriers/
contractors to aggressively manage cost and improve outcomes.
Flexibility: How much flexibility do risk-bearing
carriers/contractors have to compete and evolve their suite of tools as
the market changes and conditions vary across markets.
Grading the TRICARE contracts can be accomplished by evaluating
them on these three attributes.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Why TRICARE's Grade is So Low
TRICARE earns a low grade because it relies on five-year winner-
take-all contracts that are largely pass through from the perspective
of the contractor (administrative services only) and do not allow for
or encourage value-based purchasing (VBP) of healthcare by the
contractor. In other words, TRICARE gets a very low score on each of
the three key attributes identified above. Some specific points of
further elaboration on these program design flaws include:
1. TRICARE contracting is based on pass-through (non-risk bearing)
contracting for procedures instead of purchasing a benefit for an
individual with a risk-bearing contract: TRICARE should not be built on
the purchase of individual procedures or visits; it should be built on
the purchase of a benefit for the individual or family. This is
essential for ensuring that care is coordinated, utilization is
managed, and health outcomes are promoted--key outcomes of interest. In
addition, the purchase of this benefit must transfer risk to the
contractor. The healthcare sector is rapidly evolving, and a focus of a
reformed TRICARE should be on the incentives being provided to the
contractors to adopt and further innovate in their use of these VBP
tools to promote the key outcomes of interest. Insurance carriers focus
on these problems every day and are professional managers of
healthcare. DOD should leverage their expertise and put it to work on
behalf of military beneficiaries.
2. TRICARE cost control strategies are based on costs per
procedures instead of the total cost for the value received: One
unfortunate impact of pass-through fee-for-service (FFS) contracting is
that it focuses attention on per-procedure costs while distracting
attention from, and providing few tools to manage, utilization and
total cost. DOD's system is anchored in its use of Medicare
reimbursement rates for procedures, and TRICARE often contracts for
procedures at 20 percent or more below commercial rates. This has
become an overriding focus in DOD and a primary measure by which reform
alternatives are evaluated (i.e., a key evaluation criterion is often
whether it raises per-procedure rates). Non-risk bearing FFS models,
however, can incentivize increased utilization that may not be
clinically necessary, and in DOD utilization rates are 30-40 percent
higher than demographically similar comparison groups. Despite paying
less per procedure, DOD pays more in total per beneficiary.
The healthcare sector is increasing its focus on total cost and
the value received for the amount paid. To take a common example (taken
specifically from interviews conducted in Alexandria, Louisiana), a
particular market may have several orthopedic surgeons performing total
knee replacements. The best surgeons may charge higher rates for the
surgery (there is higher demand for their services) but may also have
lower costs for the entire episode of care (driven by lower failure
rates, quicker healing rates, shorter physical therapy requirements,
etc.). Private insurers will observe this difference and be willing to
pay the higher surgical rate, incentivizing their patients to use the
more expensive surgeons. This cannot be done in the TRICARE system;
regardless of health outcomes and total cost, the surgeons with the
lowest per-procedure cost will be the only ones allowed. The focus on
procedure rates drives other perverse results as well, e.g., narrow
networks and poor access. Expanding DOD's focus from controlling per
unit input prices to focusing on total cost and experience of care is
part of a cultural change that is hard for any bureaucracy.
3. TRICARE contracts are long-lived and winner-take-all instead of
competitive evergreen contracts: TRICARE uses winner-take-all (one
successful contractor per region) five-year (often extended) contracts.
The process by which TRICARE's contracts are awarded is complicated,
prolonged, and characterized by protests and delays, increasing
TRICARE's costs. More importantly, the lack of competition and multi-
year duration of contracts limits TRICARE's ability to innovate and
keep pace with healthcare trends and advances. Most other public sector
healthcare programs use competitive, annual (sometimes known as
evergreen) contracts, e.g., Medicare Part C, Medicare Part D, and
Federal Employees Health Benefits Program (FEHBP). Large, multi-year,
winner-take-all contracts can appear simple at first and may be
attractive for this reason, but TRICARE experience demonstrates
otherwise.
These challenges are fundamental to the design of the current
TRICARE program. Minor tweaks of the program such as retaining the
five-year, winner-take-all pass through structure but directing VBP
instead of FFS purchasing will not substantively change the result.
Each of the structural flaws should be addressed as part of TRICARE
reform because the flaws are interconnected--fixing one element without
the others can leave the program performing just as poorly as it
currently does.
Options for Improving TRICARE's Grade
The healthcare sector is adopting VBP methods to promote health
outcomes, improve utilization management, better coordinate care, and
control cost. TRICARE reform should be informed by these trends but, as
stated above, simply directing VBP within the existing TRICARE program
structure is not modernization of the program.
Most large civilian federal healthcare programs have dealt with
these issues in the past and their experience provides examples for how
DOD might improve its program design and performance. Three
particularly relevant examples are:
Medicare Part C (Medicare Advantage): A health insurance
program that serves as a substitute for ``traditional'' Medicare (Parts
A and B). Each year, plans submit ``bids'' (per enrollee cost) to cover
the standard Medicare Parts A and B benefits. Every plan that meets
specified requirements is accepted. The bids are compared to formula
benchmarks that establish the maximum amount Medicare will pay a plan
in a given area. Plan's with bids higher than the benchmark are
permitted (enrollees pay the difference as a monthly premium). Plans
that bid below the benchmark split the difference between the bid and
the benchmark (government savings is one share and the other share is
used to provide additional benefits or reduced costs to enrollees). The
government maintains direct authority to specify the minimum benefit
provided.
Medicare Part D (pharmacy benefit): The pharmacy benefit
in Medicare. Each year, plans submit bids to provide a pharmacy benefit
meeting minimum benefit requirements. The national average of the bids
is then used to develop a government subsidy amount and monthly
premiums for beneficiaries.
Federal Employees Health Benefit Program (FEHBP): The
health benefit program for federal civilian employees. Health insurers
submit their plans each year, the plans must meet minimum requirements
set by the government but can vary significantly over benefits above
the minimum and cost-shares. Beneficiaries choose their plan in each
year's open season.
All three programs use annual contracts, have multiple winners per
location, allow beneficiary choice across the multiple winners, pass
financial risk to the contractor, and allow flexibility to the
contractor for how to purchase and manage care. They all score
significantly higher than TRICARE on competition, risk bearing, and
flexibility and provide examples of how TRICARE reform can be
implemented.
There are multiple ways that TRICARE reform could be implemented to
improve competition, risk bearing, and flexibility. Some options
achieve high levels of each attribute, while others make incremental
progress but do not move TRICARE all the way to a high grade. Some have
gradations within them that could be used to increase or decrease
performance in a given attribute. Specific examples include:
TRICARE ``Advantage'': A reform similar to Medicare Part
C could be introduced that allows for alternative capitated plans to be
offered from which beneficiaries could choose (beneficiaries could also
choose to remain in ``traditional'' TRICARE). This could be done in all
markets, or could be introduced in pilot form in selected markets. A
more limited approach would direct the incumbent contractor to offer a
capitated alternative more similar to what they offer in their civilian
practices, a more expansive approach would allow multiple plans to be
introduced in a market that compete with each other.
Contractor Markets: Each TRICARE contractor could be
directed to administer the TRICARE plans, creating their own
contractor-operated market places within their regions. The set of
plans could be similar to today's plans (a preferred-provider network
style plan and a health maintenance organization style plan) or could
be expanded to include a wider range of plans. Ideally contractors
would be paid on a per plan basis (risk bearing), providing improved
incentives for efficient utilization management.
TRICARE ``Choice'': The best performance would be
achieved by implementing the full MCRMC TRICARE Choice proposal (along
with a premium support cost-share structure). A more limited pilot
approach that would move in this direction would be to open FEHBP to
TRICARE beneficiaries as an option (either in a limited number of
markets as a pilot or in all markets), although this would be costly to
DOD given the older population in FEHBP.
Some related issues that should be considered in designing a
TRICARE reform proposal include:
Overhead: TRICARE overhead costs are substantial. For
example, FEHBP (which covers a population similar in size to TRICARE)
is administered with approximately 100 people (which are funded from
premiums). The number of personnel administering TRICARE are
significantly higher (exact figures are difficult to compute but likely
number in the thousands). The slower the reform is implemented, the
longer these high overhead costs have to be paid. The MCRMC recommended
moving at once to this alternative to avoid paying overhead for two
distinct program designs and for improved incentives. Slower
transitions are an option, but it must be understood that this reduces
the available savings.
Cost-Shares: Setting cost-shares is an important
decision, but one that can be separated from TRICARE reform. In most of
the options described above, cost-shares could largely be maintained at
their current level or changed without effecting reform implementation.
In some examples (e.g., options similar to Medicare Part C), the entire
range of cost-shares can be set by policy. In other examples (e.g., the
options similar to FEHBP), the premium cost-share can be easily set at
any level desired (using a premium support mechanism, for example)
while copayment cost shares would be determined in the market place.
Senator Gillibrand?
Senator Gillibrand. Thank you, Mr. Chairman, and thank you
all for being here.
Our country has a shortage of mental health providers
resulting in many patients receiving mental health care from
their primary provider. What do you see as the solution to this
problem? Mr. McIntyre, specifically how does TriWest ensure
that mental health providers in its network have experience
with unique needs and experience with servicemembers and their
dependents, including military children? Last, does TRICARE
require this type of experience?
Mr. McIntyre. I will start. We no longer do the work in
TRICARE, which was probably partly why I am here because I do
not have a conflict in that regard.
When we did that, we built out a mental health network that
was mapped to the needs of the population, both those that are
close to a military installation but also those that served in
the Guard and Reserve, mapped to ZIP [Zone Improvement Plan]
codes where they reside.
What we currently do is relevant to that topic, and that is
we are doing exactly the same thing, and we are looking at the
ZIP codes as to where people live. We are looking at what the
direct care system actually has in the way of footprint, which
I believe is applicable to the DOD, and we are in the process
of going back to something that we did at the start of the
wars, and that is to train the mental health providers and the
primary care providers in how do you recognize where a threat
is for your patient from a mental health perspective, how do
you be relevant, and where do you turn people to if they are in
distress.
Senator Gillibrand. Others?
Dr. Fendrick. I would just say very quickly that if we
really were serious about changing our conversation from how
much we spend to how well we spend, we would see a serious
investment in infrastructure for mental health and also incent
providers and patients to do those evidence-based services.
Senator Gillibrand. What infrastructure changes would you
make?
Dr. Fendrick. The problem is that most medical services
that are most profitable are not producing a lot of health for
the money you spend, and as long as you continue to allow a
fee-for-service payment system, they will go to those services
that produce lots of revenue. They have never been measured on
the health that has been produced, which are points made by
folks to the right and left of me. I think if we again get to
this point and you say I am going to still pay a lot of money
for military health care but insist that it goes to services
and providers for things that are actually needed, so whether
it be mental health, opioid abuse, or other types of things
that are away from the standard cardiology, orthopedic surgeon,
other types of things that are needed but deemed to be overused
in the system--we have enough money there. It just takes the
courage to make the shifts that may be going upstream against
some interests who may not want that to happen.
Dr. Loftus. I would add that integrating mental health care
into primary care is actually important. I do not mean that
mental health care is provided solely by primary care
physicians, but breaking down the barriers in referral and in
sharing information about patients with behavioral health
problems is actually important. There are great privacy
concerns about behavioral health, but when primary care
physicians and others treating the same patients are not aware
of those issues, we cannot bring to bear all of the power of
the entire multi-specialty power that we have in front of us to
the care of those mental health patients.
Dr. Whitley. I have nothing to add. I agree with all my
colleagues. I think they said it very well.
Senator Gillibrand. Another major concern is the care for
servicemembers' special needs dependents, which I mentioned in
my opening. Military families move frequently and that means
that moving to and from locations with different levels of
service provision.
From your private sector experience, how do we ensure that
the continuity of care for these special needs are met whenever
servicemembers might be moved? Mr. McIntyre, how does TriWest
handle provision of this specialized service?
Mr. McIntyre. I think that is a fundamental question in
this space. The thing that Captain Faison and myself learned at
the time--then-Captain Faison--through the lens of the Marine
Corps was you need to come to understand what the needs are and
you need to pay attention to them and meet them while they are
in your midst, and then you need to prepare and plan for their
change geographically so that as they move from place to place,
you are actually thinking about not only them moving forward
but the receipt of them on the other side. The same thing
applies, I would say, to those that are injured and those that
have mental health needs as they move within the system in the
military and as they also move between the military and the VA.
The last thing I would say, if I can go back for a second
to the mental health piece that you raised previously. Very few
providers in this country are trained in evidence-based
therapies. We have a network of 25,000 mental health providers
now built across 28 States. We are in the process of looking at
that issue market by market. We are doing a test in Phoenix
actually this weekend. We are doing something together with the
private community as well as those that serve in the Federal
space.
The bottom line is it is possible to go through and do that
training. The expertise of it exists in the DOD and the VA
spaces. It is getting those that bring those networks to the
table to narrow in on the populations that need services, how
many there are, what types of EBTs [Emotional Brain Training]
you need, and then make the investments to actually ensure that
they are trained. We are going to be testing that in the
chairman's hometown of Phoenix, Arizona starting this weekend.
Senator Graham. With that, Senator McCain.
Chairman McCain. Dr. Whitley, I am very interested in your
recommendations, one of them, MTF management layers should be
reduced. Are you talking about one service?
Dr. Whitley. I think there are many options to do that. One
option that others have talked about is consolidating the
military hospital system into the existing Defense Health
Agency. Another would be a single service. I think there are
many options of ways you get there, Senator.
Chairman McCain. Would you do me a favor and send that to
me in writing?
Dr. Whitley. I would be very happy to, sir.
[The information referred to follows:]
Dr. Whitley. In the Defense Healthcare Reform hearing on February
23, 2016, Senator McCain requested a written response on options for
consolidating and improving the management of military hospitals. This
response provides options for consolidating management of these
hospitals, additional options for reforming the management of the
hospitals, implementation considerations for military hospital reform,
and an appendix that summarizes some of the current challenges with
military hospitals from my written testimony submitted at the hearing.
Options for Consolidating Military Hospitals
Many of the current challenges with military hospitals discussed in
the appendix (e.g., funding inputs instead of outputs and lack of
competition) would be directly addressed or would be more easily
addressed with a consolidation of the military treatment facility (MTF)
system. This section discusses two aspects of consolidation: the
organization/management of MTFs and their funding.
The direct care system is actually four separate systems, three
systems separately managed by each Military Department and one
additional system (the National Capital Region) managed by the Defense
Health Agency (DHA). This results in a duplication of overhead
functions which increases costs and makes other reforms of MTFs more
difficult. In addition, there are many geographic markets with multiple
facilities (from different Services) within them and rationalizing this
expensive infrastructure footprint is difficult in the current
structure. A system of multi-Service market management has been
established, but has not yet been able to effectively deal with this
challenge. Consolidation of the organization and management of MTFs
would reduce overhead, improve asset and care coordination within
markets, and make other reforms easier to implement.
There is another important benefit from consolidating the direct
care system. Many of the problems identified in the appendix stem from
the confusion created by the inter-weaving of the readiness and benefit
missions. If MTFs were combined and managed separately from the
readiness function, this would help improve the focus on medical
readiness within the Services by removing the conflicting priority they
face. Instead of facing incentivizes to protect a large asset base, the
Surgeons General would be incentivized to focus on their core mission
of maintaining readiness for war.
The typical way such a consolidation would be handled within the
DOD structure is with an Agency or Field Activity. Examples of how this
has been done in the past include consolidation of finance and
accounting services in the Defense Finance and Accounting Service
(DFAS), supply and logistical functions in the Defense Logistics
Agency, the commissaries in the Defense Commissary Agency (DeCA), and
information technology in the Defense Information Systems Agency. The
logical choice for MTFs would be the already existing Defense Health
Agency (DHA). Alternative options include placement within a military
command (e.g., the maintenance depots, although these are Service
specific) or creation of a new military Service (e.g., the German
medical Service). Disadvantages of these two alternatives are that they
mis-match the function with the structure, running hospitals is a
commercial activity and military command structures are better suited
for military essential functions.
Most of the examples mentioned above (finance and accounting
services, supply functions, information technology, and depot
maintenance) are consolidated in another way. In addition to their
organization and management they are consolidated into a commercially
oriented funding account. The current Defense Health Program (DHP)
appropriation structure contributes to the challenges we face today.
The DHP includes the consolidated operations and maintenance and
procurement funding for the MTFs (a good start), but the funding is
promptly divided across the Services in execution and not managed
jointly. The DHP also consolidates a large portion of the funding for
the readiness mission and largely leaves this inappropriate bundling in
place as the funding is passed to the Services. The impact of this on
resource allocation decision making includes:
Healthcare benefits and medical readiness are put into a
direct tradespace with each other, competing for resources against each
other. Decision makers are forced to make tradeoffs between increasing
medical readiness at the expense of the health benefit or vice versa,
with no direct considerations of readiness more broadly or compensation
more broadly.
Medical readiness is removed from the tradespace of other
readiness functions within each Service so that the Services cannot
easily create a balanced readiness plan across medical and non-medical
functions.
Healthcare benefits are removed from the tradespace of
compensation instruments (e.g., base pay, special and incentive pays,
retirement, and quality of life programs) so that compensation cannot
be easily understood and balanced across the range of compensation
instruments.
Unified resource management of MTFs is not achieved.
Consolidating the organization of the MTFs would provide an
opportunity to consolidate and reform MTF funding (and reform funding
for the entire Military Health System). Basic principles of funding and
budgetary account structure include:
Costs of personnel benefits should reside in MILPERS
budget accounts.
Costs of readiness should appear in Service readiness-
related budget accounts.
MTFs and other activities replicating commercial
activities should be funded according to outputs produced, not inputs
consumed.
Costs should be recognized in the budget when the
obligation is incurred.
MTFs are the last large support function in DOD that are still
funded with an appropriated budget for inputs instead of for the
outputs they produce. One way to consolidate MTF funding and improve
incentives by funding for outputs is by placing them in a revolving
fund. Another approach used for commissaries is a non-appropriated fund
instrumentalities, which establishes them as a fiscal entity. Another,
overlapping, option would be to convert the MTFs to government-owned,
contractor-operated (GOCO) organizations with the contractor's payments
based on healthcare delivered.
Reforming the Management of Military Hospitals
Consolidating organization/management and funding of MTFs would
make a wide range of other, some inter-related, reforms easier.
Examples of these additional reforms include:
MTFs should be professionally managed: Organizing and
operating MTFs like military units when the majority of the daily
operations are the provision of beneficiary healthcare with little
difference from civilian hospitals is inefficient. It fails to take
advantage of the expertise resident in the healthcare sector at running
medical facilities. A simple incremental step that could be taken as
part of TRICARE reform is directing that a group of MTFs be placed
under civilian management (e.g., as GOCO facilities) on a trial basis.
MTFs should face competition: Competition is the ultimate
disciplining force in markets, and lack of competition is a primary
driver of inefficiency. Ensuring that the MTFs face competition for
beneficiaries and care delivery would focus them on improvement. It
should also be noted that this does not threaten readiness. The care
the MTFs are primarily delivering and that would be at risk of moving
to the private sector if the MTFs failed to effectively compete is
obstetrics and other areas of beneficiary care that are not readiness
related. In areas where DOD has invested in developing world-class
readiness capabilities (e.g., burns and orthopedic rehabilitation in
San Antonio), DOD should have no trouble competing for patients.
MTFs that cannot succeed in their mission should be
downsized or closed: Many MTFs today are not providing sufficient
workload of the required case mix to support their readiness mission.
For many of these, there is no reasonable or practical way to get the
right workload into the facility and, thus, the facility will not be
able to succeed in its mission. These facilities should be transitioned
to clinics or closed.
Implementation Considerations for Military Hospital Reform
Consolidating the organization and funding of MTFs, and reforming
their management, are major reforms that would require careful
attention in implementation. Some examples of implementation
considerations that will need to be addressed include:
Strategic Plan for the Direct Care System: The number of
MTFs with inpatient capacity has fallen by about a half since the end
of the cold war. This change, however, was not analytically pre-
planned; instead it was often the result of a struggle between some
attempting to protect as much infrastructure as possible while Congress
and DOD's leadership attempted to impose fiscal reality. Better results
will be achieved if DOD could develop a plan identifying the direct
care system mission, what its core infrastructure needs actually are,
and how it plans to transition from the current state to the future
state. Past efforts at this have not been rigorously implemented within
DOD (e.g., labor and delivery care identified as a key element of
readiness), so rigorous Congressional oversight of the plan development
would be required.
Leadership: Most defense agencies replicating civilian
functions are civilian led, e.g., DFAS and DeCA (along with combat
support agencies like the National Geospatial-Intelligence Agency). The
DHA, perhaps inappropriately, has military leadership. Properly
realigning leadership structure can be challenging (e.g., transitioning
DeCA leadership from military to civilian), so it is valuable to get it
right from the beginning.
Private Sector Management: Considerations for the
implementation of professional management that may include
Congressional assistance include:
How to effectively manage the transition of existing
government civilian staff.
Information technology inter-connectivity within the
government and between the government and contractor.
Establishing standards for accreditation and
consistency across the system.
Establishing realistic transition timelines that
allow, for example, hiring the best personnel.
Transparency and provision of data (e.g., providing 18
months of historic workload data to ensure full information about the
market).
Selection criteria for priority facilities include
facility age and condition, individual product lines, community size,
and community integration.
Isolated Locations: Reforming MTFs in isolated locations
(e.g., Ft. Irwin and Mountain Home) is a community integration issue,
not a DOD infrastructure issue. The goal is market optimization across
civilian and military populations, not stove-piped consideration of
military infrastructure.
Appendix: Military Hospital Challenges
The Military Health System (MHS) combines two primary missions. The
operational or readiness mission is to provide medical care during
wartime or other deployed contingencies. The beneficiary care mission
is to provide a high quality healthcare benefit to military families
and retirees. A core challenge of the MHS today is that these two
missions continue to grow increasingly different from each other. \1\
---------------------------------------------------------------------------
\1\ The written testimony submitted of John Whitley for the hearing
provides a more detailed discussion of this trend.
---------------------------------------------------------------------------
The MHS direct care system includes over 50 inpatient military
hospitals and over 300 outpatient clinics. These Military Treatment
Facilities (MTFs) sit at the intersection of the two primary MHS
missions, they are supposed to serve as a skill maintenance venue of
military medical personnel for the readiness mission by providing
beneficiary healthcare. The increasing divergence of these two missions
is making it increasingly difficult for the MTFs as currently organized
and managed to fill this role. This puts MTF commanders in an almost
impossible situation and creates a climate of confusion within the MHS
that affects everything from staffing decisions to major investment
decision making. Some simple examples of the confusion include:
Emergency Medicine: Emergency medicine physicians had one
of the highest physician deployment rates to Iraq and Afghanistan. \2\
Some MTFs have the Emergency Department staffed with contracted
civilian physicians while pediatrics and obstetrics are mostly
military.
---------------------------------------------------------------------------
\2\ Whitley et al., ``Medical Total Force Management.'' See Figure
2, p. 32.
---------------------------------------------------------------------------
Outsourcing Surgical Workload: Surgical workload is
generally more relevant for maintaining the clinical skills of the
military medical force, but MTFs generally outsource this workload to
private sector care while retaining in house more care in areas like
obstetrics. Table 1 illustrates this for three DOD markets, and it can
be seen that obstetric workload is generally kept in house at over
twice the rate of surgical workload.
Table 1.--Surgical versus Obstetric Workload Mix
----------------------------------------------------------------------------------------------------------------
Surgical Workload Obstetric Workload
-----------------------------------------------------------------------------------
Market Military Purchased Military Purchased
Hospital Care % Military Hospital Care % Military
----------------------------------------------------------------------------------------------------------------
Las Vegas, Nevada........... 1,315 4,749 22% 582 651 47%
Pensacola, Florida.......... 657 5,403 11% 368 888 29%
Ft. Polk, Louisiana......... 192 203 49% 409 24 94%
----------------------------------------------------------------------------------------------------------------
Graduate Medical Education (GME) Programs: The direct
care system supports DOD-run GME or residency programs, but there is
little attempt to focus these on operationally required specialty areas
like trauma, surgery, emergency medicine, etc.
This confusion is an important driver of excessive costs in the
MHS. The direct care system is expensive to operate, with the average
MTF costing about 50 percent more to deliver inpatient care than it
would cost to purchase that care in the local markets at current
payment rates. \3\ Table 2 illustrates this cost difference for three
markets in which DOD operates. \4\
---------------------------------------------------------------------------
\3\ See Philip Lurie, ``Comparing the Costs of Military Treatment
Facilities with Private Sector Care,'' IDA P-5262 (Alexandria, VA:
Institute for Defense Analyses, 2016) (forthcoming). See Table 6, p.
27.
\4\ Inpatient care is used for illustrative purposes. Comparisons
of outpatient care yield similar results.
Table 2.--Military Hospital Inpatient Costs versus Private Sector Care
----------------------------------------------------------------------------------------------------------------
Inpatient Military Cost of Purchasing Care
Market Hospital Cost in Local Market
----------------------------------------------------------------------------------------------------------------
Nellis Air Force Base, Nevada............................... $34,624,144 $29,909,465
Naval Air Station Pensacola, Florida........................ $31,180,755 $13,747,915
Ft. Polk, Louisiana......................................... $14,727,029 $6,604,439
----------------------------------------------------------------------------------------------------------------
Source: Lurie, ``Comparing the Costs of Military Treatment Facilities with Private Sector Care.''
When the direct care system is successfully delivering its
readiness mission, i.e., providing readiness training for the military
medical force, this excess cost may be justified--a necessary cost for
ensuring our warfighting capability. In cases in which the direct care
system is not succeeding in its mission, this excess cost is a source
of inefficiency in the MHS--wasting taxpayer resources that could be
used to increase compensation or reallocated elsewhere in the defense
budget for mission delivery.
DOD recently conducted an extensive internal study of the direct
care system, finding that many MTFs did not have economically viable
inpatient capacity and should be right-sized to the workload they can
effectively support. This study, the MHS Modernization Study, was not
able to directly assess the degree to which MTFs were meeting the
readiness mission and instead focused on workload in major specialty
areas. Although imperfect, this workload analysis provided a valuable
``lower bound'' measure for the readiness question--a hospital that
does not have enough workload in a particular specialty area to
maintain an economically viable capacity does not have enough workload
to maintain the readiness of military providers in that area.
These challenges have caused a specific set of management problems
in the direct care system:
Direct care system run as military units: MTFs are led
and administered as military units and justified by their readiness
mission. In actual practice they are almost exclusively focused on
beneficiary healthcare delivery. This misalignment of leadership and
administrative structure with actual operations and functions means
that the wealth of experience in civilian healthcare at running
effective and efficient hospitals is not applied to MTFs. Professional
business management of these large complex businesses is not used.
MTFs don't have to directly compete for business: Private
hospitals that cannot manage themselves effectively lose business and
either get better or go bankrupt. MTFs are protected from this
disciplining force of markets by simply being given bigger budgets to
account for their inefficiency and attempts are made to coerce
beneficiaries that choose to go elsewhere to return to the system. \5\
---------------------------------------------------------------------------
\5\ See, for example, Amy Bushatz, ``Families Forced to Give Up
Civilian Health Care,'' June 27, 2014. http://www.military.com/daily-
news/2014/06/27/some-families-forced-to-give-up-civilian-health-
care.html.
---------------------------------------------------------------------------
MTFs given a budget for inputs instead of paid for
outputs: Funding large DOD support missions that approximate commercial
activities with direct appropriation for their inputs instead of on a
reimbursable basis for outputs produced is a funding mechanism long ago
abandoned in most other large support mission areas, e.g., logistics,
financial services, and information services. MTFs still receive their
funding according to the inputs they consume instead of the outputs
they produce.
MTFs overuse military personnel for non-operational
specialties: The military medical force is overstaffed in beneficiary
care areas like pediatrics and obstetrics. Military personnel are
generally more costly than civilian personnel, so the unnecessary use
of military personnel for delivery of beneficiary care is inefficient
and drives higher costs.
Chairman McCain. You also say that MTFs should be
professionally managed. Does that mean you contract out to a
management group? Is that what you are saying?
Dr. Whitley. I think that should be an option that is on
the table and used in appropriate situations, Senator.
Chairman McCain. Does that mean like in a pilot program?
Would you recommend a pilot program where we contracted out for
a non-military associated organization to conduct some of these
functions?
Dr. Whitley. I would add, Senator, I think that should
definitely be an option to consider. I would add that there are
outpatient clinics that are operated that way today within the
direct care system. Then I would add that----
Chairman McCain. How is that working?
Dr. Whitley. My understanding is that the beneficiaries
that use them are very pleased. I think the next panel can talk
about their experiences with that from a management
perspective.
Chairman McCain. MTFs should face competition. This is
pretty much along the same line of what we are talking about.
Dr. Whitley. Yes, Senator. I mean, the best way to motivate
people to improve is to make sure that they know they are not
the only game in town.
Chairman McCain. How do you do that? The same way? A pilot
program?
Dr. Whitley. Yes, sir. You could take specific markets and
you could allow beneficiaries to choose among plans or choose
between venues for where they are going to receive their care.
It would be interesting to see what happens in those pilots. It
would be interesting to see where the beneficiaries choose to
go. It would be interesting to see what happens to costs in
those markets, what happens to outcomes in those markets.
Chairman McCain. For example, who would be the option?
Dr. Whitley. I am sorry, Senator.
Chairman McCain. You say there would be other options that
they would pursue. What would those options be?
Dr. Whitley. Civilian provision of the health care,
Senator.
Chairman McCain. Would that be in a private hospital or a
private provider or a private insurer?
Dr. Whitley. I mean, all of the above. They could decide
where to go for their primary care--that would be a primary
care practice--where to go for their acute care. Yes, Senator.
Chairman McCain. MTFs that cannot succeed in their mission
should be downsized or closed. Has there ever been an MTF
downsized or closed?
Dr. Whitley. There have been many, Senator. The direct care
system is about half the size it was about 25 years ago.
Chairman McCain. Twenty-five years ago, one was----
Dr. Whitley. It is about half the size. We are at about 55,
56, ballpark, bedded facilities, and we were close to 100
probably 20 years ago, Senator. Our folks coming in the second
panel would have the numbers better than I would.
Chairman McCain. To some degree, I think what you are
talking about overall is competition.
Dr. Whitley. Yes, Senator.
Chairman McCain. Right now there is none?
Dr. Whitley. There is some, and it manifests itself in
various ways. I think it could be made much more explicit and
it could be made much more of an effective tool for managing
and for improving outcomes and the cost control in the system.
Yes, Senator.
Chairman McCain. Well, Mr. Chairman, I wonder if we ought
to look at some of these recommendations at least as pilot
programs as a beginning.
Finally, Dr. Whitley, do you think we should have a one-
service medical corps or should we maintain three or four
separate ones?
Dr. Whitley. I have to apologize, Senator. I am going to
punt on that. I am willing to take a stand on competition. I
have never personally studied the joint question. I have to
punt on that one, Senator.
Chairman McCain. Does each service not have a medical
staff?
Dr. Whitley. Yes, sir, they do.
Chairman McCain. Thank you, Mr. Chairman.
Senator Graham. Senator Tillis?
Senator Tillis. Thank you, Mr. Chairman. Thank you all for
being here.
Dr. Fendrick, I want to ask you a question. You in your
testimony, both written and what you delivered before the
committee, talked about value-based insurance design. That is
something I got involved with down in North Carolina as a
matter of public policy when I was speaker.
I want to talk a little bit more about that and how you
think maybe State health plans that have done it, to the extent
that you can and any member of the panel, have benefited from
it.
If you could--it may not be related, but in the briefing
materials, one thing that jumps out at me--and I would be
interested in any of the panelists' opinions on this--are the
discharge. The medical health system average annual inpatient
discharges per 1,000 are some 61.7 for enrollees in the medical
health plans and about 36. There seems to be a really big gap.
Do you think that V-BID helps narrow that gap, or are there
legitimate reasons why the gap is so great?
Dr. Fendrick. I will first take the first half of the
question about what is going on in the States, and maybe my
fellow panelists can chime in about the level of optimism that
V-BID might have to be part of the solution of this very
important hospitalization problem.
First off, I think you pointed out that V-BID programs have
reduced financial barriers to high-value services and providers
in many of the States represented by this panel. I think it is
important to point out that in the State of South Carolina, the
Medicaid program has reduced cost-sharing for high-value drugs
for the most vulnerable populations there. As Senator
Gillibrand pointed out, the Empire State has highlighted V-BID
in the State's innovation plan and its very important role in
the State innovation $100 million grant model. It is also
highlighted in the Maine State innovation plan and is a very
important part of the private sector Maine Business Coalition
there.
You pointed out and we are very proud of the fact that V-
BID plans are now offered to State employees in 13 States,
including North Carolina. Of note, one voluntary V-BID plan was
taken up by over 98 percent of State employees, and after 2
years, we saw marked increases in healthy behaviors, increases
in preventive screenings, much clearly delineated consumer
satisfaction. The good news is we are seeing emergency room
visits and specialty visits decline.
I do not have information on hospitalizations because you
know they tend to occur in a very compressed portion of the
population. Those are often the people we are focused on more
often and why we were so pleased to see a bipartisan, bicameral
political support for a V-BID demonstration in Medicare
Advantage, and we hope to be able study rigorously a V-BID
program to actually lead to the reduction in re-admissions that
you mentioned.
I think over the long term, we will see modest impacts on
ER visits and hospitalizations, but I think much more
importantly, you will be able to tell your constituents and the
American taxpayers that the American health care financial
situation is moving not to things that make people money but
are finally moving in a very systemic way to services that make
them healthier.
Mr. McIntyre. I would agree that providing incentives and
direction for value-based incentives is the right thing to be
doing.
You know, the thing that is interesting about TRICARE and
about the DOD system is that not all the care is provided in
one domain. That makes it uniquely challenging. The chairman of
the full committee is not here at this juncture, but the Air
Force went through a pretty massive re-footprinting process
back at the beginning of TRICARE about 20 years ago. It did an
amazing job of re-footprinting its installations. I think some
focus on the question of what the sizing and the structure
ought to look like and then what do you actually have to
supplement it with to give elasticity from a provider
perspective and then what types of providers and systems do you
want. If you are going to have an integrated system that is in
the private sector in a certain market, how do you plug that
in? Because some of those delivery systems--their models really
need to take care of the entire patient not just part of the
patient's needs.
What I would also offer is that some of the prototypes of
design that have been done over the last 20 years are worthy of
exploration and assessment. There may be some new prototypes
that need to be done, but I think there is probably a lot that
has already been tested. Figuring out what its application
might look like to end up making change as you go forward from
here would be smart.
I will tell you I am particularly intrigued with the notion
that you take the Defense Department for a population that it
has need for and you take the VA for a population that it has
need for, and in the same community, you are melding that
together. There is a series of prototypes that have been in
place for almost 20 years now that do that in different ways in
about eight different markets. The Chicago approach kind of
threads it all together. Then how do you bring the third leg to
the stool?
Then you could go out to Gerald Champion in New Mexico.
When Senator Domenici was a Senator here, there actually was a
prototype that actually took a small community hospital in an
Air Force location and actually took the airmen and put them in
that hospital, took the VA folks, had them in that hospital
delivering services in that environment doing operations there.
Then the private sector was the third leg of the stool. It was
the only prototype that was ever done like that.
You know the incentives in communities that are smaller or
on their own--they ought not to be doing everything
themselves--offers some real interesting assessment. I think
you might find that there is a lot of fodder already there to
step back and say how do we do this right. What are we missing
in models, or do we have most of them already tested? How do we
footprint forward with the right kind of make/buy requirements
of folks before they start doing design and construction?
Senator Tillis. Thank you, Mr. McIntyre. I think that was a
great model.
Dr. Loftus, I am out of time. A part of what I was going to
lead to is how would a high-performing health care system like
Kaiser Permanente kind of play into that integrated solution. I
think that that is a model that we have got to look at and
develop, as Chairman McCain said, maybe through pilots. I do
believe that helps us. I serve on the Veterans Committee. It is
a very important topic. I think it is a way to target a lot of
the needs in certain areas of the country.
Mr. Chair, the only comment I wanted to make--it may be
something I bring up in the next panel, but there is just one
more detail level thing I wanted to get on the record. Senator
Gillibrand, I think this is something you may have looked at as
well. The ABA treatment for persons with autism and the
proposed rate cut is something that I am concerned with, the
timing of it. I hope that either in this committee or in my
discussions with the panelists outside of this committee that
we go back and maybe be a little bit more methodical. I think
that we may be making a mistake potentially cutting treatment
options down below the national average and produce a bad
outcome for something that I think has been proven to be highly
effective and highly beneficial to those who take advantage of
the treatment.
Thank you.
Senator Gillibrand. Thank you all.
Senator Graham. Thank you. That was excellent.
Next panel, please. Thank you all very much for
participating. It was very helpful.
[Pause.]
Senator Graham. Thank you to the first panel. This is the
second panel, and we will start with Mr. Woodson. I am going to
have to run to another subcommittee hearing. I will turn it
over to Senator Gillibrand, and I will be back as quickly as I
can. Let us go ahead and get started. Mr. Woodson?
STATEMENT OF HONORABLE JONATHAN WOODSON, M.D., ASSISTANT
SECRETARY OF DEFENSE FOR HEALTH AFFAIRS
Dr. Woodson. Chairman Graham, Ranking Member Gillibrand,
members of the committee, thank you for placing the issue of
military health system reform high on your agenda for 2016.
The military health system takes great pride in its
performance in combat medicine over the last 14 years with
greater than 95 percent survival rates for those wounded in
battle. Our ability to prevent disease through exceptional
primary care and preventive medicine services produced equally
historic outcomes in reduction of disease and non-battle
injuries.
The challenges we face in medicine and in national
security, however, continue to evolve and require new
approaches to be prepared for the future.
We have undertaken a number of initiatives to strengthen
the military health system in all facets of its
responsibilities, and they have been organized around six
principal lines of effort, which we have spoken about in
previous testimony. I, therefore, want to encourage that last
year's Military Compensation and Retirement Modernization
Commission reviewed and supported many of the initiatives that
we have already set in motion in the Department. Let me briefly
describe these efforts.
First, we have modernized our management systems with an
enterprise focus. We established the Defense Health Agency that
Vice Admiral Bono leads. The agency is entrusted with providing
common business processes and standards and support of the
military departments and combatant commanders, an approach that
provides greater operational efficiency and ensures joint
solutions to our customers.
We identified multi-service markets and developed 5-year
business plans to promote common solutions and optimize the use
of military treatment facilities while providing required care
to beneficiaries in the purchase care sector.
In addition, we acquired and are now preparing to deploy a
new electronic health record using commercial, off-the-shelf
products. Together with the Surgeons General and Vice Admiral
Bono, we have established an enterprise-wide dashboard to
actively manage our performance in readiness, access to care,
quality, safety, patient satisfaction, and costs. The Defense
Health Agency achieved the milestone of full operating
capability on 1 October 2015 and, in its first 2 years, saved
over $700 million.
Second, we are defining and delivering medical capabilities
and manpower needed in the 21st century. With the services, the
Department has embarked upon a thorough process to define
essential medical capabilities and metrics to monitor
readiness.
Third, as a result of the modernization study, we have
analyzed infrastructure needs and right-sized several military
treatment facilities, as well as made adjustments to move
skilled medical personnel to markets where MTFs can recapture
care, they can maintain their skills and reduce overall costs.
The fourth line of effort is perhaps the main focus of
today's discussion, and that is our plan for reforming TRICARE.
We are appreciative of the input from beneficiaries and service
organizations that in recent testimony have expressed support
for TRICARE. The TRICARE benefit was named as the number one
health plan in the country for customer experience by Temkin in
2015, owing in no small part to the comprehensive coverage and
low cost to our beneficiaries. By the way, we jockeyed for that
position since 2011 with Kaiser Permanente.
We also have heard loud and clear from our beneficiaries
that access to both primary and specialty care needs attention,
particularly in the MTFs. In response, we have implemented a
number of access improvement initiatives last year to open up
more appointments, resolve appointment issues on the first
call. We are improving access to after-hours care, particularly
for child care, whether that is through evening and weekend
clinics, the ability to email providers questions through
secure messaging, the availability of 24/7 nurse advice line
that is integrated with our appointing system, streamlining the
referral process, and implementing an urgent care demonstration
program that Congress requested in last year's Defense
Authorization Act.
Our T-2017 contract will be awarded in 2016 and includes
provisions that further improve the experience of care for our
beneficiaries. The PB-17 proposal provides choice and
incorporates feedback from our stakeholder groups.
The fifth line of effort has been to expand strategic
partnerships with civilian health organizations to enhance our
ability to meet and exceed our responsibilities of readiness,
quality, safety, and satisfaction. Partnerships with
organizations such as the American College of Surgeons and the
Institute for Health Care Improvement are providing tangible
benefits that offer us ways to sustain our trauma system,
improve clinical quality, and achieve our goals as a high
reliability organization.
Finally, the sixth line of effort is focused on global
health engagement where the Department is deeply engaged in
national security threats posed by infectious disease and
building bridges through health care around the world. We have
contributed to the surveillance, prevention, diagnosis, and
treatment strategies to combat well known outbreaks to include
Ebola and now Zika, as well as ongoing efforts to prevent other
outbreaks from occurring.
We entered 2016 confident that the reforms in the military
health system and the health benefit can be further
strengthened through a combination of legislative and
operational reforms. I am grateful for this opportunity to be
here today, and I look forward to your questions.
STATEMENT OF VICE ADMIRAL RAQUEL C. BONO, USN, DIRECTOR OF THE
DEFENSE HEALTH AGENCY
VADM Bono. Chairman Graham, Ranking Member Gillibrand, and
members of the subcommittee, thank you for the opportunity to
appear here today. I am pleased to represent the Defense Health
Agency and explain how the DHA [Defense Health Agency] is
contributing to the modernization of the military health
system.
In November, I was honored to become the Defense Health
Agency's second Director. Only a month earlier, the agency had
reached full operating capability after 2 years of
collaborative work with the Army, Navy, Air Force medical
leaders, and with the Joint Chiefs of Staff that established
the concept of operations for many of the functions of the
agency. Our responsibilities center on supporting the military
departments and the combatant commanders in the execution of
their missions.
The Defense Health Agency was created in the recognition
that most health care delivery is common across the Army, Navy,
and Air Force, what we need, what we buy, what a best practice
entails in both the clinical and administrative environments.
The Defense Health Agency helps bring together common support
functions into a new enterprise-focused organizational
structure. We are able to help Dr. Woodson and the Surgeons
General see and manage across the MHS in a more unified way.
One of the principal ways in which we deliver the support
is through the operation of shared services. Critical
enterprise support activities include TRICARE, pharmacy
operations, health information technology, medical logistics,
public health, medical R&D, education and training, health
facilities, contracting, and budget resources management.
In addition to the ten shared services that have been
implemented, the DHA has also brought in joint activities that
had previously been distributed to the services that acted as
executive agencies. These include the Armed Forces Health
Surveillance Center, the Armed Forces Medical Examiner system,
the DOD Medical Examination Review Board, the Defense Center of
Excellence for Psychological Health and Traumatic Brain Injury,
and the National Museum of Health and Medicine.
The DHA offers value, however, to more than our COCOMs and
services. We serve as a single point of contact for many intra-
agency, interagency, and external industry matters simplifying
the process for our partners and outside colleagues to work
with the Department of Defense in support of a number of
imperatives such as research, global health engagement,
adoption of emerging technologies, health care interoperability
and more.
The existence of the DHA has streamlined engagement with
the Defense Logistics Agency, Defense Information Systems
Agency, and other field agencies. External to the Department,
the DHA provides a single point of contact for operational
matters within the VA, a number of agencies within HHS [Health
and Human Services] to include Centers for Medicare and
Medicaid Services, the Food and Drug Administration, the
Centers for Disease Control and Prevention, Public Health
Service, and more. We have successfully collaborated with the
Justice Department on the prosecution of health care fraud
cases, most recently with highly suspect activities around
compound medications. We work with Treasury, State, and the GSA
on a number of critical functions that directly support our
health care mission.
I would like to focus on one shared service in particular,
the operation of TRICARE, the military's health plan. TRICARE
modernization is part of the MHS modernization plan that Dr.
Woodson just outlined. We have a number of TRICARE initiatives
already underway in 2016. Later this year, we will award the
next round of TRICARE contracts known as T-2017, which is when
health care will become operational under the new contracts. We
are simplifying the contracts, reducing management overhead in
both government and contractor headquarters by moving from
three regions to two regions. We are expanding the means by
which we manage the quality of our networks to ensure they meet
the expectations for quality and safety that we expect for our
beneficiaries whether in the direct system or in a private
sector network.
We also will introduce innovative models for value-based
purchasing in the coming year. My staff, in close collaboration
with the services, is also crafting the contract amendments to
permit TRICARE enrollees to use urgent care centers without
pre-authorization. Our analytics team provides the Department's
civilian, military, and medical leadership at the headquarters
and field level with the ability to assess the enterprise-wide
performance of the military health system using agreed upon
joint measures for readiness, health, quality, safety,
satisfaction, and cost.
The DHA is now an integral and integrated part of the
military health system. We are proud to contribute to the
modernization of the system through joint collaborative
solution and responsible management approach.
I am honored to represent the men and women of the Defense
Health Agency, and I look forward to answering any questions
you may have.
[The prepared statement of Dr. Woodson and Admiral Bono
follows:]
Prepared Statement by Dr. Jonathan Woodson and Admiral Raquel C. Bono
Chairman Graham, Ranking Member Gillibrand and members of the
Committee, I am pleased to discuss the Department of Defense's multi-
year plan for modernizing military medicine in service to the 9.4
million Americans who rely on DOD for the delivery and coordination of
healthcare around the world. I am honored to have Vice Admiral Raquel
Bono, Director of the Defense Health Agency (DHA), join me in
presenting this plan. I am proud to have the Surgeons General of the
Army, Navy, and Air Force also accompany us at today's hearing and
speak to the Service-specific issues for which they are responsible.
I want to thank the leadership of the Committee for placing
military health care reform high on the agenda for action this year.
There are a number of interconnected features of the Military Health
System (MHS) that influence how we are organized, how we deliver and
coordinate care, and how we interact with the broader American health
system.
Over the last two and half years, the MHS has fully embraced an
enterprise management approach to our work. Together with the Service
Medical Departments and the Defense Health Agency, we have crafted
strategies, policies, enterprise support activities, and leadership
development programs that benefit the system as a whole. Our approaches
to access, quality and safety are executed in a collaborative,
interdependent manner. Operationally, where we work together in
deployed environments or in multi-service markets, we increasingly
ensure there is an integrated operating model that facilitates support
to line commanders, to servicemembers and to our patients.
For our beneficiaries, we recognize TRICARE is an essential and
valued piece of that health system. Both military medicine and the US
health system are in a period of profound change driven by new
discoveries, technological advances, and integrated delivery models
aimed at increasing quality and controlling costs. Our proposals for
modernization include both operational actions that we are undertaking
right now, as well as legislative proposals that we have included in
the President's budget.
TRICARE is essential to recruiting and retention and is an integral
part of our overarching strategy for the MHS--the Quadruple Aim: Ensure
Readiness, Improve Health, Improve Healthcare, and Lower Cost.
As we institutionalize the lessons learned from fourteen years of
conflict, and as we implement a series of actions emerging from the
Secretary's Review of the MHS, we must modernize our TRICARE program to
better align with how medicine is delivered in 2016, and how patients
expect to receive timely and high quality care.
DOD is taking a new approach to our reform efforts in 2016 and
2017. We are focused on defining value from the perspective of the
patient. Emerging from the internal MHS Review, we have invested a
great deal of time in understanding and evaluating our performance in
access to care, clinical quality, and efficiency from our perspective
as provider, insurer, and employer. In 2016, we are looking at
healthcare delivery through the patient's lens, and developing systems
and processes that are responsive to their needs.
Our starting point in our modernization plan is the recognition
that TRICARE is a good health benefit that supports an exceptional
group of Americans. Recent testimony by beneficiary organizations to
Congress reinforced the view that TRICARE is one of the most
comprehensive health benefits offered by any employer in the United
States. While valuing the TRICARE benefit, beneficiaries voiced to
Congress and to DOD that they particularly want to see improvements in
access to care. We have heard their concerns--and our reform strategy
upholds the sacred promise we make to those who serve their country and
to their families.
Congress and DOD have expanded eligibility, benefits and services
under TRICARE over the 22 years it has been in existence. The most
notable expansions include: TRICARE For Life--extending TRICARE
benefits as second payer to Medicare for dual-eligible beneficiaries,
TRICARE Prime Remote--offering Prime-like benefits to Active Duty
families when they are stationed far from military installations; and
TRICARE Reserve Select--offering certain Reservists with the
opportunity to enroll in TRICARE with a modest premium payment.
We have tied our MHS modernization plan to our overarching
strategic plan. Our MHS strategy continues to use the Quadruple Aim as
our north star--Improved Readiness, Better Health, Better Care, Lower
Cost. This is the framework I will use to describe the actions underway
and those we have proposed.
the military health system: readiness at the center of our strategy
Over the last decade, the MHS performed superbly in providing
combat casualty care and life-saving treatment, achieving historic
outcomes in saving lives and preventing injuries and illnesses. Lessons
from fourteen years of battlefield medicine, along with transformative
changes in the practice of medicine in the United States, require new
approaches to how we ensure medical readiness and how we best meet the
expectations of our beneficiaries. We are continuously reevaluating and
improving our approach to maintaining the health of the force,
sustaining a ready medical force, and delivering quality healthcare to
our beneficiaries--on the battlefield, on military installations, or in
civilian healthcare settings
The MHS is unique in our national health system. DOD operates a
global system of hospitals, clinics, and health team--both fixed and
deployable--to meet the health needs of our military force, and to
maintain the ability of our MSH to meet the readiness needs of the
force as we continue to assess reform strategies to improve this
primary mission.
When we say ``readiness'' is at the center of our strategy--we
mean: the medical readiness of individual servicemembers, the readiness
of medical forces--and the need to build and sustain the clinical
skills of the entire medical team so they are best prepared for
whatever mission they are called to perform. Readiness also refers to
family readiness. The health and wellness of our military families
affects servicemember readiness in direct and indirect ways. In 2016,
we look at readiness from this broader perspective--with consideration
for the family members' viewpoint of whether our health system supports
their own health goals.
TRICARE directly supports this readiness mission. In 2015, the
Military Compensation and Retirement Modernization Commission (MCRMC)
acknowledged the important role that MTFs have in sustaining the
readiness of our medical forces. We have accepted a number of
recommendations from the MCRMC and have launched a process to identify
the essential medical capabilities needed to support the full spectrum
of military operations.
One of the most important actions that we undertook during the Iraq
and Afghanistan conflicts was the establishment of the Joint Trauma
System (JTS). This system contributed significantly to the MHS' ability
to produce historic survivability rates for those wounded in action,
and accelerated our ability to continuously improve combat casualty
care research, training and practice. JTS will be embedded as an
enterprise-wide system that provides essential support to our combatant
commanders around the world.
Of course, not all MTFs include the full spectrum of medical or
surgical capabilities. This requires that we augment MTF-provided care
by purchasing health services from civilian healthcare networks managed
though the TRICARE program.
In 2016, we plan to expand choices for our beneficiaries--allowing
them the opportunity to more freely seek care from either military or
civilian providers. There are a number of ways by which we can expand
our service offerings. For example, retirees who are Medicare eligible
can receive care in MTFs. Caring for these types of patients helps
ensure military medical provider readiness. Likewise, resource sharing
agreements with the Department of Veterans Affairs allow Veterans to
receive care within MTFs, giving our military medical providers
exposure to a more complex set of patient health needs. Other unique
arrangements, such as civilian access to our Level I Trauma System and
burn center at San Antonio Military Medical Center, ensure that our
providers remain current with best practices in trauma and burn care--
important skills to maintain for military operations. In other external
resource sharing arrangements, military providers obtain admitting
privileges at nearby civilian institutions, where they can provide a
wider range of care for our beneficiaries, also allowing for clinical
skills maintenance.
Although the MHS is an indispensable element of national security,
the TRICARE feature of beneficiary choice also includes the choice of
beneficiaries to receive all of their care from civilian providers. In
some circumstances, this choice is driven by necessity--where
beneficiaries reside in areas not near a military installation. In
other circumstances, beneficiaries simply elect to receive civilian
care even when military medical facilities are nearby. Some military
retirees use other systems of care beyond TRICARE: the health care
afforded to Veterans through the VA, the health insurance product
provided through their employer, or the Medicare program. For those
beneficiaries who elect to receive all of their care from civilian
sources, whether by choice or circumstance, we are interested in
exploring ways to direct beneficiaries to accessible, high quality
providers.
The MHS is a complex web of relationships that extend beyond DOD to
include other federal health partners as well as the civilian
community. This integrated system of care requires relentless attention
to the development of leaders with skills to operate in the joint
environment. We recently reviewed our leadership development programs
and identified the need to better integrate and sequence these
programs. I have directed our leadership team to put together a revised
curriculum for leadership development in the joint environment that
focuses on the development of management skills that further ensure
readiness, improve health, access, and quality and responsibly manage
cost.
mhs modernization: better health
MHS modernization recognizes that our health system can be made
even better; and that the delivery of accessible, high quality care,
matched with exceptional customer service, is part of our mission, not
secondary to it.
Our multi-year modernization plan offers a significant advancement
in how the MHS will be a leader in healthcare delivery and customer
service in the country. Our modernization plan raises customer service
performance levels; improves health; further expands choice; simplifies
the process of getting care and offers additional new ways to access
care; ensures access to the latest healthy technology; helps direct
patients to the highest quality of care; and continues to offer value
at an out-of-pocket cost to our people that is lower than virtually any
health plan in the country.
DOD has already begun its multi-year modernization of the TRICARE
program. First, we will continue our efforts to prioritize health ahead
of healthcare.
TRICARE has always had excellent coverage of important preventive
services--and we're making it better. Most of our preventive services
are available without any cost share. For example, any beneficiary
(Prime / Extra / Standard / TRICARE For Life) can get required
immunizations from any provider, to include retail clinics. We are
going to expand the ease and coverage of even more services in the
coming year, and ensure our preventive services plan is fully aligned
with the Affordable Care Act provisions.
tricare modernization: better care
There are a number of components of health care delivery that are
focused on better care. Access, quality and safety are among the
predominant components in which we will dedicate our energy and
resources in the coming year.
Access--Easier, Patient-Centered. We are overhauling every aspect
of our how our patients get care--whether primary or specialty care.
Our patients deserve high quality care delivered safely and
expeditiously. Yet, we frequently hear about problems accessing health
care within the MHS. In our internal review, we heard that patients are
concerned about being told to call back for an appointment, and
dissatisfied with delays in getting care because of a cumbersome pre-
authorization and referral system.
During the MHS Review, we found that MTFs generally meet defined
access to care standards on average. However, there was a great deal of
variation--there were MTFs that did not meet these standards and others
who consistently performed better than the standard. In 2015, we
incorporated two measures of access into an enterprise-wide,
``Partnership for Improvement'' dashboard, which is reviewed monthly by
me and the other MHS leaders present today.
The same access standards apply to both MTF provided care and
TRICARE Prime care delivered in the private sector. Assessment of
purchased private sector primary care access is largely determined from
patient experience surveys. According to survey data, individuals who
use TRICARE Standard or Extra are more satisfied with the care provided
when compared to those who use TRICARE Prime. In 2016, we will be
exploring beneficiary concerns more deeply by engaging focus groups on
specific subjects.
Recent Congressional testimony from beneficiary groups suggests
that the lower satisfaction with TRICARE Prime is related to the
inability to get an appointment at an MTF and to the associated
referral and authorization processes. NDAA 2016 called for improving
access in the following ways: 1) make it easier for beneficiaries to
move among the identified TRICARE managed care support contract
regions; 2) allow TRICARE Prime beneficiaries access to urgent care
centers without a preauthorization requirement under a pilot project;
and 3) expand the public transparency of quality, safety and
satisfaction information.
We have taken a number of steps to improve access to care. We
implemented ``first call resolution'' policies ensuring that the
appointment or referral will be completed during the initial call for
beneficiaries enrolled to our patient-centered medical homes. I issued
initial guidance for simplified appointing and first call resolution on
June 2, 2015. We have already begun to see the positive effect of these
changes from the patients' perspective. Performance monitoring will
ensure compliance and survey data is letting us know if our
beneficiaries are satisfied with the results.
We are not simply monitoring our performance from this one action.
We have put a number of policy and operational actions into motion
already this year,
The Services and DHA undertook a listening tour to MTFs and with
beneficiaries around the country. We learned a great deal from these
visits. The Services and DHA have identified that peak hours of
physician supply do not always match patient demand. In response, we
are extending hours to evenings and weekends in a number of our MTFs.
We have increased the number of urgent appointment by 32 percent since
May 2015, and we have expanded the overall number of appointments by
more than 11 percent.
Part of our enterprise approach is to effectively use the
demonstration authority that Congress has provided us and pilot new
approaches to patient care delivery. We recognize that patients,
particularly those with complex or chronic medical conditions, require
ongoing services from a mix of primary care and specialty providers. I
am directing demonstration projects in which we evaluate the use of
``integrated practice units (IPUs)'' into our medical homes. The most
important feature of the IPU is that it organizes medical services
around the patient's needs and medical condition rather than organizing
medical services from the health system's perspective.
Contemporary access to healthcare is no longer confined to the four
walls of a doctor's office or dictated by drive time standards.
Instead, information technology offers a variety of opportunities for
patients to engage the medical system. Providers can extend their reach
to treat or advise their patients beyond the clinic's open hours or
without requiring distant travel. Furthermore, many of these modalities
offer new opportunities to support the warfighter wherever they are
deployed. In January 2016, I expanded our policies to encourage greater
use of telehealth, and permit its connection to the patient's home. The
new policy will enhance our abilities to provide telemedicine services
and expand access for our beneficiaries.
In 2014, we established a Nurse Advice Line (NAL) for all of our
beneficiaries. This new capability now fields 1,800 calls per day
(significantly higher than we projected, and higher than most
commercial health plans). Call volumes are increasing each month. Many
patients, after engaging with the NAL, do not subsequently seek
emergency care, but wait to be seen at their Primary Care Medical Home
at the MTF. For those whose symptoms suggest a true emergency, the NAL
activates the emergency medical system and stays on the phone until
help arrives. Additionally, the 24/7 NAL is integrated with our
appointing and referral systems, ensuring beneficiary have round-the-
clock access to healthcare advice and appointing services. We plan to
expand the services offered by the NAL in the next year to increase
convenient access.
The TRICARE program has leveraged web-based technologies to provide
beneficiaries with information, secure ways to enroll for health care
services, review claims, pay bills, and even make appointments.
Patients can communicate with their providers using secure messaging
services and download their medical records using Blue Button
technology. We are ensuring that all primary care providers and most
specialists use and promote the secure messaging capability with their
patients. The new electronic medical record will add even more
functionality for patients.
In 2016, the MHS will begin to deploy smart phone applications that
will make it easy for our patients to contact their providers, access
all of the TRICARE Online capabilities, and find useful information
about the nearest MTF. We will also launch new telehealth capabilities
that will allow providers to consult with their patients using video
technology, along with capabilities for providers to securely monitor
their patients' health remotely (e.g. blood pressure monitoring or
other biometric data).
DOD will also implement a pilot program that allows enrollees to
access urgent care centers without requiring a preauthorization,
consistent with NDAA 2016. I am confident that these additional means
of access--both virtual and physical--will have a significant, positive
affect on satisfaction with accessibility and customer service among
our Prime population.
For patients who receive referrals from their primary care
providers, we are also streamlining referral processes so that patients
will be advised of referral approval in a more timely way.
We are also proposing to allow beneficiaries who live more than one
hour away from an MTF to enroll for care at those facilities. While we
believe that patients should live in close proximity to their primary
care provider, we also believe that patients should be able to choose
their provider, even if the provider is more than an hour's drive away.
However, we will retain contract provisions that require the civilian
network to be constructed in such a way as to ensure easy geographical
access, to the extent possible, for our beneficiaries, using existing
drive time standards.
In our fiscal year 2017 proposed budget, we introduce a new
approach to the DOD health benefit that further simplifies the program
for beneficiaries. Patients would be able to choose between a managed
benefit that prioritizes care in the MTFs (and continues to offer MTF
care at no cost to beneficiaries), and an unmanaged option that
sustains the freedom of choice for beneficiaries to seek civilian care
without restriction.
Our initiatives are intended to ensure retention of our existing
enrollees as well as increase use of military treatment facilities for
all beneficiaries. Our customer service enhancements are intended to
encourage our beneficiaries who live near a military hospital or clinic
to come back to the MTF.
Finally, in 2016, we will also award the TRICARE-2017 (T-2017)
contracts, with healthcare delivery slated to begin in 2017, allowing
for a 12-month transition period between contractors. T-2017 is another
element in our efforts to simply program management, reduce
administrative costs, incentivize value and ensure quality with our
network providers. We have also streamlined processes for portability,
helping ease beneficiary transition as they move from installation to
installation. We will reduce TRICARE regions from three to two,
eliminating unnecessary administrative overhead for both the government
and contractors.
Quality of Care. The MHS is proud of the quality of care we
deliver. The MHS Review found that the MHS performed well along the
quality and safety parameters studied. However, similar to our findings
on access, we found wide variation across MTFs and across safety and
quality measures. Like health systems everywhere, we know we can
improve further. We will.
We have implemented a number of important measures to achieve that
objective. In 2015, we standardized quality and safety measures across
the enterprise and can now compare performance across all MTFs. We are
now amending our TRICARE contracts to establish similar reporting for
private sector care. Senior leaders monitor performance on a monthly
basis.
MTF commanders are being provided with tools to both educate their
staffs and monitor their performance. We are expanding participation in
the American College of Surgeons (ACS) National Surgical Quality
Improvement Program (NSQIP) to all MTFs with surgical capabilities.
This partnership provides these MTFs with insights into improving
surgical mortality and morbidity. In the coming months, we will provide
the Institute for Healthcare Improvement's (IHI) Global Trigger Tool
(GTT) to all MTFs to proactively assist in identifying potential safety
concerns.
When serious chronic illness, medical conditions, special needs or
injuries require a comprehensive coordination of care across multiple
providers, beneficiaries will be assured of a personal case manager who
will assist with coordinating care wherever it is provided--with other
military hospitals, in the civilian sector, or with the VA.
The Department is going to adopt or introduce value-based payment
demonstration projects in 2016. In 2015, we opened discussions with the
Centers for Medicare and Medicaid Services (CMS) to explore how we can
participate in several of the innovative payment reform initiatives
that CMS has introduced over the past several years. By aligning
efforts with other federal initiatives focused on value-based payment,
we can leverage the extensive research that led to these
demonstrations. The complex rules related to payment formulas have been
incorporated into contractor-operated, federal claims processing
systems. Several of the bundled payment demonstration projects--such as
the recent CMS demonstration around bundled payments for joint
replacements--hold the most promise for the populations that we serve.
We will provide the Committee with regular updates on our progress in
this area.
Comprehensive information on service delivery--access, quality,
safety and satisfaction--is available online to the public for the
military health system as a whole with some limited information visible
at the MTF level. Additional information will soon be available at the
MTF, consistent with the direction from the Secretary of Defense and
the NDAA 2016. We have engaged and will continue to engage our military
and veteran beneficiary organizations in how we might present this
information in ways that make the information more relevant and easier
to understand. We encourage our patients to ask us questions about our
quality and safety record, and to engage in questions about their own
plan for health. The DHA is working with CMS to place MHS performance
information on Hospital Compare to provide another outlet where our
performance information will be publicly shared. We are incorporating
beneficiaries into our quality management activities.
The MHS has identified six communities where there is a significant
military medical presence by more than one Service Medical Department.
We refer to these communities as ``multi-service markets.''
Collectively, over 40 percent of all care we deliver in DOD medical
facilities occurs in these markets and an equally significant amount of
care is purchased from the private sector in these markets. We have
provided senior medical leaders in these markets with enhanced
authorities to coordinate service delivery; standardize appointing and
referral policies; and reallocate local resources to best meet
beneficiary needs. We have achieved some early successes in these
markets relative to access to care and patient satisfaction.
These multi-service markets are major deployment platforms, and we
similarly plan to use them as platforms for innovation. They reach
across Service-specific populations and the lessons we learn from
innovating in these markets can be more rapidly shared across the
enterprise.
Health Benefits and Technological Advances--Leaning Forward.
Healthcare is changing fast. With the generous support of Congress,
TRICARE has been made more flexible and more adaptive to the changes in
technology to advance health. DOD now has greater authorities to
approve emerging technologies for coverage. We have already started
this process--for laboratory-developed tests and for other promising
medical procedures. Where the medical evidence is present, we will look
to do more.
We are ensuring that TRICARE's mental health and substance use
disorder benefit meets current standards of care and--like our
preventive services benefits--align with the Affordable Care Act,
Mental Health Parity Act and other federal health legislation. We have
already eliminated the limit on inpatient behavioral health bed days,
and we will finalize policies to ensure parity in other areas in 2016.
One of the most important advances we will introduce in 2016 is the
first phase of deployment of our new Electronic Health Record (EHR) in
the Pacific Northwest. This multi-billion acquisition represents a
major milestone for the Department. Our decision to purchase a
commercial, off-the-shelf product provides DOD with a system that will
support our journey to high reliability, allow ongoing private sector
innovation to be incorporated into future releases, and support our
interoperability objectives in sharing information with both the VA and
with private sector providers. The EHR will also feature an advanced
patient portal, providing our patients with easier access to their own
health data--and improve their ability to manage their care.
Support for Children with Special Needs. Over the last several
years, we have modernized TRICARE and the Extended Care Health Options
(ECHO) program, expanding services to retiree families and eliminating
financial caps on services. We are continuing to improve our complex
case management services, with a particular focus on the unique needs
of military families and frequent relocations.
TRICARE for Reservists. Issues regarding continuity of care, and
continuity of coverage, for Reserve Component families have been raised
by both the Reserve community and in the Military Compensation and
Retirement Modernization Commission report in 2015. Although the
TRICARE Reserve Select program has been well received and offers an
excellent health benefit, the Department continues to explore
opportunities that can accommodate those Reserve members and families
who would prefer to retain their existing provider relationships.
TRICARE Support. In October 2015, the DHA reached Full Operating
Capability. The TRICARE Health Plan is one of the principal enterprise
support activities--or shared services--for which the DHA is
responsible. Working closely with the Service Medical Departments, we
are better able to coordinate policy and operational decisions in
support of TRICARE changes in a more agile and transparent manner. Our
other enterprise support activities--pharmacy operations, health
information technology, medical logistics, health facilities, public
health, medical research and development, medical education and
training, contracting, and budget & resource management--also provide
essential support services to both combatant commanders and the
Services.
I would like to highlight just one element of how this enterprise
support better enabled critical support in a crisis. In 2015, the MHS
witnessed an alarming escalation in prescription drug costs, largely
related to increased utilization of compound medications. The DHA
monitoring system identified potential fraudulent activity; recommended
and concurrently implemented a series of enterprise-wide screening
procedures in our military pharmacies, mail order and retail network
that precipitously and safely reduced inappropriate fills of compound
drug prescriptions; and coordinated with the Department of Justice in
the prosecution of fraudulent actors and the recovery of funds.
Cost--Responsible, Moderate Changes in Beneficiary Cost-Sharing.
The full complement of improvements and services that we have put
forward also requires investment. Most of these additional costs will
be borne by the Department. For example, the implementation of shared
services led the Department to reduce defense health costs by $3.5
billion over five years, savings that have already been decremented
from our proposed budget.
Since TRICARE and then TRICARE For Life were introduced, the
percentage of care delivered in the private sector rather than in DOD
medical facilities has grown. Today, over 60 percent of all DOD-funded
health care is delivered in civilian settings through TRICARE. The
integration of care delivered in military and civilian settings is--and
will remain--a necessary feature of military medicine. We will continue
to assess our partnership with our civilian network and the impact of
its prominence upon our direct care facilities, recognizing cost
efficiencies where possible. Over the last several years, overall
defense health program costs have been well managed, with actual costs
coming in less than projected at the beginning of the year.
Although costs have stabilized in recent years through both
management actions on the part of the Department and a general slowdown
in US healthcare inflation, National Health Expenditure projections, a
product of the Centers for Medicare and Medicaid Services, anticipate a
gradual increase in per capita health care costs to roughly 5 percent
in coming years.
The Department has submitted several reform plans since 2005,
largely to control health care costs. Last year, the submission of the
President's Budget (PB) 2016 benefit reform proposal was relatively
well received. The PB 2017 health benefit reform proposal leverages the
PB 2016 proposal but makes some important adjustments. Following are
the attributes of the PB 2017 proposal.
A simpler system--provides beneficiaries with two care
alternatives and overall less complexity in their health plan. TRICARE
Select is an HMO-like (managed) option that is MTF-centric and TRICARE
Choice is a PPO-like (unmanaged) option offering greater choice at a
modestly higher cost.
Economically emphasizes TRICARE Select leveraging MTFs as
the lowest cost option for care to make full use of Direct Care
capacity and also provides needed workload for military providers for
readiness training.
No change for Active Duty--who would maintain priority
access to health care without any cost sharing but would still require
authorization for civilian care.
Copays--will depend on beneficiary category (excluding
Active Duty) and care venue; it is designed to minimize overutilization
of costly care venues. There would be no copays in MTFs to facilitate
the effective use of military clinics and hospitals and thereby improve
the efficiency of DOD's fixed facility cost structure. There would be
fixed network copays for the TRICARE Choice option without a
deductible.
Participation fee--for retirees (not medically retired),
their families, and survivors of retirees (except survivors of those
who died on Active Duty). They would pay an annual participation fee or
forfeit coverage for the plan year. There is no participation fee for
Active Duty members or their family members. There is a higher
participation fee for those retirees choosing the TRICARE Choice option
($200 higher).
Open season enrollment--similar to most commercial plans,
participants must enroll for a 1-year period of coverage or lose the
opportunity.
Catastrophic caps--which have not gone up in 10 years
would increase slightly but still remain sufficiently low to protect
beneficiaries from financial hardship. The participation fee would no
longer count towards the cap.
Medically retired members and their families and
survivors of those who died on Active Duty would be treated the same as
Active Duty family members (ADFMs), with no participation fee and lower
cost shares.
To ensure equity among ADFMs, the proposal offers all
ADFMs a no cost medical/surgical care option regardless of assignment
location and zero copays for ADFM emergency room use, including in the
network.
The Department will offer a second payer option with a
lower fee for those with other health insurance.
Fees and copays will be indexed at the National Health
Expenditures (NHE) per capita.
There have been no changes to most cost-sharing elements of the
TRICARE Program since it was established in 1994. At the time TRICARE
was introduced, retiree family beneficiary out-of-pocket payments
accounted for approximately 27 percent of total TRICARE health care
costs. Today, retirees and their families only bear 8 percent of the
costs, and our proposal raises that share to 10.5 percent of total
costs. For Active Duty families, the changes are even smaller, moving
out-of-pocket costs from 1.4 percent of total costs to 1.6 percent. By
any measure, these changes are modest, responsible adjustments that
place the Department's health program on a stable, long-term financial
footing and preserve the foundation of the health system and its
platforms for ensuring a medically ready and ready medical force.
We enter 2016 confident that an excellent health benefit can be
further strengthened through a combination of legislative, policy, and
operational reforms. Our health benefit plays an important role in
readiness as well as recruiting and retaining the men and women in
uniform who serve this nation.
The MHS continues to serve as a unique and indispensable national
security asset. It supports our Active Duty force and it retains its
clinical skills through an Active clinical practice in both peace and
war. It offers a ready asset to respond to humanitarian assistance
needs and disaster response. The full complement of preventive, public
health, primary care, specialty and specialty care services that we
offer are necessary components for meeting the national security
obligations of the United States.
Our health benefit must continue to ensure a ready medical force of
military providers and support staff able to deploy anywhere, anytime
with skills that support combatant commander requirements; provide
access, choice and value of the health care benefit, and be fiscally
sustainable for the Department.
The MHS reforms we have outlined today will help us meet the
appropriately high expectations that beneficiaries have for us. Service
members, military retirees and their families are right to expect
affordable, accessible quality health care is available to them from
both military or civilian providers, wherever they reside. We are
committed to increasing value from their vantage point.
Our proposal represents a balanced, comprehensive package of
reforms that are directly aligned with and address each element of our
Quadruple Aim. We have initiatives that will improve readiness, improve
health, improve care, and lower cost. We look forward to working with
you over the coming months to further refine and articulate our
objectives in a manner that improves value for everyone--our
warfighters, our combatant commanders, our patients, our medical force,
and the American taxpayer.
Thank you for inviting the Surgeons General, Admiral Bono and me
here today to speak with you about the essential linkage between our
readiness mission and our health benefit, and about our plans to
further improve benefits and services for the long term.
STATEMENT OF LIEUTENANT GENERAL NADJA Y. WEST, USA, SURGEON
GENERAL OF THE ARMY AND COMMANDING GENERAL U.S. ARMY MEDICAL
COMMAND
LTG West. Chairman Graham, Ranking Member Gillibrand, and
distinguished members of the subcommittee, thank you for this
opportunity to provide the Army Medicine's perspective on
defense health care reform.
It is an honor, first I would like to say, to serve as the
Army Surgeon General and Commanding General of the U.S. Army
Medical Command.
Since 1775, Army medicine has supported our Nation and our
Army whenever and wherever needed. However, today I would like
to focus on our more recent history.
For the past 14 years, we have supported an all-volunteer
force engaged across the globe and supporting the joint
campaign fighting in Iraq and Afghanistan and responding to
national disasters and other contingencies such as the U.S.
Government response to the Ebola outbreak in West Africa. We
have accomplished this while continuing to attract, educate,
and train the next generation of Army medicine. We are
collecting what we have learned over the past 14 years and
ensuring that we are using these lessons to inform our daily
efforts and how we prepare for the future.
Our readiness to serve when needed is my number one
priority. In assuring our readiness, Army medicine must
maintain medical capabilities that are ready to deploy and
support our warfighters.
During the past 14 years of combat operations, we have
achieved a survivability rate, as you heard Dr. Woodson
mention, of 92 percent, the highest in the history of warfare
despite the changing tactics of our adversaries and the
increasing severity of battle injuries. We are not going to
lose the knowledge and the best practices that helped us
achieve the survivability rate. These advances in combat
casualty care resulted from our integrated health services that
span the continuum of care from prevention to treatment of
illness and injury and to recovery and rehabilitation in both
the garrison and the operational environments.
We cannot, however, focus exclusively on sustainment of
combat trauma, surgery, and burn capabilities. Our experience
shows that the Army must be agile and adaptable and therefore
must maintain a broad range of medical capabilities to support
the full range of military requirements.
To that end, we see our medical centers, hospitals, and
clinics as health and readiness platforms. They ensure we
maintain trained and ready medical personnel by exposing them
to a diverse and broad range of patients with a wide variety of
illnesses and injuries.
Our medical centers also serve as platforms for our Army
graduate medical education programs. These programs are the
primary means for transferring the knowledge from this
generation of military providers to the next. While we focus on
our readiness mission, we must also ensure we provide our
soldiers, their families, and our retired population with
access to high-quality health care that meets their needs and
encourages health.
Improving access to care is a priority for Army medicine,
and I have directed actions to rapidly improve access to care.
First, we will enable our beneficiaries to book an
appointment up to 6 months in advance, and we have already
piloted that at some of our installations. Womack Army Medical
Center is one example. We will increase the number of available
appointments by increasing the time our providers are available
to see patients and reducing the number of unfilled
appointments and also working on the no-show rate, which leaves
a large number of our appointments unfilled and unutilized.
Additionally, we are opening three new community-based
medical homes and we will evaluate where after-hour or urgent
care clinics are necessary.
As part of the health services enterprise, we will also
continue to expand our telehealth program. We are currently
conducting a pilot to treat low acuity patients in the
emergency department at Fort Campbell as one example. We are
also expanding remote health monitoring programs and leaning
forward to expand our telehealth to the home. I would like to
thank Dr. Woodson for recently signing the policy to help us
expand that facility to home telehealth initiative.
I understand reforms are necessary to ensure the long-term
sustainability of TRICARE. However, reforms must not increase
the financial burden on our Active Duty soldiers or their
Active Duty family members and must minimize any impact to our
retired population. Reforms should encourage beneficiary use of
our direct care system to ensure our medical military skills
are maintained and should also encourage healthy behaviors, as
you have heard our colleagues mention previously.
Reforms must not degrade our combat-tested system or
readiness in an environment where we must remain rotationally
focused and surge ready as the next large-scale deployment
could be tomorrow. General Milley states that the Army's
fundamental task is like no other. It is to win in the
unforgiving crucible of ground combat.
Now, Army medicine does not literally fight wars. I
understand this. We are, however, a critical enable to ensure
our Army achieves this end. Our Nation's mothers and fathers
know that when their sons or daughters become ill or injured,
we are there, we are ready, and this gives them the confidence
to send them into harm's way if called. This is a truly sacred
trust, and our readiness to support the warfighter can never,
will never be in doubt.
I want to thank you all for your continued support to our
soldiers and to military medicine, and I look forward to your
questions. Thank you.
[The prepared statement of General West follows:]
Prepared Statement by General Nadja Y. West
Chairman Graham, Ranking Member Gillibrand, and distinguished
members of the subcommittee, thank you for this opportunity to provide
Army Medicine's perspective on defense health care reform and to
discuss our efforts to improve Army Medicine. Army Medicine's clear
objective remains to enable the readiness of our Army. We do so by
ensuring our soldiers, past and present, and their Families receive the
care they need while continuing to improve access and quality of health
care for all beneficiaries.
No other health care organization could have accomplished what Army
Medicine has done since 2001. For the past 14 years we have supported
an All-Volunteer force fighting the wars in Iraq and Afghanistan,
responded to natural disasters across the globe, and deployed to other
contingencies such as the US Government response to the Ebola outbreak
in West Africa. While caring for soldiers and their Families we
continued to embrace our retirees and veterans and ensured their
pressing healthcare needs were met; even at the height of the wars.
We do not rest on our laurels and today we must address the need
for healthcare reform to ensure we maintain the lessons learned over
the past 14 years and prepare for tomorrow's conflicts while continuing
to provide a sustainable healthcare benefit to all who have earned it.
We owe it to our soldiers and their Families to ensure any changes to
the military health benefit honor their sacrifices and preserve the
long-term viability of the All-Volunteer Force.
readiness
The global security environment continues to degrade and to place
high demands on the United States Army. The Army must be prepared to
confront near-peer competitors abroad, defend the Homeland, and respond
to a wide range of crises, ranging from peacekeeping to disaster relief
and humanitarian assistance. Throughout last year, the Army committed
approximately 190,000 soldiers to over 140 countries and to Homeland
defense to advance our national security interests.
The Army derives its power from the collective strength of its
soldiers. Our soldiers are our primary weapon systems and ensuring they
remain medically ready, trained, and prepared to deploy is our number
one priority. Therefore, Army Medicine has a two-fold readiness
mission. We must ensure soldiers are medically ready to deploy while
maintaining medical forces, complete with trained personnel and
equipment, to deploy and support our Nation's Army.
During the past 14 years of combat operations, our trained and
ready medical providers contributed to a survivability rate of 92
percent, the highest in the history of warfare, despite the increasing
severity of battle injuries. These advances in combat casualty care
resulted from our integrated system of health that spans the continuum
of care from the battlefield to our inpatient hospitals in the United
States.
However, it would be a mistake to focus exclusively on sustainment
of combat trauma, surgery and burn capabilities. Our experience shows
that the Army must maintain a broad range of medical capabilities to
support the full range of military requirements. From 2001 to 2015,
only 16 percent of those evacuated from Iraq and 21 percent of those
evacuated from Afghanistan were injured in battle. The remaining
Service members were evacuated for disease or non-battle injuries.
Similarly, greater than 95 percent of those that received care and
remained in theater were treated for disease and non-battle injuries
rather than combat injuries.
The 2014 deployment of over 2,500 personnel to support Operation
United Assistance in Liberia demonstrated the value of non-trauma
related medical specialties and the importance of force health
protection in deployed environments where a major threat to our
soldiers is infectious disease rather than armed combatants. The
geographically endemic medical risks to our forces in support of the
rebalance to Asia and continued operations in Africa point to the
continued need to remain ready to utilize the entire spectrum of Army
medicine in the execution of all manner of military contingency
operations.
Our medical centers, hospitals and clinics are our health and
readiness platforms. They ensure we maintain trained and ready medical
personnel. Our large medical centers serve as specialized training
centers for our medical teams to provide care and clinical research for
complex battle injury and illness. Our medical centers are complemented
by a variety of military treatment facility types, from ambulatory
clinics to community hospitals, to ensure our medical force is capable
of providing primary and routine specialty care in the myriad of
settings and conditions faced around the world. These facilities must
be capable of providing a broad range of patients with a wide variety
of illnesses and injuries.
Our medical centers also serve as platforms for our Army Graduate
Medical Education (GME) programs that are critical to develop trained
and ready medical personnel. GME programs are vital to our ability to
recruit and retain highly skilled medical providers. Army GME is the
largest GME platform in the DOD and supplies more than 90 percent of
all staff Medical Corps (MC) Officers for the Army. Our GME programs
have nearly 1,500 trainees in 149 programs across 10 Army Health and
Readiness platforms. Civilian GME programs do not have the capacity to
absorb our interns, residents, and fellows. Our GME programs continue
to lead the nation in training. The first time board certification pass
rate of 95 percent across Army GME exceeds the 87 percent national
rate. Agile GME program management assures ongoing alignment of
training slots with deployment and readiness requirements.
Reducing our beneficiary population to only Active Duty will result
in an inability to sustain our GME programs due to lack of teaching
cases and exposure to the wide breadth of disease within each specialty
necessary to support any residency training program. Of the current
1.34 million beneficiaries enrolled to Army Medicine, 66 percent are
non-Active Duty Service Members (ADSMs). Excluding behavioral
healthcare, 80 percent of our total inpatient workload and 70 percent
of our high-acuity inpatient workload is for Family members, Retirees
and other non-ADSMs. Additionally, non-ADSMs comprise 50 percent of
total outpatient care, and 53 percent of our general surgery cases. The
Active Duty population at most Army installations, comprised mostly of
healthy young adults, is insufficient to maintain an inpatient
hospital. Therefore, nearly all of our 22 inpatient MTFs would need to
transition to outpatient clinics. Even at the largest Army
installations, the case mix presented by a young, relatively healthy
Active Duty population would be insufficient to maintain the medical
skills of our providers.
Beyond trained physicians, our deployable Combat Support Hospitals
and Forward Surgical Teams require trained allied health professionals,
nurses, OR [Operating Room] techs, lab techs, and other specialties
that operate as teams and maintain their skills in our MTFs. The loss
of inpatient capability would pose significant risk to the maintenance
of their skills and directly impact the readiness of our operating
force medical units. Training, once lost, cannot be replaced.
The Army recognizes the need to maintain the skills learned over 14
years of war to ensure these capabilities do not atrophy, while also
ensuring that we maintain the full scope of medical capabilities needed
to be flexible and adaptable to all future globally integrated
operations. In conjunction with my fellow Service Surgeons General and
the Joint Staff Surgeon, my staff is working to identify, define,
categorize and prioritize the medical capabilities required to support
future conflicts and contingencies. Readiness measures will be
developed and reported in systems of record, such as the Digital
Training Management System (DTMS) and the Defense Readiness Reporting
System-Army (DRRS-A).
health benefit reform
TRICARE is an excellent benefit tailored to support our
beneficiaries and their unique needs and situations. However, most
agree that change is necessary to ensure the long-term sustainability
of the program and to improve performance. I support the TRICARE
reforms proposed in the Fiscal Year 2017 President's Budget.
Reforms should inspire beneficiaries to return back to our direct
care system and military run medical facilities. I believe the best
place for them to receive care is in our military treatment facilities
where we understand their needs, can manage and document their care,
ensure quality, and can ensure their readiness.
Reforms should incentivize health and healthy lifestyles. This is
key to long-term cost control.
We must ensure our beneficiaries have access to high quality, safe
healthcare in our MTFs and in the TRICARE network. To this end, we must
increase transparency and exchange of data between both healthcare
systems.
Reforms must not increase the financial burden on Active Duty
soldiers or Active Duty family members. Any increased financial burden
on retirees must be modest and not inhibit them seeking necessary
medical care in our facilities.
Reform also provides the opportunity to identify and close gaps in
the benefit. In some cases legislation established benefits for Active
Duty but excluded similar benefits for Retirees or Family Members. In
other cases, civilian insurance programs now provide benefit coverage
for new or emerging technologies and treatment modalities not yet
covered by TRICARE. TRICARE should be one of the most comprehensive
health plans in the country and exceed all benchmarks under the
Affordable Care Act. Our beneficiaries deserve nothing less.
improving access
Improving access to care remains a priority for Army Medicine.
Specifically, our beneficiaries expect better acute care access. While
we have made significant improvements in access, 21 percent improved
since 2014, we are still not meeting our beneficiaries' expectations.
Therefore, I have directed actions to radically improve access to
primary care in our MTFs. I have established a goal of creating 260,000
(4 percent) more primary care visits above the 6.1 million visits we
provided in fiscal year 2015 and 119,000 (1.5 percent) more specialty
care visits above the 7.9 million we visits provide in fiscal year
2015.
We are standardizing processes across our enterprise to continue to
drive improvement with access. Last year, Army Medicine instituted a
first call resolution policy to ensure all enrolled beneficiaries
receive a direct care appointment or network authorization on their
first call. In addition, Army Medicine implemented a simplified
appointing policy to reduce the types of primary care appointments from
12 to 5, with the vast majority of these being 24 hour acute
appointments and future or follow-up appointments.
Army Medicine continues to expand our off-installation healthcare
program by placing Community Based Medical Homes (CBMH) in communities
surrounding our military installations closer to where our
beneficiaries live and work. Today over 10 percent of our enrolled
beneficiaries receive their primary care in a CBMH, many of which have
extended hours and offer behavioral health, physical therapy, and
prescription refill services. We currently have 20 CBMHs supporting 13
installations. In fiscal year 2016, we will open three (3) more CBMHs
at 3 installations and in fiscal year 2017, we will open two (2) more
CBMHs and our first open access acute care clinic in San Antonio.
To further improve access for routine care and specialty care, I
have directed my staff to evaluate the feasibility of opening
appointments beyond the current six-week template to six (6) months or
more. This will allow beneficiaries to depart at the conclusion of
their appointment with follow-ups booked in advance without the need to
call back in the future. Additionally, we are also conducting a
comprehensive assessment across our installations to determine where
expansion of clinic hours or establishment of Urgent Care Clinics is
necessary.
We are partnering with the Navy, Air Force, Defense Health Agency,
VA and other institutions to improve access as well. In San Antonio the
Army will lease and outfit a CBMH that the Air Force will staff and
run. We are also hiring civilian physical therapist and technicians to
work in Air Force facilities. In Puget Sound the Army is hiring medical
providers to work in Navy facilities. The Army is providing analytics
and finance & accounting support to the National Capital Region Medical
Directorate under the Defense Health Agency. We are providing staffing
and analytic support to the enhanced Multi-Service Markets.
Army Medicine will continue to seek opportunities to leverage
technology to enhance access for our beneficiaries. In fiscal year
2015, Army Telehealth (TH) provided over 40,000 provider-patient
encounters and provider-to-provider consultations across 18 time zones
in 30 specialties over 30 countries and territories including the
operational environment.
In fiscal year 2016, Army Medicine will initiate a pilot to utilize
TH to assist with overused Emergency Departments (ED). This pilot will
utilize primary care physicians from Fort Gordon to treat patients with
low acuity at Fort Campbell. This will allow the ED physicians to
concentrate their efforts on patients with higher acuity and should
drive down ED wait times.
The true promise of TH lies in the potential to reach patients in
their homes. On February 3, 2016, the Assistant Secretary of Defense
for Health Affairs signed a memorandum authorizing TH to a patient's
home. We are leaning forward to develop implementation guidance to
execute expansion of TH to the home.
improving quality and safety
Since 1775, Army Medicine has been a reliable capability for our
Nation, our Army and all those entrusted to our care. Army Medicine, in
2012, began working to implement the tenets of the ``High Reliability
Organization'' (HRO) to continue to evolve our understanding of patient
safety. In 2015, we established the Deputy Chief of Staff for Quality
and Safety to align all quality, patient safety, and organizational
environmental and equipment safety elements within the same
directorate. This alignment provides a synergistic environment to take
advantage of analysis of problem areas and best practices across the
full spectrum of quality and safety from within the command and in
consultation with external experts and leaders.
Army Medicine is collaborating with The Joint Commission to pilot
an assessment to gauge the HRO maturity of four Army MTFs. The team
completed three assessments in 2015, and one in January 2016.
Army Medicine is increasing its participation in the American
College of Surgeons' National Surgical Quality Improvement Program
(NSQIP) to reduce surgical complications, improve outcomes, and improve
patient satisfaction. Currently, nine (9) Army MTFs participate in
NSQIP. By the end of 2016, all 22 Army MTFs with surgical services will
participate in NSQIP. In 2015, Dwight D. Eisenhower Army Medical Center
at Fort Gordon, GA was recognized by the American College of Surgeons
as a top NSQIP performer and deemed ``Meritorious'' with regard to
their composite quality score.
To drive further improvement, MEDCOM will design, develop and
implement a Quality and Safety Center to more effectively use patient
safety data, improve sharing of lessons learned across the MEDCOM, and
increase transparency and availability of quality and safety
information available to our leaders, staff, and beneficiaries. This
center will be established in coordination with the Army Combat
Readiness Center and will leverage many of the successful practices
incorporated by the CRC.
improving performance
Since 2010, Army Medicine has maintained relatively stable
enrollment of 1.4 million beneficiaries despite significant budget and
personnel turbulence. As we improve access, quality, and safety, Army
Medicine is also improving performance to maximize value. From fiscal
year 2011 to fiscal year 2015, our operations and maintenance budget
decreased from $7.6 billion to $7.0 billion. After reaching a high of
over 43,648 civilian personnel in January 2013, MEDCOM lost 5,140
civilian personnel due to the furlough and hiring freeze in 2013 and
2014. MEDCOM civilian end strength has slowly risen back to our
authorized civilian end strength of 40,583 that we require for mission
accomplishment. DOD imposed constraints on the number of staff we can
employ is a limitation to our capacity and, therefore, to our ability
to improve access.
Army Medicine is driving performance improvement at the MTF through
the use of an innovative financial incentive model and performance
based resourcing called the Integrated Resourcing and Incentive System
(IRIS). IRIS aligns resources, funding and incentives to enhance MTF
value production and adjusts resources based on actual performance
compared to MTF business plans. IRIS financially rewards high-
performance and incorporates quality measures through financial
incentives to the facility for achievement in Evidence Based Practice
standards, data quality, patient satisfaction, and continuity of
enrollee primary care encounters.
streamlining structure
Army Medicine continues to evaluate its headquarters structure to
ensure it is properly sized and aligned to support the Army. In Fall
2013, the AMEDD Futures Task Force was established to review the MEDCOM
headquarters structure and provide recommendations on how to best
balance and align the headquarters structure. The Task Force
recommended a flattened and more integrated structure that is
geographically aligned to support the Army. The Secretary of the Army
approved this reorganization on 27 April 15 and MEDCOM initiated its
transformation on 8 July 2015.
By the end of the two year implementation in fiscal year 2017, the
MEDCOM will transform from 20 to 14 subordinate Command HQs. This 30
percent reduction of headquarters will reduce our administrative
overhead structure to less than 4.2 percent of MEDCOM's total
requirements and authorizations. We will transform from fifteen
functional regional command HQs to four multi-disciplinary Regional
Health Commands (RHCs) by merging regional headquarters for public
health and dental into the RHCs to create a single point of
accountability for Health Readiness that is strategically aligned with
the Army's operational force headquarters and units. Finally, we will
transition the headquarters for the Public Health Command, Warrior
Transition Command, and Dental Command to elevate and integrate them
into key staff on the MEDCOM headquarters.
Simultaneously, a work group was established to review the
executive leadership within our MTFs. The results of this study led to
an executive leadership model borrowed from the US Navy, the AMEDD
Health Executive Leadership Organization Structure (HELOS), which was
approved for implementation on 12 Jun 15. The model standardizes the
leadership structure for medical centers, large hospitals, small
hospitals, and clinics. It provides increased leadership opportunities
at the deputy level and enhances oversight of quality, safety, the
patient experience, staff development, and productivity within all
MTFs. The new leadership positions will provide additional
opportunities to groom future hospital and medical center commanders.
The endstate will be more experienced leaders who are more accountable.
conclusion
Army Medicine is one of the finest health care systems in the
world. As the military health care reform discussion continues we must
remain focused on maintaining readiness while continuing to improve the
health of all those entrusted to our care. While our system has proven
very successful over the last 14 years of supporting the Warfighter, we
need to continue to improve and evolve it to meet the changing needs of
our Nation's Army. No other health organization is required to provide,
nor is capable of providing, the full spectrum of care from point of
injury or illness on a battlefield through rehabilitative care while
continuing to maintain high quality care in garrison environments for
its beneficiaries. There is more we can do to improve readiness,
enhance the benefit and ensure fiscal sustainability within our
existing authorities. We remain fully committed to work with Congress,
DOD, and all those entrusted to our care to improve our system.
I want to thank my partners in the DOD, the VA, my colleagues here
on the panel and the Congress for your continued support.
STATEMENT OF LIEUTENANT GENERAL MARK A. EDIGER, USAF, SURGEON
GENERAL OF THE AIR FORCE
Lt. Gen. Ediger. Chairman Graham, Ranking Member
Gillibrand, and distinguished members of the committee. Thank
you for the opportunity to come before you today to discuss the
future of the military health system.
We fully support the committee's work to enhance the focus
on value and delivery of the health benefit to those we serve,
consisting of sustained good health, streamlined patient
experience, readiness of the force we support, and the
readiness of our medical force.
Strong health systems must continuously improve. Changes to
the Air Force performance management process implemented in
2015, as part of the coordinated action plan following the
military health system review, are producing continuous
improvements in safety, quality, and timeliness of care. Recent
evidence includes the joint commission of our hospital at Joint
base Elmendorf-Richardson for outstanding performance on key
quality measures, the Keesler Medical Center's top 10 percent
ranking among all U.S. hospitals participating in HCAHPS
[Hospital Consumer Assessment of Healthcare Providers and
Systems] measures of patient perspectives, and favorable
system-wide performance against national benchmarks in
perinatal outcomes, diabetes management, and well child care.
We know our performance as a health system is integral to our
readiness, and we remain committed to continual improvement.
Today we have 683 medical airmen deployed around the world
providing medical support to contingency operations, including
the trauma team at Craig Joint Theater Hospital in Bagram,
Afghanistan, mobile surgical teams at various sites, and
aeromedical evacuation teams with critical care capability.
Our success in support of deployed operations is
inextricably linked to the care we provide in our hospitals,
our clinics, and our many partner institutions. The bedrock of
our readiness is the military hospital. Of the 76 Air Force
military treatment facilities, only 13 today are hospitals. I
would add that 30 years ago in 1986, we had 73 hospitals. Over
the past 30 years, the Air Force has closed and converted 60
hospitals.
Our capability to meet combatant command requirements with
deployable medical teams hinges primarily on our eight largest
hospitals. The broad scope of care we provide to retired
military members, their families, and veterans is key to our
readiness. The Air Force has a number of agreements with the VA
under which we provide specialty care to veterans. As we
consider changes to the military health system, we believe it
is very important to facilitate retiree access to specialty
care in military hospitals and provide tools enabling more
agreements with the VA and other Federal health systems.
To ensure our readiness, we have evolved to a model in
which Air Force surgeons and critical care specialists devote a
portion of their time to provision of care in partner
institutions, such as VA medical centers and level 1 trauma
centers where more complex care and trauma are prevalent. I
would offer as an example the medical group at Nellis Air Force
Base in Las Vegas where the surgeons on staff at Nellis,
vascular surgeons, orthopedic surgeons, and general surgeons,
do a significant portion of their cases in the VA medical
center in Las Vegas but also at the University Medical Center
in downtown Las Vegas, which is the only level 1 trauma center
for Las Vegas. This provides the needed balance of complex
cases for a proficient, deployable clinician.
An additional key point pertains to primary care support
for Active Duty families. Experience has shown that primary
medical support to Active Duty families from our military
treatment facilities enhances commanders' efforts to support
families under stress and strengthens the resilience of
families. As changes are considered, we strongly recommend
sustaining care for Active Duty families in military treatment
facilities.
I thank the committee for its steadfast support and
dedication to the welfare of the airmen, soldiers, sailors,
marines, their families, and our veterans. Thank you.
[The prepared statement of Lieutenant General Ediger
follows:]
Prepared Statement by Lieutenant General Mark A. Ediger
Chairman Graham, Ranking Member Gillibrand, and distinguished
members of the Committee, thank you for the opportunity to come before
you today, to discuss the future of the Military Health System.
We look forward to supporting the committee's work to enhance the
delivery of the health benefit that is so vitally important to those
who serve and have served our nation. Initiatives to structure health
care delivery around provision of value hold great promise for those we
serve. We fully support the pursuit of streamlining measures to improve
access and the experience of care. For the Military Health System,
value in provision of care equates to better health and performance for
those we serve, as well as readiness of the medical force for mission
support. I will focus my comments today on our strategies to meet the
future needs of the Air Force and Joint Team. I will describe linkages
to our readiness and our support to military operations that we believe
to be important considerations as options are assessed for delivery of
the health benefit. The Military Health System is unique in that its
mission couples direct medical support to military operations around
the globe with delivery of health care. Our care is provided to a very
special population whom we are honored to serve. Today we have 683
medical airmen deployed around the world providing medical support,
even as we provide care and operational support from our 76 military
treatment facilities at Air Force installations. Additionally, Air
Force medical personnel conducted 61 global health projects in 2015,
including a significant role in the U.S. response to the Ebola crisis
in West Africa. Our history has clearly demonstrated that our success
in support of deployed operations is inextricably linked to the care we
provide in our hospitals and clinics. As we embark on change, we
recommend careful assessment of the options that enhance our readiness
and our support to Active Duty families.
With a focus on the future, the Air Force has published the
Strategic Master Plan and Future Operating Concept for the U.S. Air
Force. These documents reflect a dramatic transformation in
capabilities already in progress. Also, the Joint Staff has published
the Joint Concept for Health Service Support. These documents shape our
strategies in Air Force Medicine to enable a force capable of the
following:
Stabilization of casualties in austere forward locations
with the agility to stabilize during patient movement
Integration of human performance enhancement as part of
the development of airmen
State of the art, highly reliable specialty care with
particular focus on operational health
Precision prevention-focused health services to members
and their families
Continuous linkage of health data across all domains of
medical support during and beyond Active service
Global health response in support of national strategies
In 2015, we saw indications these forecasted requirements are valid
as the scope of counter-terrorism operations shifted medical
requirements in the combatant commands.
Our strategic actions to evolve to these capabilities are mapped
and include four major initiatives currently in progress:
1. Full spectrum readiness in the medical force--incorporating
clinical readiness standards into management of readiness for the
medical force
2. Integrated operational medical support--extending medical
support into the operational environment for missions with special
performance requirements and/or operational health issues. This
includes operations conducted from Air Force installations such as
Integrated Strategic Reconnaissance
3. Trusted Care--application of high reliability principles in Air
Force Medicine focused on the safest, highest quality care
4. Air Force Medical Home--progressive primary care leveraging new
knowledge for precise, timely prevention and teammate-based care for
airmen and their families
There are two key points I wish to make in regard to our readiness.
Both points are relevant when considering potential changes to the
Military Health System. The first point relates to our hospitals and
second relates to our support to Active Duty families.
To sustain a deployable medical force in support of combatant
command requirements, the Air Force uses a variety of tools that
include partnerships with numerous trauma centers and academic medical
institutions. These partnerships have proven valuable and will continue
to move forward, but the bedrock of our readiness is the military
hospital. Of the 76 Air Force military treatment facilities, only 13
are hospitals. This represents a dramatic transformation from the early
1990s, when most Air Force military treatment facilities were
hospitals. This means our capability to meet combatant command
requirements with deployable medical teams hinges on our remaining
hospitals, primarily our eight largest hospitals. Those hospitals are
the primary source for expeditionary Air Force hospitals and critical
care transport teams. Furthermore, these Air Force hospitals are
essential to our disaster response and humanitarian assistance
capability.
Research and innovations in deployed trauma stabilization surgery
and movement of critical care patients originated in military hospitals
and those innovations have advanced standard practices internationally.
In order to keep our medical professionals at these hospitals current
in clinical skills needed to support combat operations and global
health missions, they must provide care in our hospitals to patients
from beyond our Active Duty population.
The readiness of our medical force is significantly dependent on
the care we provide to retired military members, their families and
veterans. The Air Force has a large and growing number of agreements
with the VA under which we provide specialty care to veterans. We have
more readiness-based capacity in specialty care to make available to
retirees and veterans at our hospitals. As we consider changes to the
Military Health System, we believe it is very important to facilitate
retiree access to specialty care in military hospitals and provide
tools to enable more agreements with the VA and other federal health
systems.
My second key point in regard to readiness pertains to primary care
support for Active Duty families. Air Force leadership is committed to
excellent primary care medical support to Active Duty families.
Experience has shown that primary medical support to Active Duty
families from our military treatment facilities enhances commanders'
efforts to support families under stress, and strengthens their
resilience. This is particularly important when the Active Duty member
is deployed. The Air Force Medical Home is our strategic initiative to
provide the best primary care support, and prepare for future
opportunities presented by advancing science in identification and
mitigation of health risk. As changes are considered, we strongly
recommend sustaining care for Active Duty families in military
treatment facilities.
We also know timely access to primary care services for our
population is a priority for the committee. It is a priority we share
and has been a focal point over the past year for coordinated
improvement across the Military Health System. In collaboration with
the Army and Navy, we have implemented policy changes to improve
appointing processes, and implemented a common performance management
dashboard.
In the Air Force, we have implemented changes that have increased
the fill rates for primary care provider positions. We give top
priority to operational health requirements, which requires a
significant portion of dedicated primary care bandwidth. A recent
example is the addition of separation health examinations to support
disability applications by separating Airmen at a rate approaching
3,000 per month. The Air Force performs 80 percent of these
examinations on Airmen while the VA conducts 20 percent. We remain
committed to managing our primary care resources to provide good access
to care while meeting operational health requirements for Airmen. We
are also committed to streamlining referral management processes to
speed the provision of specialty appointments to our patients.
We appreciate this opportunity to describe our initiatives for
meeting the requirements of the rapidly evolving U.S. military
capabilities. We are particularly grateful to discuss the many facets
of our readiness and relevant linkages connected to delivery of the
health benefit. As the committee considers revisions to the Military
Health System, we stand ready to provide information or assist. I thank
the committee for its steadfast support and dedication to the welfare
of the airmen, soldiers, sailors and marines we serve.
STATEMENT OF VICE ADMIRAL C. FORREST FAISON III, USN, SURGEON
GENERAL OF THE NAVY AND CHIEF, BUREAU OF MEDICINE AND SURGERY
VADM Faison. Ranking Member Gillibrand, distinguished
members of the committee, it is my honor to represent the men
and women of Navy medicine, 63,000 dedicated professionals who
every day honor a trust in caring for those who have sacrificed
to defend our freedom. We are grateful for your strong and
unwavering support of our servicemembers and their families.
As you consider potential changes to the military health
system, I thank you for that, but I would like to highlight
important considerations that I believe are central to any
discussions.
Military readiness and combat support are our mission. Navy
medicine protects, promotes, and restores the health of sailors
and marines around the world at home and deployed and in all
warfare domains. We are equally privileged to care for their
families.
In an increasingly complex world, as our Navy and Marine
Corps stand ready and engaged around the globe, Navy medicine
stands there as well to protect and to care for them. As an
agile, rapidly deployable medical force, this is what sets us
apart from civilian health care. No civilian health care
company in the world routinely leaves their families and home
on a moment's notice to willingly go into harm's way to care
for those in need. No health care company in the world daily
puts their lives on the line in battle to defend and care for
their patients, as the young hospital corpsman 2nd class was
privileged to see awarded the Silver Star 2 weeks ago did
without thinking. No health care company in the world
experiences the staff deployments and turnover we routinely
experience and still delivers world-class care. Finally, no
health care company in the world is daily and singularly
focused on the combat readiness of its staff.
The proof is on the battlefield, the highest combat
survival in recorded history. Wounded warriors are alive today
who, in any previous conflict, would have died from their
injuries. They are the testament to the effectiveness of the
military health system because every one of them, from point of
injury on the battlefield to advanced treatment in our medical
centers, received their care from men and women who got their
training, their experience, and their preparation in our
military treatment facilities. Those facilities are the
foundation of battlefield survival. In my opinion, as a former
commander of a deployed expeditionary combat medical facility,
a robust military health system is critical to future
battlefield survival. Unparalleled combat survival in our
Nation's longest conflict is proof that a robust military
health system that also serves as our training and search
platforms for our battlefield providers from corpsman to
physician is essential to both combat survival and agility in
rapidly supporting our deploying operational forces.
These three facts are not in dispute.
One, we have the highest combat survival in recorded
history.
Two, many wounded warriors alive today would have otherwise
died of their injuries in any previous conflict.
Three, every wounded warrior received their care from
injury on the battlefield to recovery in our medical centers
exclusively by men and women who receive their training, their
clinical experience, and preparation in one of our military
treatment facilities. This is a system that works and has
proven itself time and again in the thousands of men and women
alive today.
It is also a system that is not perfect, and I appreciate
your attention to this much needed area of reform and
improvement. The services are working hard to improve access,
care continuity, convenience, and satisfaction with the care
and benefit that we deliver in peacetime. We have made
important strides in each of these areas while concurrently
increasing enrollment, network recapture, staffing
realignments, and other efforts to ensure we provide the
clinical experience our staff needs to preserve skills,
competencies, and ultimately combat survival in the next
conflict.
It is more than just trauma. 70 percent of the evacuations
in the most recent conflict were not trauma-related. Every
single person on our team, every single person wearing a
uniform in the Navy today matched to an operational platform is
assigned to an operational platform. We do not have people in
uniform for peacetime care. All of them have necessary roles
and responsibilities in the next conflict.
More needs to be done, and none of us underestimates the
effort required to improve our peacetime health care services.
We are committed to continuing those necessary reforms which
will improve our patients' experience and, most importantly,
their health. However, we must do so without putting at risk
the very system which has yielded such unprecedented survival.
We will need your help in this effort, and for your tireless
support, I thank you for helping us to ensure that those
sailors and marines who will stand the watch in the future will
have the same or better survival than today's wounded warriors
have had. In our hands is a sacred trust to do all in our power
to return home safely America's sons and daughters who have
sacrificed to defend our freedom. I thank you for helping us to
honor that trust today and tomorrow.
[The prepared statement of Vice Admiral Faison follows:]
Prepared Statement by Vice Admiral C. Forrest Faison III
Chairman Graham, Ranking Member Gillibrand, distinguished Members
of the Committee, thank you for providing me the opportunity to offer
some perspectives on military medicine. All of us recognize that this
Committee has been a strong and unwavering advocate for the men and
women in uniform and we are particularly grateful for your support of
the Military Health System (MHS). As you continue your important
oversight role and deliberate on potential reforms to Defense health
care, I would like to highlight some important considerations which I
believe must remain in the forefront of any discussions.
The President's Budget for fiscal year 2017 contains key TRICARE
proposals which are needed to modernize the Department's health care
program. I support these reform proposals as they will continue to
sustain military readiness, improve beneficiary choice, and improve
access as well as help realize cost savings. In addition, these
initiatives will simplify TRICARE while encouraging the use of military
treatment facilities (MTFs)--vital for medical readiness--and update
beneficiary out-of-pocket costs with modest increases. These proposals
will strengthen the Military Health System (MHS) and support
sustainable health care benefits for all our beneficiaries.
We recognize, however, that the proposed legislative changes must
be complemented by internal changes and institutional reform efforts
within the MHS that allow us to deliver exceptional, more convenient
care to our beneficiaries. We are at a pivotal point. We must
aggressively assess the transformative opportunities presented in
today's environment to provide value-based care, employ technologies
that make good clinical and business sense and eliminate administrative
processes that can negatively impact access to care. The MHS leadership
is committed to making these necessary internal reforms that will
improve beneficiary experience, and more importantly, beneficiary
health.
medical readiness is our mission
Navy Medicine protects, promotes and restores the health of sailors
and marines around the world, ashore and afloat, in all warfare
domains. We exist to support the operational missions of both the Navy
and Marine Corps. These responsibilities require us to be an agile,
rapidly deployable, expeditionary medical force capable of meeting the
demands of crisis response and global maritime security. The Chief of
Naval Operations (CNO) and Commandant of the Marine Corps (CMC) expect
Navy Medicine to keep their sailors and marines healthy, medically
ready to deploy and to deploy with them. They, along with the combatant
commanders, must always be confident in our capability to deliver
world-class care, anytime, anywhere. This obligation to keep our
Nation's servicemembers and their families healthy is both a privilege
and sacred trust earned over years by providing care at sea, on the
battlefield and around the world in our medical centers, hospitals and
clinics.
These demands set us apart from civilian medicine - we are truly a
mission-ready, fully integrated medical system. This capability allows
us to support combat casualty care, working side-by-side with our Army
and Air Force colleagues, with unprecedented battlefield survival
rates, as evidenced over the last 15 years. Our operational agility
also enables us to rapidly meet global health threats as we did in
deploying mobile labs and personnel to Liberia that slashed the Ebola
virus testing time from days to hours. In addition, our hospital ships,
USNS [United States Navy Ship] Mercy and Comfort, are capable of
getting underway quickly for combat support or to support humanitarian
assistance and disaster response efforts here and around the world, as
evidenced by relief efforts in the Gulf Coast following Hurricane
Katrina, Indonesia in the aftermath of the tsunami, and in Haiti
following the devastating earthquake.
our military treatment facilities are the foundation of our readiness
We must recognize that the direct care system--our CONUS
[Contiguous United States] military treatment facilities (MTFs)--are
our most important readiness training platforms. These facilities are
critical to sustaining the vital skills and clinical competencies for
our medical personnel who are saving lives on the battlefield. I cannot
overstate the importance of robust clinical experience to having a
fully trained and ready medical force capable of sustaining
unprecedented survival on the battlefield. From physicians to nurses to
corpsmen, our personnel want to deliver health care and need that
strong clinical experience to sustain and enhance their skills in
preparation for the next deployment. These CONUS MTFs provide important
surge capabilities, while our OCONUS [Outside Contiguous United States]
facilities support our forces operating forward much like our
expeditionary medical capabilities onboard ships.
As a ready medical force, we have a responsibility to ensure we are
as ready for the next mission or conflict. The improved battlefield
survival rates we realized over the last 15 years of war were the
result of highly trained, properly equipped medical personnel from our
MTFs who had the capabilities to rapidly implement combat casualty care
best practices and lessons learned. These outcomes were achieved and
then sustained by the collective hard work by the men and women of
military medicine and the critical resources provided to us by
Congress. Our challenge remains holding these important gains moving
forward.
We are leaning forward to improve the effectiveness and efficiency
of our CONUS MTFs to provide that robust clinical experience to
preserve skills and competencies by moving more workload in-house,
growing our patient enrollment, rebalancing staff and investing in our
graduate training programs. This also has a side benefit of reducing
overall private sector care expenditures. Our implementation of the
Navy CONUS Optimization Plan resulted in the realignment of personnel,
services, and graduate medical education (GME) programs at several of
our MTFs to better sustain the operational readiness skills of our
provider teams and optimize primary and specialty care services for our
patients. I believe the fiscal year 2017 budget proposals will enable
us to continue these efforts since they incent the use of the direct
care system.
Access to care for our beneficiaries is crucial to these efforts.
Integrated and comprehensive primary care delivery is an important
foundation in achieving cost efficient, accessible, and high quality
health care. Nearly all of Navy Medicine's 790,000 MTF enrollees are
receiving care in a National Committee for Quality Assurance (NCQA)-
accredited Medical Home Port (MHP). These patients have seen an
improvement in same-day health care access with their MHP team,
augmented by virtual access via e-mail communications with providers
and access to a 24/7 Nurse Advise Line (NAL) and telehealth.
As a result of this enhanced access, readiness, health outcomes and
patient satisfaction have improved while unnecessary emergency room
usage has decreased. We have expanded this by establishing Marine-
Centered Medical Homes (MCMHs) and Fleet-Centered Medical Homes (FCMHs)
to enhance access and care for our operational forces. These teams also
integrate behavioral and psychological health care providers to improve
medical readiness. We currently have 23 MCMHs and five FCMHs with
efforts under way to expand to additional locations in 2016.
I believe an erosion of our direct care system would have
significant adverse consequences on our ability to sustain medical
force skills and competencies. This will have direct negative impact on
our medical readiness capabilities and also potentially degrade our
ability to recruit and retain our medical professionals. We need to
recognize that comprehensive beneficiary care in our MTFs is directly
linked to skills sustainment of our medical force and, from that,
survival on the battlefield. Our beneficiaries, by agreeing to get
their care in our MTFs, are helping to ensure we save lives on the
battlefield in the next conflict.
medical research and development and medical education are force
multipliers
In addition to the direct care system, investments in education and
training are critical for meeting our current requirements and ensure
that wherever our staff are deployed, they are well prepared. Our GME
programs are among the nations' best and our young corpsmen are
training with medics and airmen at the top-tier Medical Education
Training Campus (METC) in San Antonio.
Cutting-edge R&D [Research & Development] and innovative medical
education are hallmarks of military medicine and directly enable our
readiness mission. Over the years, some of medicine's most important
breakthroughs have come from Navy R&D programs and this work continues
today in our labs around the world. Ongoing research and development
ensures the Navy and Marine Corps force is better protected,
operational tempo is more effectively sustained, and, when needed, the
rehabilitation of our ill and injured is continuously improved. Along
with our MTFs, medical education and research and development are
foundational to our system and form an important triad of excellence
within Navy Medicine. Collectively, these capabilities are vital for
our mission of force health protection.
a rapidly evolving health care landscape
We must recognize the transformation currently underway in health
care. We are witnessing rapid changes in clinical care brought about by
innovations in disease diagnosis and treatment. Advances in areas such
as digital imaging, genetics, precision medicine, pharmaceuticals and
therapeutics are all having significant impact on the delivery and cost
of patient care.
In addition, we know that our patients want convenience and, where
possible, use of virtual technology to support their health care needs.
This is the impact of the millennials on health care and it is not
unique to the military although we are more impacted by it because of
our patient demographics: Based on our most recent available data, 72
percent of enlisted sailors and 85 percent of enlisted Marines are 30
years old or younger. They and their families are very comfortable with
digital technology and expect to incorporate their smart phones and
tablets into their daily health care transactions whenever possible.
Moving forward, traditional portals of care within our direct care
system and the supporting TRICARE networks must be complemented with
innovative and interconnected technological approaches to provide
virtual outreach and care, including handheld device apps and
telehealth.
Our priority must remain the health of the force, their families,
and those we serve. This commitment is not volume-based or supply-
driven. It's a patient-centered and readiness-focused strategy to help
ensure that our servicemembers and their families get the care they
need, when they need it, and in the venue most appropriate and
convenient to get and keep them healthy. I continue to reinforce this
point within Navy Medicine: In order to be the provider of choice for
our beneficiaries and provide that strong clinical experience to
prepare our staff for the next deployment, we must use every
opportunity to enhance patient experience and breakdown any barriers to
convenient, patient-centered care. Much is said about the potential
burden of our patients in navigating the health care system. We take
seriously the trust placed in our hands to provide them the best care
possible. A significant part of that is being their advocate in that
system. We do that best when they are enrolled to us and we have both
the visibility and responsibility for their care in our facilities. We
are working hard to improve that care through our collective efforts in
building the MHS into a high reliability organization (HRO).
In delivering trusted care to our patients, we must never lose
sight that the most important component of Navy Medicine is our people.
We have 63,000 officers, enlisted personnel, government civilians and
contractors serving around the world delivering outstanding care and
support services to sailors, marines, and their families. Our
commitment to them is to ensure that they will be well-trained and
ready to meet their responsibilities of protecting and preserving the
health of those entrusted to their care, at home and deployed.
way forward
Our sailors and marines know that Military Service can be
professionally rewarding, physically demanding, and potentially
dangerous. They and their families expect us to protect their health,
prevent injury and disease as best we can, and heal them when they're
wounded or injured. Equally important, they want that same support for
their families by having access to high quality health care when they
are deployed and at home. In addition, our retirees and their families,
through service and sacrifice, have earned a health care benefit that
is both comprehensive and affordable. A strong and vibrant direct care
system allows us to do those things while providing that exceptional
clinical experience for our staff, from sickbay to medical center,
augmented by vibrant R&D and top quality education and training so that
we can ensure we will have done all we can to save lives on the
battlefield and return home safely America's sons and daughters.
To this end, I believe that any health reform efforts must maintain
the direct care system as the strong epicenter of the MHS. Our MTFs
directly support the training, readiness, and sustainment of the men
and women of Navy Medicine so they can continue to do what they have
done since the founding of our Navy: Save lives when it matters most
and provide the best care possible to those who have volunteered to
defend our freedom. Any potential TRICARE reforms must contribute to
this vital responsibility by leveraging the strength and talents of our
medical forces and our MTFs, helping us embrace the rapid
transformation underway in health care and accommodate the changing
preferences of our patients and our force in how they seek healthcare.
These factors present great opportunities for us as we aggressively
implement best practices and scalable solutions throughout the MHS and
build upon productive collaborative relationships with leading health
system and academic medical centers. We continue to make solid progress
but all of us recognize the formidable work ahead. We thank you for
your leadership and look forward to working with this Committee in this
important work.
Senator Gillibrand [presiding]. Thank you all. I am very
grateful for your testimony. I am very grateful for your
service, and I appreciate this discussion today.
I would like to start with Dr. Woodson. Senator Tillis and
I are both very interested in this issue of comprehensive
autism care. I am pleased that the Defense Agency initiated the
comprehensive autism care demonstration in 2014, and I am very
interested in seeing the outcomes of this program.
However, I am concerned to hear that DHA [Defense Health
Agency] intends to lower reimbursement rates for providers of
ABA therapy for autism. I am most concerned that providers of
ABA therapy will no longer be able to accept TRICARE because
the reimbursement rates are too low.
Are you at all concerned about the impact changing
reimbursement rates will have on children's access to ABA
therapy, and what steps have you taken to ensure that access to
these services will not be adversely affected by changes in
reimbursement rates?
Finally, why not wait until the demonstration program is
complete so that the results are not skewed by a rate change?
Dr. Woodson. Senator, thank you for that very important
question, and let me just assure you that I am, as we all are,
very committed to special needs children. That has been a major
emphasis in terms of many of our reform activities.
In regards to the rate changes, the rate changes were
actually delayed a year and a half. We did an internal study on
rates because there were no established national rates, and of
course, part of our statutes require us to pay Medicare rates.
We set an amount and we studied it for a few years, did an
internal review. Then we were about to make rate changes, and
in fact, we heard from stakeholder groups, including Autism
Speaks and others, convened repetitive conferences to engage
them, and then commissioned two outside studies that confirmed
that we were overpaying. I would be happy to share the details
of these studies with you.
Finally, just to ensure that in fact we will not negatively
impact the services, we reviewed network adequacy almost on a
monthly basis and certainly very frequently. We will be
monitoring the situation very closely. Should we find, in fact,
in any locality that it has been adversely affected, we will
make rapid changes.
The final point in regards to this is that we put in a
safety valve in that we are not going to reduce rates right
away completely. It is a stepwise progression over a number of
years so that we can ensure that we do not lose providers.
Senator Gillibrand. Well, I have some specific concerns
with regard to the studies and the methodologies because I do
not think they are reflective of the cost. I would like to
request some follow-up information specifically on that and
further consideration because I think it is inadequate. The
reason why Autism Speaks spoke so forcefully against the
proposed rate changes is because they are the experts on
treating children with autism. I think your study is misleading
in its outcome. I will follow up with specific questions, but I
would like this to be readdressed because I am very concerned
that there will be very negative consequences for patients.
My second question is about innovation and different ideas
about how to innovate health care for our servicemembers. When
I was in Fort Drum earlier this month in upstate New York, I
was impressed with their approach to health care. There they
have a clinic on the base that provides basic primary care and
service to members and their families--for their members. Their
members and families also go off base for their specialty care.
The clinics and providers in the community, by virtue of
serving the military population, have an excellent
understanding of the needs of our men and women in uniform and
their families. This is along the lines of questions that
Senator McCain asked to the last panel.
Has DHA looked to Fort Drum as a model for providing health
care, and how can we better leverage community health care
options in serving the military community? Anyone can take the
question.
VADM Faison. Senator, I will share with you a pilot we have
in San Diego right now. In San Diego County, one out of every
five residents is eligible for military health care. That is
250,000 people. Of those, 662 are what we call high utilizers.
These are folks that use anywhere from 15 to 30 times as much
health care as anyone else in the county.
We have partnered with county public health to aggressively
manage them as a community-based effort. These are folks that
the car will break down and so they will call 911 to get a ride
to the ER to get medications. Care will be fragmented in a
variety different urgent care centers. By partnering with
county public health and bringing to bear county services, as
well as military provider services in a medical home approach,
but in a community-based format, we have improved their health,
cut their health care costs in the first year for 250 of them
by over $4 million, in the second year, by $12 million, and
dramatically cut by over 60 percent their hospitalizations.
That is one issue that we are in the process of exporting
across Navy medicine.
Senator Gillibrand. Thank you.
LTG West. Thank you, Senator Gillibrand.
Regarding the innovation of health care in the Fort Drum
model, that is a phenomenal model for that area. We have
noticed that it might not fit in all of our demographic areas.
The sizes of our MTFs vary from location to location, and that
may not be reproducible.
There are additional things that we are doing such as at
Fort Leonard Wood, Missouri, the innovation of using telehealth
where they actually have a virtual ICU [Intensive Care Unit]
set up where they have a telehealth arrangement with an ICU in
the State of Arkansas to help them with that. These are
leveraging technology using telehealth, using other types of
partnerships in order to achieve some of those same ends.
I agree that for the Fort Drum community, that model that
they have works very well.
Lt. Gen. Ediger. Senator, I mentioned in my statement that
the Air Force has 13 hospitals. That is actually below our
operational requirement for deployable medical teams. We have
had to use some innovative concepts in order to meet our
operational requirements. We have about 2,500 Air Force medical
personnel embedded in other services' hospitals, and that is
one way we are doing this.
The other way we are doing it is we have embedded surgical
staff into private sector hospitals in Omaha, Nebraska; Tampa,
Florida; Phoenix, Arizona; Oklahoma City; and in Birmingham,
Alabama. They are providing beneficiary care in those
hospitals.
I would say, though, that while that model has been
successful for us to some extent, I do not think we can go too
heavily in that direction because, as I said in my statement,
the military hospital remains the bedrock of our readiness
because that provides readiness to the entire deployable team,
the enlisted, the nursing staff. The embedded operations in
private sector platforms tends to benefit the provider staff
but not so much the nursing staff.
VADM Bono. Ma'am, there are some other areas too where we
have all been doing some innovative work, and this is in our
enhanced multi-service markets. Each of the services has this
where we have about 45 percent of our resources and 45 percent
of our patients where they need care. What is innovative about
that is that between the services, we are able to level-set
some of our resources, and depending on where the demand is for
care, one of the hospitals can send personnel to other
hospitals within that same market where the demand is.
Just as an example, here in the National Capital Region,
when we were looking at the demand for physical therapy
services, we were able to understand with a baseline assessment
of where the demand for physical therapy consults were coming
from, referrals. By using some of the assets within a couple of
the bedded facilities, we were able to send physical therapists
to those clinics where there was a high referral rate. By doing
that, we were able to get care closer to the patient in a more
timely manner, and it also decreased some of the demand for
specialty care down the road. This is something that all of the
services have with the enhanced multi-service markets.
Senator Gillibrand. Thank you very much.
Senator Graham [presiding]. Senator Tillis?
Senator Tillis. Thank you, Mr. Chair.
Mr. Woodson, rather than go back through what Senator
Gillibrand brought up on the ABA treatment, I would like to
join with Senator Gillibrand in some follow-up.
I think the key there has to do with timing, and the most
important thing is to understand the profoundly important value
of this treatment for not only the child that may be receiving
the treatment, but also the health and quality of life for the
Active Duty personnel, the military personnel, and the spouses.
Admiral Faison, I want to start with you and then probably
ask the other Surgeons General to chime in because I think you
are making a very important point about the unique nature of
this health system. I also want to get to military hospitals,
clinics produce inpatient, outpatient workload costs about 50
percent higher than what it would cost if the services were
purchased in the private sector.
Can you give me some help in trying to rationalize what the
real gap is? Because there is obviously some structural cost
based on the unique nature of what you are doing. Give me some
sort of sense of what you believe may be an attainable goal or
some sort of narrowing of the gap. Or is that gap right and
proper?
VADM Faison. Yes, sir, absolutely. If you look at our
costs, our costs break down really into two large buckets.
There are smaller buckets, but the two large buckets, of
course, are facility costs of maintaining bedded facilities.
Those are important as we get casualties back, the Walter Reeds
of the world and places like that----
Senator Tillis. There is an unused capacity that you may
not find in comparable private health care settings.
VADM Faison. Absolutely. If you look at the civilian
sector, they are running bed occupancies of 90-plus percent. We
do not do that because our beds are in reserve for contingency
operations.
The others are personnel costs. We staff to operational
plans of the combatant commanders. I do not staff to peacetime
care. I have in some places more staff in uniform than
necessary for peacetime demand, but that is because there is an
operational war requirement. We try and put those personnel in
places where can keep their skills current. As you have heard,
sir, from the other Surgeons General, when we cannot do that,
then we do out-service rotations at civilian centers and places
like that.
Senator Tillis. I am sorry to cut you off. I have just got
a couple of questions. I want to make sure I get at least one
more.
Is there a good sort of breakdown or something that you all
can provide us that really gives that to us in an empirical
way? Because if we make decisions about going back and saying
that we have narrowed the gap, that it is no longer 50 percent,
if that is the right number, then we have to understand the
tradeoffs that we have in terms of capacity and what you are
preparing to deal with. I think that that would be very helpful
to get back to this committee as we go through and identify
maybe opportunities. You in your opening statement said you are
not perfect. I want to go find out where those imperfections
are and spend the bulk of our time on this committee fixing
those rather than going down a path where if we look at the
data, we may agree that it is a structural cost that is the
cost of doing business and the unique nature of your business.
[The information referred to follows:]
VADM Faison. As I mentioned in my opening remarks, no health care
plan in the world puts their lives on the line in battle to defend and
care for their patients. It is not possible to accurately compare the
Direct Care system to care delivered in the private sector. Navy
Medicine is a rapidly deployable, fully integrated medical system and
this is what sets us apart from civilian medicine. We are the last
country in the world to have this capability. Our direct care system
serves as the readiness platform for our providers and is critical to
sustaining the vital skills and clinical competencies for our medical
force.
The range of costs for the same surgical procedure in the private
sector can vary widely, making it difficult to equate to procedures
performed in the direct care system. For example, in the Federal Health
Care Benefit, Blue Cross costs more than Kaiser Permanente--an HMO.
HMOs such as Kaiser control costs using limited choice in doctors,
specialists, high co-pays and limits on access to care. We do not use
these same tools in order to ensure choice, provide high quality care,
and maximize access for our Active Duty servicemembers, retirees, and
dependents as part of the TRICARE benefit.
Additionally, Direct Care costs include the cost of readiness. We
understand there is a desire to separate out these costs, and we are
working towards a solution. Our goal in Navy Medicine is to provide
exceptional value to those we serve by ensuring superior health
outcomes through the safest and highest quality care, convenient
access, full and efficient utilization of our services, and lower care
costs.
General, did you have a comment?
Lt. Gen. Ediger. Yes, sir.
I think one thing that is always a challenge, when you talk
about differentiating the cost of readiness versus the cost of
providing care, is as I said in my statement, the two are
really inextricably intertwined. There is a lot of work we do
that is operationally driven that is actually clinical in
nature. If you look at our primary care operations, for
example, things like medical evaluation boards, annual
preventive health assessments, post-deployment health
assessments, all of these things consume a significant amount
of our primary care bandwidth. It is very challenging to try to
look at perhaps the cost of providing care to enrollees to our
clinics and cleanly cleave and separate the cost of readiness
versus just the cost of providing care. That is one of the
traditional challenges we have always had with answering this
sort of question is that the two really are intertwined very
significantly.
Senator Tillis. Yes. I think the key is to try and
normalize it in some way that people can understand it, again
so that we set the priority on the things that we should
improve rather than look at things from a purely numerical
basis that on the surface may look like an opportunity to drive
improvement, but the consequences could be just the opposite of
what we want to accomplish on this committee, which is to work
with you and improve.
Mr. Woodson, the TRICARE legislative proposal did not
contain, I do not believe, any recommended improvements for
Guard and Reserve communities. What is in the offing there?
What can we expect?
Dr. Woodson. Thank you very much for that question because
that set of proposals really requires some additional studies
because I think there are several courses of action depending
on what type of reservist we are talking about. Let me just
give you some examples to crystallize.
On the one hand, of course, we initiated TRICARE Reserve
Select to fill the gap in what we thought was medical readiness
at the height of the war. The consequence of that was that the
reservist and family would have to switch insurance programs
when they came on Active Duty.
There is the possibility, frankly, of offering, of course,
TRICARE Reserve Select to a larger population or including it
in employer-based options, which might be reasonable.
There is the possibility, as the commission talked about,
of providing a basic allowance for health coverage when they
come on Active Duty, and we need to sort that out.
Then there are some other hybrid options that are out
there.
The issue with reservists is really about not forcing them
to change providers when they come on Active Duty. There are
different solutions, and we need to work those out and study
those a little bit more.
Senator Tillis. Thank you.
Thank you, Mr. Chair.
Senator Graham. Senator Blumenthal?
Senator Blumenthal. Thanks, Mr. Chair.
As you may recall, Dr. Woodson and other members of the
panel, in the 2016 National Defense Authorization Act, I
advocated for a uniform formulary for improved transition from
DOD care to the VA as servicemembers transition out of Active
service. This measure was successfully passed, and now we are
in an implementation stage. This joint formulary I think is
critical to the quality of care and, in fact, relates to a
variety of related medical issues that may arise when there is
a lack of sufficient transition in prescription drugs and other
health care.
What is the status of the implementation of the joint
formulary from the DOD perspective?
Dr. Woodson. I think there has been much progress certainly
in the areas of mental health medications, pain medications,
and some of those other critical medications for conditions in
which a gap would create a great deal of problems. They have
been mapped significantly to about the 96 percent level so that
we have a single formulary. I know there is just a little bit
more work that needs to be done on that, but there has been
significant progress on that front.
Senator Blumenthal. On the issue of prescription drugs,
particularly pain killers and opioids, is there an ongoing
danger in the military as, frankly, there is in the civilian
world of over-prescription and over-reliance on pain killers?
Dr. Woodson. Well, there is. That is something that needs
to be addressed not only nationally but within the military
health system.
What I would say is I think in that regard, we are a little
bit ahead of the curve and the reason being is that for a lot
of different reasons, there has been a lot of focus on the use
of pain medication. We have developed more comprehensive
strategies in terms of clinical practice guidelines. We have
courses that providers must take in terms of pain management.
We have invested in research and integration of alternative
methods for pain control. This has been part of a comprehensive
set of programs I think that we could even make available to
some civilian health care systems.
Senator Blumenthal. On the issue of mental health care, has
there been progress there, do you think?
Dr. Woodson. I think there has been progress, but you know,
mental health care--the more we study it, the more we try and
refine it, the more we find out about it. If I could break this
down into a couple of different issues.
Oftentimes dealing with mental health care, it is more than
just delivering mental health care. It is about delivering
social services and family supports, and that is one issue.
The other issue about mental health care is that we always
have this issue about whether or not we have enough providers,
but really what we need is a comprehensive new strategy for how
we employ our mental health specialists in a rational way to
deliver care. We never will have enough psychiatrists. We will
never have enough pediatric psychiatrists. If we utilize them
to do screening, then we make their time less available for
treating complex problems. What we need to do right now is work
on a more rational approach to how we employ, let us say,
certified mental health counselors, psychologists, licensed
psychological nurses, licensed social workers in a continuum of
care that allows us to address all the needs more
comprehensively because I am not sure we will ever generate
enough mental health providers.
Senator Blumenthal. That is the strategy that you say has
to be developed or is being developed?
Dr. Woodson. I think we are working on that. The previous
panel talked about the issue of embedding mental health care in
primary care practices. We have been doing that for years. We
have been embedding mental health care technicians and
practitioners in line units. We have already rolled out some of
that more comprehensive strategy, but still, I think we need to
array the different types of mental health professionals in a
better way to take care of many different problems.
Senator Blumenthal. As you know, Active Duty members of the
military who may suffer emotional or mental diseases, some of
them emanating from combat, post-traumatic stress and traumatic
brain injury, sometimes are given bad conduct discharges or
less than honorable discharges, bad paper, and then through a
tragic irony are deprived of medical care to treat the very
injury that causes their discharge under less than honorable
conditions. I have sought to have those discharges reviewed. In
fact, two Secretaries of Defense, beginning with Chuck Hagel
and most recently Ash Carter, have committed to change the
policies of the boards of correction review within each of the
services.
Has your input been sought on that issue? Because there are
medical issues involved in those reviews.
Dr. Woodson. The short answer, Senator, is yes. Let me,
first of all, thank you for your advocacy in this area. Of
course, for the last 2 years, we have actually reached out to
individuals who have been discharged with so-called bad paper
to let them know that their cases will be reviewed.
To the last part of your question, we have given mental
health professionals to these boards of review so that the
cases can be accurately reviewed.
Senator Blumenthal. Thank you. My time has expired.
These subjects are tremendously important, and I want to
thank all of the panel members for your hard work, all of the
hard work done by the men and women under your commands. Thank
you for being here today.
Senator Graham. Thank you.
I will be, it looks like, the last questioner here.
How many casualties have we suffered in Iraq and
Afghanistan? Not fatalities but injuries. How many people have
been wounded requiring admission to a hospital? Does anybody
know?
Dr. Woodson. Senator, it depends on how you actually
calculate those numbers, whether or not you include disease and
non-battle----
Senator Graham. It does not matter as long as you were in
Iraq and Afghanistan.
Dr. Woodson. It is over 100,000.
Senator Graham. Admiral Faison, can you imagine a military
health care system that did not have a military hospital?
VADM Faison. Sir, no, I cannot.
Senator Graham. Okay, because the bed space you have is not
designed for everyday activity. It is designed for wartime
contingencies. Is that right?
VADM Faison. That is correct.
Senator Graham. Most of these beds are empty during
peacetime simply because they are built to deal with wartime
contingencies.
VADM Faison. Sir, if I may. Those beds are not empty. We
work very closely with the managed care support contractor to
get care back into our facilities----
Senator Graham. What percentage of your beds are occupied--
--
VADM Faison. In general, we try and maintain a bed
occupancy of 80 percent or higher.
Senator Graham. What about the Air Force?
Lt. Gen. Ediger. Sir, we have a lower bed occupancy than
that. We are more in the 50, sometimes up to 70 percent range.
Senator Graham. What about the Army?
LTG West. Sir, it varies. Some of our large MTFs, Fort
Bragg and San Antonio, have a higher occupancy rate. Some of
our smaller facilities have a low daily patient census, and
those are the ones that we are actually looking at to realign
capability there.
Senator Graham. Here is my point. If we are going to reform
something, we need to understand what we are trying to
accomplish here. If you had civilian hospital administrators
over military medical facilities, would that create a problem?
VADM Faison. Sir, military hospitals are just like any
other military command. I personally would not put a civilian
in charge of a ship.
Senator Graham. That is what you would be doing, would it
not?
VADM Faison. Exactly. Yes, sir.
Senator Graham. A hospital is a military entity, and the
military command structure cannot be substituted.
VADM Faison. Yes, sir, because the good order and
discipline carries over to the battlefield and it starts in the
hospital.
Senator Graham. General West, at the end of the day, what
would happen if we opened up competition to all these military
facilities? Where would the military doc go?
LTG West. Sir, that is a very good question.
Senator Graham. What would they do?
LTG West. Sir, again----
Senator Graham. Like a dentist. Like if it is cheaper to
pull teeth downtown, which it may be, like how do our dentists
stay proficient in pulling teeth?
LTG West. Yes, sir, exactly. When you say open to
competition, sir, I think we are not in the same business as
for profit. No one appears they want to be in competition for
our deployed environment.
Senator Graham. You treat family members of Active Duty
personnel, all of you. Right?
LTG West. Yes, sir.
Senator Graham. That keeps your skill level up. It is good
for retention, good for recruitment.
LTG West. Yes, Senator.
Senator Graham. Does every member of the military have to
through an annual physical? The answer is yes.
VADM Faison. Yes, sir.
Senator Graham. Is that not primary care, General Ediger?
Lt. Gen. Ediger. Yes, sir.
Senator Graham. That is a primary care activity that is
related to readiness.
Lt. Gen. Ediger. Yes, sir.
Senator Graham. Those same doctors will be treating kids
with a cold.
Lt. Gen. Ediger. Yes, sir.
I would add that what we do when we provide care in our
MTFs, we are ultimately a mission support activity. We are
actually supporting commanders who are conducting missions. In
the Air Force, it is global mobility. It is the nuclear mission
on its RPA [Remotely Piloted Aircraft] operations, cyber ops.
By taking care of the airman and the family in our military
treatment facility, we are actually helping that commander take
care of that family.
Senator Graham. When you say that a military hospital costs
50 percent more to operate than a civilian counterpart, is that
a fair comparison, given the unique nature of military
medicine?
Lt. Gen. Ediger. I think it is an apples and oranges kind
of comparison, sir, because----
Senator Graham. You agree with me you could make things
more efficient.
Lt. Gen. Ediger. Absolutely.
Senator Graham. That is the goal. Right?
Lt. Gen. Ediger. Yes, sir.
Senator Graham. Do you all agree with me that the people
under your command have done historic work on behalf of the
Nation?
VADM Faison. Absolutely.
Senator Graham. I want to tell everybody on this committee,
that in this war, which has been going on for 14 years now,
there are people alive today that would not be alive in any
other war, and you guys are the unsung heroes of this war, as
far as I am concerned. I have been to forward-deployed areas
where people come in who have been blown up, and it is amazing
how you can put people back together again. That whole network
from Landstuhl to Walter Reed is just literally priceless, but
it needs to be more efficient.
Any last comments?
Dr. Woodson. Senator, if I may make one comment in
connection with making sure everyone understands that the
maintenance of a military health system is essential to the
defense of this Nation. The point I would make and give you an
example is that the MTFs are part of the medical force-
generating platform. Today in this country, there are 1,000
fewer graduate medical education spots than there are American
medical graduates. If we were to eliminate the military
treatment facilities and the military health system, we could
not generate enough doctors--and I would say also nurses, but
doctors to come on Active Duty. There just are not enough
training slots in this country. We must preserve this
generating platform and we must preserve the graduate medical
education program.
Senator Graham. On not a happy note, I think TRICARE, as it
is designed, is really antiquated. I would not give it a B. I
am really going to be hard on your guys to come up with
reforms, not just premium increases. We are going to look at
TRICARE and turn it upside down and make it more transparent
and make it more accountable because we are basically using
civilian networks when it comes to retirees and their families.
With that said, this has been a great hearing. Thank you
all for your service, and we will stay in touch.
The hearing is adjourned.
[Whereupon, at 4:24 p.m., the committee was adjourned.]
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Lindsey Graham
guard/reserve healthcare
1. Senator Graham. Dr. Woodson, DOD's TRICARE legislative proposal
contained nothing of substance to improve healthcare delivery for the
Guard and Reserve communities. At the hearing, you mentioned that the
Department is exploring its options for the Guard and Reserve
community. What options are you considering to improve the TRICARE
Reserve Select program for Guard and Reserve members and their
families?
Dr. Woodson. First, we believe that TRICARE Reserve Select (TRS)
will be improved by instituting TRICARE Choice. Guard/Reservists will
pay the same 28 percent that they do now but get a more modern PPO like
benefit with fixed network copays without paying a deductible. Second,
DOD has made a separate legislative proposal that would require that
Medicare participating physicians and other providers also participate
in TRICARE and the Veterans Choice program. This directly addresses the
issue of reserve family TRICARE beneficiaries having to change doctors
when the member is called for extended Active Duty by strengthening the
network of participating providers in all communities throughout the
United States. Third, while most physicians already accept TRICARE, for
those in areas with few TRICARE beneficiaries (as is true for many
areas where reserve families live), we can use current authority to pay
up to 115 percent of the normal rate for families of reservists called
to Active Duty in support of a contingency operation. Fourth, we need a
better understanding of the real issues involved in the transition of
reserve family members from employer-sponsored coverage to TRICARE when
the member is called to Active Duty. We need to supplement the
scattered anecdotal reports of beneficiaries needing to change doctors
with specific information on the circumstances of any transition
problems so that we can develop appropriate solutions. Finally, we have
conceptualized other possible approaches, such as: a Basic Allowance
for Health Care (BAHC) for families of activated Guard/Reserves;
options to make TRICARE Reserve Select more attractive; a plan similar
to the Federal Employees Health Benefit Program; and a way to
coordinate health coverage between employers and DOD for reserve
component families. However, these possible options require more
analysis, and perhaps limited pilot tests, to determine: 1) if they
would actually solve documented problems; 2) their feasibility and
cost; and 3) unforeseen second and third order consequences.
2. Senator Graham. Dr. Woodson, what is your timeline for making a
decision on which options to implement?
Dr. Woodson. Step one is to get a better understanding of the
specific friction points associated with the transition of reserve
component family members from employer sponsored care to TRICARE when
the member is called to extended Active Duty. This will ensure that we
are developing solutions to actual problems, rather than perceptions
and anecdotes. We will be studying the issue over the next several
months and will propose potential solutions within one year. We expect
that DOD would be able to present our findings and proposals during the
first session of the next Congress.
tricare reform
3. Senator Graham. Dr. Woodson, VADM Bono, Lt. Gen. Ediger, LTG
West and VADM Faison, DOD's TRICARE legislative proposal for fiscal
year 2017 would encourage beneficiaries, through targeted fee
increases, to get the majority of their care in military hospitals and
clinics. With DOD's proposal, the Department asks beneficiaries to
trust that you will transform the direct care system into a high-
performing health system. For many years, we have heard DOD and the
Services make promises to improve the delivery of healthcare for
beneficiaries, but little progress has been made. Why should
beneficiaries trust DOD and the Services to deliver on your current
promises?
Dr. Woodson. and VADM Bono. For one thing, DOD is implementing the
very meaningful reforms that were included in the National Defense
Authorization Act for Fiscal Year 2016, including requirements to
ensure that access standards are met, implementation of the urgent care
pilot, and much greater transparency in performance data on access,
quality, patient safety, and beneficiary satisfaction. These and other
actions lay the foundation for future improvements in care delivered
through the MHS.
In the near term, all of the Services are focusing on improving
access and quality of care. Medical Home initiatives are being expanded
and further supported, improving beneficiary access to comprehensive
medical care. Roll-out of the Nurse Advice Line and secure messaging
initiatives offer to increase beneficiary access to professional
medical advice. Efforts to streamline the referral process are designed
to lessen irritation. Telehealth capabilities are being expanded and
enhanced right now. The Services are also implementing programs to
improve Active Duty wellness and enhance behavioral health.
Other actions are laying the groundwork for continued future
improvement. Access measures have been added to the enterprise-wide
dashboard, and are reviewed by senior leadership monthly. MHS is
rolling out standard quality and safety measures across the enterprise
to allow leadership to compare performance across MTFs. MHS is
expanding participation in the American College of Surgeons National
Surgical Quality Improvement Program (NSQIP), which provides a
comprehensive suite of measures of the quality of surgical care.
Enhanced measurement means problems are identified and corrected, and
this sets the stage for improving trends in quality of care provided.
In addition to these administrative improvements and the
legislation to reform the TRICARE health plans, DOD's other health
program legislative proposals are also part of a comprehensive Military
Health System reform package. These include requiring Medicare
participating providers to also participate in TRICARE and the Veterans
Choice program. This will strengthen TRICARE networks of participating
providers throughout the United States. We have also proposed enhanced
preventive care services and an improved program of dental and vision
coverage.
We believe enactment of our package of legislative proposals and
Active oversight of our continuing implementation of administrative
reforms are the ways Congress can ensure that we deliver on real
Military Health System reform.
Lt. Gen. Ediger. The Air Force has improved access to care across
our system by 20 percent over the past 18 months and continued
improvement remains a top priority. We overhauled Air Force primary
care in 2008 under the Patient Centered Medical Home model, which
generated team-based care and improved performance against national
averages in preventive care and care for chronic disease. Under this
construct, team continuity of care is consistently above 90 percent
across our system and patient satisfaction has risen above 90 percent.
Our strategy for continued progress in improving access to care by
enabling more same-day access, includes actions pertaining to filling
of primary care provider positions, improved temporary fills of
provider positions gapped due to deployments and standardization of
management practices within the clinics. As our primary care teams are
primarily staffed by Active Duty, access is negatively impacted each
year by staff transitions due to reassignment, deployments and
separations. In fact, such gaps are our top challenge in regard to
access to care and would be alleviated with a staff mix with a higher
proportion of civilian positions. Relief from the 2009 NDAA restriction
on mil-to-civ conversions in the medical services would give the Air
Force the flexibility to change the staffing mix in a way that would
significantly improve access to care. As a measure to provide some
degree of relief, the Air Force is in the process of seeking resources
to add some civilian primary care positions to enable improved coverage
of gaps in Active Duty fills.
Additionally, the Air Force has implemented policies for first call
resolution to patients; increase same day appointment availability;
eliminate referrals for physical therapy; streamline the specialty care
referral process; and implemented the FY16 NDAA urgent care pilot. The
pilot allows Active Duty servicemembers (ADSMs) in TRICARE Prime
Remote, non-ADSMs in TRICARE Prime, TRICARE Prime Remote, or TRICARE
Young Adult, and TRICARE Overseas Program beneficiaries traveling in
the U.S. to seek two urgent care visits each fiscal year without a
referral or prior authorization. Jointly with the Army and Navy, we
have developed a Military Health System Specialty Care Referral
Accountability and Business Rules policy that will compress the
timeline from referral order to specialty care appointment. The
objective of the new policy is to make the referral management process
more patient-centered by increasing uniformity, reducing wait times
before appointment booking, and improving central accountability for
referral management performance.
LTG West. Army Medicine has made great strides towards transforming
the direct care system to meet the needs of our beneficiaries
particularly with access to primary and behavioral health care. We have
significantly increased the annual number of primary care appointments
for all patient beneficiary categories in our Medical Treatment
Facilities (MTF) while concurrently increasing patient satisfaction
with access to care. We have further increased primary care appointment
capacity and convenience with our 20 Community Based Medical Homes and
have immediate plans to add 4 more before the end of FY17. The number
of behavioral health providers has more than doubled since 2007 and
many are located in small clinics located near where soldiers live and
work.
Army Medicine has completely transformed its system for delivering
behavioral health care in the last five years and now offers services
that exceed the standard of care delivered in the private sector. The
implementation of the Primary Care Behavioral Health team complements
the efficiency of managing non-acute behavioral health concerns without
a referral at the Army Medical Home appointment to foster an improved
patient experience and improved satisfaction. MEDCOM has developed the
nation's leading system for collecting and using clinical outcome data
in the field of behavioral health. The Behavioral Health Data Portal,
providing standardized information on patient's progress in treatment,
has been used in over 2.2 million clinical encounters. Additionally,
MEDCOM has established the Child and Family Behavioral Health System
(CAFBHS) on all Army installations blending best practices in
consultation, collaboration and integration of care to meet the needs
of Army Children and Families in support of the Patient Centered
Medical Home. CAFBHS includes School Behavioral Health, now present in
60 schools across 14 installations, which places behavioral health
providers in clinics within schools on Army installations.
We continually focus on improving quality care and satisfaction for
our female beneficiaries. Army Medicine has numerous quality measures
which exceed the national perinatal average, such as: 1) Percent of
Cesarean Deliveries is 23.9 percent in the Army (31 percent for the
national average); 2) Primary Cesarean Delivery rate is 12.60 percent
in the Army (17.53 percent for the national average); 3) Neonatal
Mortality is 0.06 percent in the Army (0.24 percent for the national
average); 4) Vaginal Deliveries with coded Shoulder Dystocia linked to
Birth Trauma is 12.62 percent in the Army (13.75 percent for the
national average); and 5) Postpartum Hemorrhage is 2.88 percent in the
Army (3.69 percent for the national average). In addition, obstetric
patient satisfaction, as measured from the TRICARE Inpatient
Satisfaction Survey, continued to increase over the last year from 55.3
percent to 64.5 percent in 3rd quarter of FY16. The Women's Health
Service Line is invested in providing an outstanding patient experience
for our beneficiaries and shares best practices across the enterprise
in order to sustain improvements and continue increasing patient
satisfaction.
In addition to providing care during normal duty hours using
traditional methods, Army Medicine actively promotes virtual health
care, leverages technology, and provides extended care hours as medical
force extenders. Army Tele-health and Tele-Behavioral Health provide
clinical services across 18 time zones in over 30 countries and
territories across all Regional Health Commands and in the deployed
environment. Working together, TRICARE Online, the Nurse Advice Line
and Army Medicine Secure Messaging improve access for our
beneficiaries. TRICARE Online is used to schedule or cancel
appointments, the Nurse Advice Line provides high-quality and safe
professional medical advice to our beneficiaries 24 hours a day and
Secure Messaging provides a confidential means of communication between
beneficiaries and providers. Finally, many Army treatment facilities
offer appointments after 1600 hours or on the weekends and have either
an Acute Care Center (ACC) or a ``fast track'' clinic inside their
Emergency Rooms.
In April 2016, Army Medicine modified the first call resolution
policy to ensure that 100 percent of enrolled beneficiaries receive an
appointment at the time of the initial request. If an appointment is
not available in the direct care system within the access to care
standards, the call center clerk will offer the beneficiary the
opportunity to be seen in a network ACC and will help the beneficiary
find the nearest network ACC. Based on current survey methodology,
MEDCOM's overall satisfaction with the phone appointing system service
is now the highest it has been in over six years.
Additionally, only 12.3 percent of U.S. hospitals participate in
the American College of Surgeons sponsored National Surgical Quality
Improvement Program (NSQIP), a voluntary risk-adjusted performance
metric data collection. Army Medicine began submitting information to
NSQIP about eight years ago for our eight largest hospitals. We are now
submitting data for 17 of our 19 Army bedded hospitals. Overall, Army
MTF performance for surgical quality is comparable with NSQIP
participating civilian hospitals. In a review of quality of care issues
related to patient volume, our outcomes were equal to or better than
our civilian counterparts. We continue to strive for excellence in
quality of surgical outcomes. All of the established NSQIP sites are
active in the MHS Strategic Partnership with the American College of
Surgeons, which is dedicated to surgical quality and provides
opportunities for engaging in quality improvement initiatives.
Army Medicine remains committed to meeting the needs of all our
beneficiaries. Our significant gains in access and satisfaction provide
a history of success. With continued focus and dedication, we will
ensure beneficiary trust is rewarded with efficient, safe, and quality
healthcare.
VADM Faison. Navy Medicine understands that it is a privilege and
honor to have the trust of our beneficiaries. We have made significant
improvements in the way we deliver health care as a High Reliability
Organization (HRO). We are committed to offering the best patient
centered care the nation has to offer through innovative partnerships,
access built around our patient's needs, the latest in virtual health
and technology, and innovative treatments that impact health outcomes
and the experience of care.
Since the Military Health System (MHS) review in 2014, we have
worked diligently across the enterprise to further enhance and build on
efforts in the areas of access, safety and quality. As reported in the
MHS Review, DoD Medical Treatment Facilities (MTF) were found to be
``as good or better'' than many top tier civilian institutions
nationwide. As an HRO, we have centered our efforts on further
optimizing clinical outcomes, enhancing access, leveraging technology,
enhancing the coordination of care, and achieving zero patient harm. A
critical component of the HRO Operating Model is the Clinical Community
Structure. Navy Medicine has established the role of Chief Medical
Officer (CMO) throughout the enterprise with the responsibility to
engage clinical leadership and promote transparency. Together these
efforts build on past successes to shape a systemic culture with focus
on safety and quality health care.
We continue to search for innovative solutions to best serve our
beneficiaries while maintaining the highest level of readiness for the
next conflict. Primary care and many self-referral appointments are now
available for on-line booking to ease the process for our patients. We
also implemented a population health portal which provides a more
holistic approach to our patient's health care needs. As part of a Tri-
Service initiative, Navy Medicine has launched a ``PCM On-Call'' pilot,
where we are connecting patients to providers after hours by offering
the option to speak with MTF-based clinicians.
As a result of some of the initial improvements in readiness and
health outcomes, we have expanded the Medical Home Program to 23
Marine-Centered Medical Home and 5 Fleet-Centered Medical Homes to
enhance access and care for our operational forces. We will also
continue to invest in our robust secure messaging program, Tricare
Online, and Nurse Advice Line to maximize access and convenience for
our patients. For example and emulating goals from the civilian sector,
we have set and are currently exceeding our goal of ensuring at least
80 percent of secure messages are answered within one business day.
Our Value Based Care Pilot at Naval Hospital Jacksonville focuses
health care delivery on improved patient outcomes, increased readiness,
higher patient satisfaction, and improved value with optimal resource
utilization. To understand the patient's experience, we are using the
Joint Outpatient Experience Survey to assess the patient experience
with care received at Navy Medical Treatment Facilities and across all
of the Services. Moreover, we are steadfast in recruiting and training
aspiring health care professionals that will continue the long
tradition of providing safe, efficient, and quality health care to the
warfighters and their families.
Navy Medicine is also leveraging technology to improve access and
convenience for all beneficiaries. We continue to expand our web
presence and implement tele-health options wherever feasible to ensure
our patients have timely access to care. In addition, BUMED is
developing an enterprise mobile application, based upon an extremely
successful model utilized at Naval Hospital Camp Lejeune, where
patients can easily view available appointments, pharmacy wait times,
and access important facility information. Our dedication to technology
helps ensure Navy Medicine remains viable in an extremely complex and
dynamic health care environment.
access to care
4. Senator Graham. VADM Bono, Lt. Gen. Ediger, LTG West and VADM
Faison, instead of the current disjointed processes in place today,
should the Defense Health Agency (DHA) and the Services implement a
centralized, standardized medical appointment system with expanded
appointment availability across military hospitals and clinics to
improve access to care?
VADM Bono. The Services and the DHA have implemented a centralized,
standardized medical appointment system called the Composite Health
Care System (CHCS). CHCS is the sole appointing system used by the
military medical treatment facilities (MTFs) to schedule appointments.
Appointment data from CHCS is transparent in the TRICARE Operations
Center.
Primary Care appointing processes are standardized across the
Services and the DHA, regardless of whether the appointment is made by
calling a centralized appointing center, the primary care clinic, on
TRICARE OnLine or via secure messaging. Primary Care appointment
processes were further standardized in fiscal year (FY) 2015 with two
new Tri-Service policies:
First Call Resolution policies outline standard Service
and DHA-approved processes for use when Prime beneficiaries call the
MTF for an appointment. These processes are designed to ensure the
Prime beneficiaries are not asked to call back another time because no
appointments are available. Currently, compliance with these polices is
evaluated based on patient satisfaction with seeing a provider when
needed. In addition, the Services and the DHA added a question
specifically asking Prime enrollees if they were asked to call back for
an appointment on the new Joint Outpatient Experience Survey (JOES);
the JOES is expected to begin implementation in mid-fiscal year 2016.
Finally, the Services and the DHA are modifying the CHCS appointing
menu to allow measurement of how well MTFs are complying with the First
Call Resolution policies.
Simplified Appointing policy guidance was implemented
August-October 2015; guidance standardizes requirements for primary
care appointments including reducing the number of appointment types
for most primary care appointments to two (24-hour and future),
increasing the number of appointments available per day and maximizing
the number of appointments visible to appointment clerks by minimizing
``clinic book only'' appointments. In January 2016, almost 99 percent
of primary care appointments are 24-hour and future types, the total
number of primary care appointments available per duty day increased 24
percent and almost 100 percent of primary care appointments are fully
visible and available for (the <0.6 percent of exceptions includes such
as vasectomies which are booked by the clinic).
As a result of these policies and other standard Tri-
Service/DHA access to care initiatives in primary care, 24-hour
appointment performance improved 31 percent since the Military Health
System (MHS) Review and variance among MTFs decreased 33 percent.
Future appointment performance improved 20 percent since the MHS Review
and variance among MTF decreased 31 percent.
Way Ahead: The Services and the DHA are continuing to
standardize primary care practices based on MTF leading practices
validated during the summer 2015 MTF Site Visits and Patient Listening
Tours by Primary Care and Access Service and DHA experts. As discussed
above, the Services and the DHA have increased the total number of
appointments available per duty day by 24 percent and are working to
further increase the availability of appointments by extending
operating hours Monday-Friday and on weekends, based on an analysis of
past demand. Many MTFs have already extended duty hours Monday-Friday
and on weekends, especially in Pediatrics. The Services and the DHA
also are working to offer additional opportunities for care by offering
virtual phone visits with primary care managers after duty hours
through the Nurse Advice Line. Currently, the direct care system
captures over 90 percent of its enrollees' primary care needs; however,
through the initiatives discussed above, the direct care system goal is
to develop standard processes to meet an even higher percentage of its
own enrollees' primary care needs.
Specialty Care appointing is not standardized or centralized across
the Services and the DHA in the same manner as primary care. The
Services' specialty clinics review the appointment requests or
referrals and determine if they can provide the care within access
standards. If the individual specialty care clinic can provide the
appointment within access standards, some specialty clinics contact the
patient directly. In other cases, the patient is directed to call the
specialty clinic within three days of the Primary Care Manager
referring the patient to specialty care. The Services and the DHA
recognize specialty appointing processes require standardization and
centralization in order to increase efficiency and to be more patient-
centered. As a result, Service and DHA governance-approved new
Specialty Appointing and Referral policy guidance on February 2016,
which is based on some MTF and Enhanced Multi-Service Market leading
practices. The Service and DHA specialty care appointing guidance is
being formalized and will be implemented in fiscal year 2016. The goal
of the policy guidance is to standardize and centralize specialty
appointing processes to the greatest extent possible with the goal of
providing the Prime enrollee with a specialty appointment date and time
at the time the primary care manager recommends the care and before
they depart the MTF. Finally, the Service and DHA Access Improvement
Working Group is developing Specialty Care standardized appointing
guidance similar to that implemented in primary care in order to
increase the number of available appointments, which will facilitate
centralized and standardized specialty appointing.
Lt. Gen. Ediger. Central appointing is being utilized in some
locations where more than a single military treatment facility exists.
This, along with centralized referral management improves access by
more completely utilizing available appointments when multiple military
treatment facilities are in the same vicinity. The majority of Military
Healthcare Facilities are not located within the 30 minute Primary Care
Manager requirement of another military facility. We believe local
management of appointment templates best enables commanders to meet the
needs of the population and the mission. Local management of schedules
enables template adjustments for deployment processing, exercise
participation and readiness training.
LTG West. Centralizing medical appointing within Enhanced Multi-
Service Markets is already occurring. While our focus remains on
achieving efficiencies and building capacity for our enrolled
beneficiaries within our MTFs, we recognize that cross-booking
appointments may be a viable option for some locations. When exploring
options for improving access to care we must also consider any impact
on the overall patient experience, meet expectations for continuity of
care, and improve outcomes.
VADM Faison. A centralized, standardized appointment system for the
entire Military Health System (MHS) will not improve access to care
(ATC) because, except for multi-service markets (discussed next), MTFs
are, in general, not proximal to each other's as one would find in
civilian systems using centralized appointments where patients can
easily drive between facilities to get the soonest appointment. In high
military concentration areas where there is multi-service
representation of Military Treatment Facilities (MTFs), this Multi
Service Market standardization often makes sense and is in use today.
In these areas, we share resources and capacity. Outside of these
markets, we empower the MTFs to establish relationships, partnerships
and systems that support local coordination for access to care that is
patient-centered.
All Navy Medicine MTFs have some type of centralized appointment
center. Our large Naval Medical Centers use a central appointment line
for primary care and specific specialty clinic appointments. Smaller
MTFs have a more decentralized arrangement that is both practical and
economically feasible. Also, all Navy MTFs use nearly identical
appointing processes and the same record system called the Composite
Health Care System (CHCS). This allows for oversight and surveillance
reporting for Health System performance in analytical tools.
Navy Medicine is very proud of our recent efforts that have
improved access and developed two additional centralized appointing
resources in use across our network of MTFs. We have also expanded
appointment availability via the TRICARE Online website. Access to this
website is available for all Navy MTF enrollees. For acute care needs,
patients have the option of calling the Nurse Advice Line (1-800-
TRICARE), which connects them to a registered nurse who is authorized
to book care into our MTFs.
operational medical force readiness
5. Senator Graham. LTG West, what is the actual total operational
medical force readiness requirement for the Army?
LTG West. The total operational medical force readiness requirement
for the Army is determined annually through the Total Army Analysis
(TAA) process and is informed by current operational needs as validated
by the Joint Staff. The current operational medical force requirements
were last revalidated in TAA 18-22 in April 2015, totaling 20,478
requirements for Army Medicine soldiers.
This includes 5,262 requirements for Army Medicine soldiers
assigned to medical units that perform missions above the Brigade
Combat Team level such as our Combat Support Hospitals and Forward
Surgical Teams.
Additionally, 12,051 Army Medicine soldiers are required to be
assigned organically to other Army units such as Brigade Combat Teams,
the US Army Special Operations Command, and key staff positions such as
Command Surgeon offices in Army mission command headquarters.
Finally, the Medical Command (MEDCOM) contributes to medical force
readiness by providing trained providers to operational force units
through the Professional Filler System (PROFIS). Approximately 3,165
MEDCOM positions are categorized as PROFIS. This number reflects valid
Operating Force requirements as well as other needs for PROFIS such as
backfill of critical specialties in Reserve Component medical units
where shortfalls exist.
6. Senator Graham. Lt. Gen. Ediger, what is the actual total
operational medical force readiness requirement for the Air Force?
Lt. Gen. Ediger. 27,999.
7. Senator Graham. VADM Faison, what is the actual total
operational medical force readiness requirement for the Navy?
VADM Faison. The 2016 program of record for Navy Medicine to
support the operational requirement is 38,802 (Total Force Manpower
Management System data as of 23 December 2015). This requirement
represents funded billets, not assigned personnel. Navy Medicine exists
to provide a rapidly deployable health care system across a wide
variety of operational settings in support of the Warfighter.
Navy Medicine's Active Duty requirement is based on the operational
mission in support of the Department of the Navy--the United States
Navy (USN) and the United States Marine Corps (USMC). The modeling and
analysis projections supporting our requirement for uniformed providers
are derived directly from Combatant Commanders' Operational Plans
coupled with the Medical Manpower All Corps Requirements Estimator
(MedMACRE), a validated force planning tool. These plans outline the
capabilities required to prosecute various wartime scenarios based on
the Secretary of Defense's Defense Planning Guidance. Navy Medicine's
support to the operational requirement includes the following three
major categories:
Day to day organically assigned personnel to support
operational Navy and USMC units (Ships, subs, squadrons, overseas
hospitals).
Capabilities needed to augment the day to day operational
forces, other theater medical assets to support operational forces, and
contingency operations across the globe (Hospital Ships, Casualty
Receiving Treatment Ships, and Marine Corps units).
Development, honing & sustainment consisting of personnel
assigned to training pipelines, provision of mission-specific support
(Students, Faculty, Logistics, Public Health, R&D).
8. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, how
long has it been since the Department evaluated and updated the
Combatant Commands' (COCOM's) operational medical force readiness
requirements?
Lt. Gen. Ediger. The AFMS Critical Operational Readiness
Requirements determination was last updated in 2013. The readiness
demand signal has remained the same since that time. We update the
requirements when there is a major change in our force structure or
demand signal.
LTG West. The total operational medical force readiness requirement
for the Army is determined annually through the Total Army Analysis
(TAA) process and is informed by current operational needs as validated
by the Joint Staff. TAA considers all COCOM daily operational
requirements, defense strategic guidance, and other mission directives.
These are modeled by the Center for Army Analysis to generate the total
requirements and determine the resourcing within the programmed force
constraints. TAA 18-22 was completed in April 2015. TAA 19-23 is
ongoing.
VADM Faison. Navy Medicine coordinates with OPNAV, Headquarters
Marine Corps, and Naval Component Command Fleet staffs to update its
requirements routinely throughout the Program Objective Memorandum
(POM) process using the OSD directed Future Force Structure Planning
Process, and revalidates that analysis each POM cycle.
The last major change in the OSD directed Future Force Structure
Planning Process was in 2013 when OSD directed the use of the
Integrated Security Construct Bravo (ISC-B) set of planning scenarios
for use in POM-15 analysis. This analysis was also reflected in the
Military Health System Modernization Study Report.
9. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, what
is the full cost to the taxpayers to sustain your Service's operational
medical force readiness requirement?
Lt. Gen. Ediger. The Fiscal Year 2017 Air Force associated full
costs to taxpayers is $6,269,204,000, which includes healthcare
operations, research and procurement, as well as military personnel
salaries for Air Force medical personnel, projected Medicare Eligible
Retiree Healthcare Fund receipts, and Military Construction. Not
included in this total are the Defense Health Agency costs for Private
Sector Care attributed to Active Duty Air Force and their dependents,
as well as the Defense Health Agency cost of shared services provided
to the AFMS.
LTG West. The cost to taxpayers to sustain the operational medical
force for the Army is between $9.18 billion and $9.38 billion annually.
These readiness costs are split between the Army funded medical field
units (20 percent) and the Defense Health Program (DHP) (80 percent).
The medical costs within the Army are funded with Army Operations &
Maintenance; Army Procurement; Army Research, Development, Test, and
Evaluation (RDTE), Military Personnel appropriations pay for a force
that is manned, equipped, and trained. Costs to support the Army
National Guard and Reserve medical units are not included in these
calculations.
VADM Faison. On December 14, 2015, Deputy Secretary of Defense Work
signed out a memorandum requiring the Services and the Defense Health
Agency to define military medical force readiness and develop a model
to determine and project the Department's cost for medical force
readiness. Navy Medicine is actively participating in this effort.
10. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, what
percentage of the total Active medical force (officer and enlisted
personnel) in your Service deployed to a combat theater each year over
the last 15 years?
Lt. Gen. Ediger. The following data is for Air Force deployments
for combatant command requirements from 2001-2015 that were filled by
Active Duty Air Force Medical Service members. This data does not
account for the 873 Air Force servicemembers who are on Prepare to
Deploy Orders in support of the SECDEF's Global Response Force or
United States Northern Command's Defense CBRNE (Chemical, Biological,
Radiological, Nuclear, and Explosive) Response Force. This also does
not include airmen supporting operations from AF installations, such as
nuclear deterrence, cyberdefense, remotely piloted aircraft operations,
intelligence operations centers, global mobility, long range strike and
Homeland defense.
----------------------------------------------------------------------------------------------------------------
Year Number of Deployments AFMS AD End Strength Percent of AFMS
----------------------------------------------------------------------------------------------------------------
2015.............................. 1,634 28,574 5.7%
2014.............................. 1,719 29,190 5.9%
2013.............................. 2,516 30,123 8.4%
2012.............................. 2,975 29,986 9.9%
2011.............................. 3,426 30,164 11.4%
2010.............................. 3,703 30,610 12.1%
2009.............................. 3,735 30,176 12.4%
2008.............................. 4,200 29,792 14.1%
2007.............................. 4,199 30,551 13.7%
2006.............................. 3,097 30,750 10.1%
2005.............................. 2,935 31,173 9.4%
2004.............................. 2,730 32,519 8.4%
2003.............................. 3,357 31,203 10.8%
2002.............................. 2,487 31,068 8.0%
2001.............................. 987 30,402 3.2%
----------------------------------------------------------------------------------------------------------------
LTG West. The percentage of total Active medical force (officer and
enlisted personnel) that deployed to a combat theater over the last 15
years is as follows:
2001:................... 0.54% deployed
2002:....................... 1.70%
2003:....................... 6.56%*
2004:....................... 4.83%
2005:....................... 5.46%
2006:....................... 5.05%
2007:....................... 5.73%**
2008:....................... 5.05%
2009:....................... 6.96%***
2010:....................... 6.87%
2011:....................... 6.47%
2012:....................... 5.97%
2013:....................... 5.71%
2014:....................... 3.79%
2015:....................... 1.51%
Notes: *Initiation of OIF 1 in 2003 / **OIF Surge 2007-2008 / ***OEF
Surge 2009-2011
VADM Faison. We define a combat theater as an Active area of
responsibility with ongoing combat operations (i.e. OIF, OEF). This
does not include personnel deployed on exercises or in support of
humanitarian assistance/disaster relief (HA/DR) operations like Haiti,
Katrina, Ebola and similar Navy Medicine HA/DR support operations. In
addition, a significant portion of Navy and Marine Corps forces are
forward deployed and on station 24/7, 365 days a year. These forces
routinely rotate in and out of combat theaters throughout their
operational tours. Navy Medicine personnel are directly assigned to
these operating forces as organic assets.
The table below represents the number of personnel deployed from
shore-based Navy Medicine Medical Treatment Facilities (MTFs) compared
to all Navy Medicine personnel assigned to these MTFs. Of note, the
current Navy Medicine data application for tracking deployments was
implemented in 2005. Data prior to 2005 is not available.
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Fiscal Year
PRI--CAT -------------------------------------------------------------------------------------------------------
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
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Personnel....................................... 30,104 29,881 29,059 27,576 26,332 27,010 27,379 27,833 28,367 28,365 28,039
# Deployments................................... 4,472 4,071 3,443 2,929 2,418 2,986 2,058 1,423 857 811 1,499
Percentage of Personnel Deployed................ 14.86% 13.62% 11.85% 10.62% 9.18% 11.06% 7.52% 5.11% 3.02% 2.86% 5.35%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Not included in the table above are the organically assigned Navy
Medicine personnel within Navy and Marine Corps units. For fiscal year
2015 these are approximately 5,726 billets of the Active medical force
assigned to the Marine Corps (Budget Submitting Office (BSO)-27), and
3,124 billets assigned to the Fleet (BSO-60, BSO-70). Historically,
these organic assignments have remained stable over the last 10 years.
military provider productivity
11. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, does
lower military provider productivity contribute to problems with access
to care for beneficiaries?
Lt. Gen. Ediger. When considering productivity of Air Force (AF)
providers, it is important to consider that 87 of AF medical personnel
are uniformed servicemembers. Also, 96 percent of AF medical personnel
are assigned to AF hospitals and clinics with only 4 percent assigned
to operational units. This means AF providers in hospitals and clinics
are not only providing health care, but also constitute the deployable
medical force and support day-to-day military operations at the
installation. We believe AF providers are fully productive across a
broad spectrum of responsibilities, which include readiness training
and engagement with the missions they support to address operational
health concerns. We adjust enrollment ratios to a level that is
estimated to match the clinical availability of military providers, but
sometimes mission priorities decrease availability and thus diminish
access. We are developing a new enrollment tool to adapt enrollment
ratios to particular missions and more precisely match capacity to
demand.
It is also true that the AF has a significant number of relatively
new providers due to turnover in the medical force. New providers are
generally less productive clinically until they attain a certain level
of experience. This is currently a factor in access to care due to the
increase in new provider accessions over the past year subsequent to
increased requirements for physician assistants and family nurse
practitioners.
LTG West. The Medical Command continues efforts to better predict
and mitigate operational readiness requirements in order to improve
access to care for all beneficiaries. Nonetheless, essential
operational medical readiness requirements, including military training
requirements, may impact military provider availability; however, our
staffing levels and mix of military and civilian or contract providers
take these requirements into account.
VADM Faison. Low provider productivity does not impact access to
care for Navy Medicine. With regard to access performance, the Navy has
the best performance in the Direct Care system. Further, our wait times
for appointments outperform civilian benchmarks used by most health
systems. Per MHS policy, MTFs are required to provide a primary care
appointment within 24 hours to meet a patient's acute care needs. Navy
Medicine routinely meets or outperforms this standard. By comparison,
available civilian performance standards for acute appointments is
typically 48 hours. Likewise, a routine primary care visit is required
by our system within 7 days. By comparison, the civilian performance
for a routine primary care visit is typically 10 business days or more.
Lastly, Initial Specialty Care visits are required to be seen within 28
days for Navy MTFs. Navy Medicine meets or outperforms this standard in
most cases when staff are available. Civilian specialty access varies
widely by geographic region.
Navy Medicine performs much better than the policy requires. The
MHS measures access to available appointments with an industry tool
called the ``3rd Next available'' measure. By definition, this measure
counts the first 3 open appointments available for every clinic in the
system. This measurement is performed daily across all MTFs. For
calendar year 2015, Navy Medicine recorded 1.0 days as the ``3rd next
measure'' for acute primary care appointments; the MHS average for the
period was 1.6 days. That means for an average day in Navy medicine,
patients needing an acute appointment had three potential appointments
to choose from in the next 1.0 days (24 hours). ``3rd Next available''
performance for routine appointments in primary care was 6.3 days and
for initial specialty care appointments the value was 13.3 days: both
leading values are well within the more stringent MHS standards.
To ensure quality access is maintained for our patients, our
leadership at the MTF, Regional, and headquarters regularly track
availability of appointments for patients using the ``3rd Next
available'' measure.
The factors which contribute to high productivity and quality
access performance are generally independent of available patient
appointments. We manage our appointments to meet the needs of our
patients.
12. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, what
are you doing now to increase provider productivity, which will lead to
enhanced access to care?
Lt. Gen. Ediger. Primary actions to increase clinical throughput
pertain to team processes to serve the patient fully while focusing
provider activities on assessment and provision of care. This involves
more effective use of support staff protocols which leverage the skill
sets of various team members to deliver care for minor medical issues
that do not require direct intervention by the provider. A number of
processes have been developed and implemented across the Military
Health System and Air Force Medical Service to enhance access and
create more avenues for getting patients to the right level of care at
the earliest possible opportunity. Some of these programs include:
secure messaging email between patients and their primary care team;
opportunities for patients to be booked directly into certain specialty
care providers without first seeing their provider; and the TRICARE
Nurse Advice line which connects patients directly to a registered
nurse for advice.
LTG West. Army Medicine methodically reviews primary care manager
(PCM) clinical availability and productivity on a monthly basis. There
is an established process that requires hospital, region, and
headquarters approval for any non-standard activities that may take the
provider out of the clinic. Additionally, PCM availability is
summarized and briefed to the Deputy Commanding General for Operations.
This process occurs monthly in order to focus on PCM availability and
productivity which in turn improves access to primary care. Other
initiatives to improve access to care include simplified appointing to
reduce the number of appointment types, predictive tools to assess
patient demand, and standardized time keeping/coding practices to
ensure our providers are getting credit for the care they provide.
VADM Faison. Navy Medicine leads the MHS in access to care
performance, and our standards for performance exceed those for
appointment availability in the private sector. Provider productivity
does not impact access to care for Navy Medicine. In fact, provider
clinical experience is important to us as part of skills preservation
and sustainment for operational requirements.
Navy Medicine also leverages technology to increase patient
opportunities for care outside of the traditional patient visit
(virtual care). Navy currently leads the services with 51 percent of
patients enrolled to use our secure messaging platform, Relay Health.
In 2015, Navy patients sent 2.4 million secure messages to their health
care teams. This tool allows clinic teams to answer medical issues via
secure message that might otherwise have resulted in a clinic visit.
Navy also utilizes the Nurse Advice line as an enhanced access tool
available for our patients. In 2015, this tool allowed our patients to
make 132,870 calls to a registered nurse, 36.9 percent of those calls
resulted in a resolution to the patient's issue without an in-person
medical facility visit needed. These systems have a 97 percent patient
satisfaction: our patients like what we have done.
To ensure our providers have enough patients to both stay
productive and sustain clinical skills, Navy Medicine recently enacted
several recapture efforts based on the Patient Centered Medical Home
strategy and model of primary care. By increasing enrollment of
patients in our primary care clinics, we improve control of specialty
care referrals because we can direct these patients to stay within our
Military Treatment Facility (MTF). We also enjoy a contractual
relationship with the Managed Care Support Contractor network that
enables us to recapture network care that fits within the MTF
capabilities using a ``First Care Opportunity'' or ``Right of First
Refusal'' clause to redirect specialty care to a MTF, instead of
incurring purchased care expenses for a resource available in our
facility.
graduate medical education
13. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison,
which of your Graduate Medical Education (GME) programs directly
support COCOM operational medical force requirements? In other words,
which GME programs, to include internships, residency programs and
fellowship programs provide direct support to COCOM operational medical
force requirements?
Lt. Gen. Ediger. All of the Air Force GME programs either directly
or indirectly support COCOM medical operational force requirements. The
spreadsheet below provides a list of Tier 1 GME programs whose
graduates fill Unit Type Code (UTCs) that directly support COCOM
requirements. The remaining Tier 2 GME programs are required to
maintain accreditation of Tier 1 GME programs, fill required OCONUS
billets and deliver necessary health care to Department of Defense
(DOD) personnel who will support COCOM requirements.
Note a RED X in tier 2 denotes members with this skill set ready to
deploy in a Tier 1 position at all times.
LTG West. Current Army Graduate Medical Education (GME) physician
training programs constitute the near exclusive pipeline for physicians
providing direct COCOM support. The programs train physicians that
provide health care directly contributing to COCOM medical force
readiness by ensuring the readiness of the force and by developing the
clinical skills necessary for the provision of direct care to the ill
and injured for combat casualty care and humanitarian contingency
operations. These programs develop critical clinical competencies that
are fully aligned with the 31 August 2015 Joint Concept for Health
Services Joint Medical Capabilities. Training program throughput is
fully aligned with the Total Army Analysis sizing model operational
wartime requirements.
Most of these programs are conducted at Army military treatment
facilities that also provide direct health care to combat casualties.
These programs enhance hospital clinical capability and patient access
to emerging state of the art diagnostics and therapeutics. These
programs are also strategically placed to maximize opportunities for
full health care team training and permit leveraging of assets to
support co-located non-physician training programs (e.g., nursing,
dental, allied health, etc.).
Army Medicine hosted or sponsored residency programs that provide
direct support to COCOM operational force medical requirements include:
Aerospace Medicine; Anesthesiology; Dermatology; Emergency Medicine;
Family Medicine; General Surgery; Internal Medicine; Neurology;
Neurosurgery; Obstetrics-Gynecology; Occupational Medicine;
Ophthalmology; Orthopaedics; Otolaryngology; Pathology; Pediatrics;
Physical Medicine; Plastic Surgery; Preventive Medicine; Psychiatry;
Psychiatry/Internal Medicine; Diagnostic Radiology; and Urology.
Army Medicine hosted internship programs that provide direct
support to COCOM operational force medical requirements include:
general Transitional Year and designated Preliminary Transitional Year
training programs preceding full residency training in Dermatology,
Ophthalmology, Physical Medicine, Preventive Medicine, and Diagnostic
Radiology.
Army Medicine hosted or sponsored fellowship programs that that
provide direct support to COCOM operational force medical requirements
include: Adolescent Medicine; Critical Care; Blood Banking/Transfusion
Medicine; Critical Care Ultrasound; Emergency Medicine Subspecialties
(Austere & Wilderness Medicine, Cardiology, Emergency Medicine Services
& Disaster Medicine, Emergency Toxicology, Pediatrics, Sports Medicine,
Ultrasound); Family Medicine Subspecialties (Obstetrics, Psychiatry,
Gastroenterology/Colonoscopy, Hospitalist, Sports Medicine); General
Surgery Subspecialties (Colon/Rectal, Craniofacial, Pediatric,
Thoracic, Trauma/Critical Care, Vascular); Internal Medicine
Subspecialties (Cardiology, Gastroenterology, Hospitalist, Infectious
Disease, Nephrology, Pulmonary/Critical Care Medicine); Neurology
Subspecialties (Critical Care, Neuro-Ophthalmology); Neurosurgery
Subspecialties (Trauma/Critical Care, Pain & Functional, Pediatric,
Peripheral Nerve, Skull Base, Spine, Vascular); Obstetrics-Gynecology
Subspecialties (Female Pelvic Medicine & Reconstructive Surgery,
Maternal & Fetal Medicine); Occupational Medicine-Preventive Medicine;
Ophthalmology Subspecialties (Corneal/External Disease, Neuro-
Ophthalmology, Oculoplastic/Orbital, Pediatric, Retinal); Orthopaedic
Subspecialties (Adult Reconstructive/Total Joint, Sports Medicine, Foot
and Ankle, Hand, Musculoskeletal Oncology, Trauma, Pediatric, Shoulder
& Elbow, Spine); Otolaryngology Subspecialties (Facial Plastic/
Reconstructive, Head & Neck); Pain Management; Pediatric Anesthesia;
Pediatric Subspecialties (Cardiology, Critical Care, Infectious
Diseases, Neonatology, Pulmonary/Critical Care Medicine); Physical
Medicine Subspecialties (Sports Medicine, Traumatic Brain Injury);
Preventive Medicine-Occupational Medicine; Psychiatry Subspecialties
(Addiction, Child/Adolescent, Preventive Psychiatry); Radiology
Subspecialties (Musculoskeletal Imaging, Neuroradiology, Pediatric,
Vascular/Intervention); Sleep Medicine; Urology Subspecialties (Female,
General, Stone/Laparoscopy, Trauma Reconstructive).
VADM Faison. All Navy, joint and civilian clinical GME programs
attended by Navy Medical Corps personnel directly relate to the
provision of medical operational requirements. The importance of
maintaining quality control over physician training through our GME
programs is grounded in the diversity of the remote, austere, and
challenging environments in which our providers routinely operate in
contrast to locations where most graduates of civilian residency
programs will practice. The programs in support of operational
requirements fall under two categories - primary or secondary.
Primary programs refer to those for which Medical Manpower All
Corps Requirements Estimator (MedMACRE) classifies the billets as
operational. These include sea duty billets such as aboard an air craft
carrier, and remote land based billets such as Administrative Support
Unit Bahrain. In addition, it includes overseas billets as these
provide medical readiness support to forward-deployed military
personnel.
Secondary programs are those not in immediate support of the
readiness mission, but are in direct support of GME programs (required
for accreditation).
Examples of primary and secondary programs are as follows:
Primary: Internal Medicine Residency
Secondary: Internal Medicine Cardiology
Interventional Fellowship
Primary: Family Medicine Residency
Secondary: Family Medicine Faculty Development
Fellowship
Primary: Obstetrics/Gynecology
Secondary: Family Planning Fellowship
Obstetrics/Gynecology Urology
Fellowship
Primary: Pediatrics Residency
Secondary: Pediatric Endocrinology Fellowship
Pediatric Gastroenterology
Fellowship
All Navy GME programs are fully accredited by the American college
of Graduate Medical Education (ACGME), and 95 percent of our graduates
pass their board certification at the first sitting. This strong
approach to military physician training and GME allows us to assure
American families that the providers caring for their sons and
daughters, regardless of location, are among the best in the nation.
These future leaders of the operational medical force are well prepared
to save lives and protect health, which is a core responsibility of the
operational combatant commander.
14. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, how
many personnel in each Service are currently training in those direct
support programs?
Lt. Gen. Ediger. There are 859 Air Force trainees in Department of
Defense Graduate Medical Education (GME) programs.
LTG West. Approximately 75 Army medical officers are currently
training in a one year medical internship program. Army Medicine hosted
internship programs that provide direct support to COCOM operational
force medical requirements include the following programs and number of
Army officers currently in training: General Transitional Year (47),
and designated preliminary Transitional Year training programs that
precede full residency training in Dermatology (7), Ophthalmology (5),
Physical Medicine (3), Preventive Medicine (1), and Diagnostic
Radiology (12).
Approximately 1141 Army medical officers are currently training in
a medical residency program. Army Medicine hosted programs or sponsored
civilian residency training that provide direct support to COCOM
operational force medical requirements include the following programs
and number of Army officers currently in training: Aerospace Medicine
(19); Anesthesiology (14); Dermatology (27); Emergency Medicine (105);
Family Medicine (140); General Surgery (113); Internal Medicine (167);
Neurology (13); Neurosurgery (17); Obstetrics-Gynecology (75);
Occupational Medicine (5); Ophthalmology (22); Orthopaedics (97);
Otolaryngology (34); Pathology (29); Pediatrics (82); Physical Medicine
(15); Plastic Surgery (6); Preventive Medicine (8); Psychiatry (57);
Psychiatry/Internal Medicine (2); Diagnostic Radiology (63); and
Urology (30).
Approximately 160 Army medical officers are currently training in a
medical fellowship subspecialty training program. Fellowship training
is based on current mission critical needs of Army Medicine that in
part is driven by separations and retirements of previously trained
experts. Thus training is not conducted in every subspecialty every
year. Army Medicine hosted programs or sponsored civilian fellowship
training that provide direct support to COCOM operational force medical
requirements include the following programs and number of Army officers
currently in training: Adolescent Medicine (4); Critical Care (2);
Blood Banking/Transfusion Medicine (0); Critical Care Ultrasound (0);
Emergency Medicine Subspecialties (Austere & Wilderness Medicine (2),
Cardiology (0), Emergency Medicine Services & Disaster Medicine (3),
Emergency Toxicology (1), Pediatrics (2), Sports Medicine (1),
Ultrasound (3)); Family Medicine Subspecialties (Obstetrics (1),
Psychiatry (0), Gastroenterology/Colonoscopy (1), Hospitalist (1),
Sports Medicine (2)); General Surgery Subspecialties (Colon/Rectal (2),
Craniofacial (1), Pediatric (2), Thoracic (1), Trauma/Critical Care
(4), Vascular (6)); Internal Medicine Subspecialties (Cardiology (14),
Gastroenterology (19), Hospitalist (0), Infectious Disease (9),
Nephrology (2), Pulmonary/Critical Care Medicine (14)); Neurology
Subspecialties (Critical Care (1), Neuro-Ophthalmology (0));
Neurosurgery Subspecialties (Trauma/Critical Care (0), Pain &
Functional (0), Pediatric (0), Peripheral Nerve (0), Skull Base (0),
Spine (2), Vascular (0)); Obstetrics-Gynecology Subspecialties (Female
Pelvic Medicine & Reconstructive Surgery (4), Maternal & Fetal Medicine
(7)); Occupational Medicine-Preventive Medicine (0); Ophthalmology
Subspecialties (Corneal/External Disease (1), Neuro-Ophthalmology (0),
Oculoplastic/Orbital (0), Pediatric (1), Retinal (0)); Orthopaedic
Subspecialties (Adult Reconstructive/Total Joint (2), Sports Medicine
(2), Foot and Ankle (0), Hand (4), Musculoskeletal Oncology (0), Trauma
(0), Pediatric, Shoulder & Elbow (0), Spine (2)); Otolaryngology
Subspecialties (Facial Plastic/Reconstructive (1), Head & Neck (0),
Pediatric (1)); Pain Management (5); Pediatric Anesthesia (0);
Pediatric Subspecialties (Cardiology (0), Critical Care (2), Infectious
Diseases (1), Neonatology (5), Pulmonary/Critical Care Medicine (2));
Physical Medicine Subspecialties (Sports Medicine (0), Traumatic Brain
Injury (0)); Preventive Medicine-Occupational Medicine (2); Psychiatry
Subspecialties (Addiction, Child/Adolescent (7), Preventive Psychiatry
(0)); Radiology Subspecialties (Musculoskeletal Imaging (2),
Neuroradiology (4), Pediatric (0), Vascular/Intervention (2)); Sleep
Medicine (3); Urology Subspecialties (Female (0), General (0), Stone/
Laparoscopy (0), Trauma Reconstructive (0)).
VADM Faison. In fiscal year 2015, there were 991 Navy Medical Corps
personnel attending Navy, joint or civilian clinical GME direct support
programs.
15. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, are
there any direct support programs that could be eliminated from each
Service while maintaining the essential medical capabilities of the
Services to perform combat casualty care, higher echelon casualty care,
and humanitarian assistance?
Lt. Gen. Ediger. No.
LTG West. All current graduate medical education training programs
identified as providing direct COCOM support are fully aligned with
joint medical capability requirements outlined in the 31 August 2015
Joint Concept for Health Services. The Army Medical Department reviews
graduate medical education programs on an annual basis to assure
training meets clinical capability mission requirements. In addition, a
comprehensive Army Graduate Medical Education program review has been
initiated to further optimize graduate medical education alignment with
readiness, critical skills, and system for health priorities.
VADM Faison. No, all Navy, joint and civilian clinical GME programs
attended by Navy Medical Corps personnel relate to the provision of
medical operational requirements.
missed appointments
16. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, from
October 2014 through September 2015, there were over 1.6 million
scheduled appointments missed by all categories of beneficiaries.
Active Duty servicemembers missed over 700,000 of those scheduled
appointments. How much money did missed appointments cost your Service,
and ultimately the taxpayers, during this time period?
Lt. Gen. Ediger. Note that the number of patients seen as ``walk-
ins'' in Air Force primary care clinics exceeds the number of no-shows.
While the following calculation presents the value of appointments
equivalent to the number of no-shows, most of this capacity is utilized
to provide care for walk-in patients.
From October 2014 through September 2015, the potential cost of
beneficiaries missing their medical appointments is approximately $28M.
The data used to generate this estimate reflects fiscal year 2015
encounters for privileged providers only and excludes any dental
appointments. Methodology used to calculate potential cost of missed
medical appointments/no-shows:
Average Provider Aggregate Relative Value Unit (paRVU) per
encounter (x) Total number NoShows=Total Provider Aggregate Relative
Value Units (paRVU) NoShows
Provider Aggregate Relative Value Units (paRVU) NoShows (x) fiscal
year 2015 Prospective Payment System (PPS) cost=Value
This methodology uses a Prospective Payment System (PPS) value to
determine the ``value'' of the no show encounter. The PPS value is not
adjusted for geographic location. Additionally, this method does not
consider the impact of over-booking or filling vacated patient
appointments with walk-ins. The system does not permit tracking the
number of missed appointment slots which are booked by last minute
appointments or walk-ins. This method also does not take into account
opportunity costs, the true cost of delivering the care (vs. MEPRS
allocated cost) or the cost associated with delivering direct/indirect
care to support Active Duty (PHAs, MEBs, security clearance record
reviews) or the time providers and staff are required to spend outside
the healthcare delivery system (readiness training, leadership
activities, etc.).
LTG West. During the timeframe of October 2014 through September
2015 Army Medicine scheduled 9.6M appointments for all beneficiary
categories. Of those scheduled appointments, 591,500 or 6.2 percent
were recorded as a missed appointment. The estimated cost of a missed
appointment is approximately $204. Therefore we estimate the total cost
of missed appointments during fiscal year 2015 is $120.6M for all
beneficiaries. Army Medicine has made a concerted effort to decrease no
show rates. Our latest data shows improvement in this area. For the
twelve months ending in February 2016, our no-show rate decreased to
4.8 percent.
VADM Faison. No show rates for Navy Medicine are well below
civilian averages. In fiscal year 2015, Navy MTFs saw a total of 42.5
million patient encounters. During this period, the total percentage of
missed appointments when compared to the overall number of clinical
encounters was 3.77 percent. Civilian rates of patients failing to keep
appointments typically range from 6 percent to 30 percent, depending on
the type of patient population.
Our methods for attaining low no-show rates are a mixture of
patient reminders, phone call patient confirmations, patient engagement
by clinical staff, identifying high no-show patients, and use of a
beneficiaries' chain-of-command to reinforce the importance of
appointment attendance.
We aggressively work to fill missed appointments with walk-in
patients. These are patients who otherwise would have sought their care
in either an Emergency Room or in the network. This allows us to both
fully utilize our available appointments while decreasing costs for
Emergency Room and network care.
17. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, how
significantly do these missed appointments affect your ability to
provide timely care to other beneficiaries?
Lt. Gen. Ediger. The Air Force experiences a no-show rate of
approximately 5-7 percent, which is consistent with civilian industry.
Although this is not a significant percent of the care we schedule, it
does impact our patient's ability to schedule appointments. To mitigate
the impact of missed appointments and provide additional access,
clinics walk-in patients to take care of the most urgent needs as
quickly as possible. Note that the number of walk-in patients seen in
AF primary care clinics exceeds the number of no-shows.
LTG West. Each patient no-show impacts both the patient and the
system. Missed appointments can contribute to increased patient
dissatisfaction with the timeliness of care. Missed appointments impact
our ability to ensure readiness and positive outcomes for soldiers and
beneficiaries. No-show appointments also represent a lost opportunity
to provide healthcare services to beneficiaries and because they often
result in rescheduled appointments, they reduce overall appointment
availability and impact our ability to meet Access to Care standards.
Over the past 3 years, Army Medicine's no-show rate has reduced from
6.6 percent to 4.8 percent. We remain committed to working with line
leaders and educating patients on the negative impact that no-shows
have on the direct care system.
VADM Faison. Missed appointments/no-shows in Navy Medicine do not
significantly impact beneficiary access to care. This is evidenced by
the fact that no-show rates for Navy Medicine are well below the
civilian averages (i.e., 3.77 percent in Navy Medicine vs. 6 percent-30
percent civilian averages) and Navy Medicine's access to care
performance leads the Military Health System (e.g., Navy Medicine leads
all Services in third-next available appointments and average days to
be seen). We have no evidence that our low rate of missed appointments
impedes, in any way, timely access to care by our other beneficiaries.
18. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, what
are you doing to fix this important problem--a problem that hinders
access to care for all beneficiaries and wastes taxpayer dollars?
Lt. Gen. Ediger. To minimize the volume of missed appointments, Air
Force Military Treatments Facilities utilize an automated calling
system to remind patients of scheduled appointments. The Air Force
Medical Service also utilizes ``no-show posters'' as well as other
education tools to inform patients of the impact of missing
appointments. Some Military Treatment Facilities also send ``no-show''
letters to patients who miss their appointments to remind them of the
importance of making their scheduled appointments. The Air Force
Medical Service also educates patients on the benefits of the TRICARE
Online notification system, which after sign-up provides the patient
multiple notification options to include email and/or text.
LTG West. We are deeply involved in initiatives to reduce missed
appointments such as simplifying appointment cancellation procedures
and utilization of tools such as TRICARE Online which provides organic
email and text messaging appointment reminders directly to the
beneficiary. Our facilities also use telephonic appointment reminder
services that provide recorded reminder messages to our beneficiaries.
Finally, we actively partner with the leadership of our posts, camps,
stations and bases through community outreach efforts to ensure that we
educate the beneficiary population on the value of their care provided
at their medical treatment facility. In so doing we provide a
consistent message concerning the importance of keeping appointments or
cancelling them in a timely manner.
VADM Faison. No-show rates for Navy Medicine are well below
civilian averages. In fiscal year 2015, Navy Military Treatment
Facilities (MTFs) saw a total of 42.5 million patient encounters.
During this period, the total percentage of missed appointments when
compared to the overall number of clinical encounters was 3.77 percent.
Civilian averages of patients failing to keep appointments typically
range from 6 percent to 30 percent, depending on the type of patient
population.
Navy Medicine has achieved this success via Active engagement at
the local level and delegated to MTF leadership. Across our MTFs, staff
utilize a mixture of patient reminders, phone call patient
confirmations, patient engagement by clinical staff, identifying high
no-show patients, and use of a beneficiaries' chain-of-command to
reinforce the importance of appointment attendance. This strategy has
proven successful in achieving and sustaining no-show rates much lower
than those seen in the private sector.
medical headquarters staffing
19. Senator Graham. Dr. Woodson, we have data to show that total
medical headquarters staffing--military, civilian and contractor
personnel in the Defense Health Agency and the Services combined--is
over 12,000 persons.
Do you think this is the right number of headquarters staff? If
not, what is the right number of personnel required to manage the
military health system?
Dr. Woodson. Thanks for the opportunity to clarify this
misconception that all 12,000 members of the DHA are categorized as
``headquarters staff.'' In the DHA, we have about 9000 personnel
working in the military treatment facilities at Walter Reed and Ft
Belvoir, providing healthcare directly to patients. We have about 2600
personnel working in consolidated shared services in ten functional
areas, providing support directly to the Army, Navy, and AF military
treatment facilities located around the world. In addition, the DHA has
absorbed a number of organizations such as the Armed Forces Medical
Examiner System (AFMES), DOD Medical Examination Review Board
(DODMERB), Medical Education & Training Campus (METC), and Defense
Center of Excellence (DCoE), which formerly were Executive Agencies and
also provide enterprise support to the Services' medical missions. We
expect that additional organizations will be absorbed into DHA in
fiscal year 2017 and fiscal year 2018. The DHA has dedicated resources
to assessing its manpower requirements as a result of these
consolidations. We will continue to identify manpower reductions, while
maintaining the high quality expected of military healthcare.
20. Senator Graham. Dr. Woodson, should DOD further shrink medical
headquarters staffs through additional consolidation of the
headquarters functions of the DHA and the Services? If not, why not?
Dr. Woodson. Yes, we need to be constantly looking for ways to
improve efficiency and eliminate unproductive duplication and
variation. Realistically, there is a limit on how much change can be
implemented quickly without risking breakdowns. There is clearly more
to do.
tricare medical support contracts
21. Senator Graham. Dr. Woodson, why were the requirements for the
next round of TRICARE medical support contracts based on a non-risk
bearing contracting strategy that purchases medical services and
procedures, instead of a risk-bearing contract strategy that purchases
improved health outcomes and higher patient satisfaction?
Dr. Woodson. TRICARE Medical Support Contracts are considered to be
risk-bearing contracts. The T-2017 contract makes a number of important
changes to how the Military Health System delivers care, including
improvements to beneficiary experience and the measurement of quality,
and holds the contractors responsible for these outcomes. In addition
the National Trend Incentive provides a financial incentive for
performance. We are also developing and implementing a number of value-
based care demonstrations which place providers at risk for quality
outcomes and efficiency, and anticipate these will continue to expand
during the life of the T-2017 contract. Our goal is to have 80 percent
of all MHS private sector healthcare expenditures be tied to quality
and efficiency by 2020, and to integrate this effort with the direct
care system. Thus by the end of the T-2017 contract, we anticipate that
most of our expenditures will be based on outcomes, not volume. We
believe this is the best approach to ensure our beneficiaries have
great access to outstanding care, and that our scarce resources are
used in the most efficient and effective way possible.
healthcare costs
22. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison,
military hospitals and clinics produce inpatient/outpatient workload at
costs about 50 percent higher than what it would cost if those services
were purchased in the private sector.1 Why does it cost more to provide
health care services in military hospitals than it cost to purchase the
same services in the private sector?
Lt. Gen. Ediger. The Military Health System provides medical
capabilities, not just a medical benefit associated with providing
direct care. The AFMS provides the Nation with Medically Ready Airmen,
medical support to the nuclear mission, Bioenvironmental Engineering
and Public Health, and a trained medical force ready to save lives in
garrison as well as in expeditionary settings.
1) Maintaining Medically Ready Airmen and providing the care
necessary to our Active Duty force consumes about 16 percent of our
budget. This averages out to about $181 per Direct Care visit vs the
$131 to purchase their care (doesn't include the overhead costs paid to
the Managed Care Support Contractors to administer the benefit). This
is closer to a 28 percent difference, which we continually work to
decrease by improving health through Medical Home initiatives,
preventive medicine, and performance management in order to gain
efficiencies where the mission allows.
2) Graduate medical and dental education, education and training,
and Phase II Training programs account for 2 percent of the total
costs.
3) Support for the AF's Mission includes provision of
environmental, industrial, and occupational health via Bioenvironmental
Engineering and Public Health programs, as well as direct support
provided to AF Line units outside of providing the peacetime health
benefit to include the Personnel Reliability Program and Dover Mortuary
Support, which accounts for 9 percent of costs.
4) We maintain overseas military hospitals and Military Treatment
Facilities (MTFs) to provide a US standard of care in countries where
we maintain a military presence; this accounts for 12 percent of our
budget.
Reimbursements from private insurance payers are not considered,
which would decrease the cost of care provided within an MTF by
approximately 11 percent if considered.
In summary, the total cost of these mission-essential capabilities
account for about 39 percent of our total budget. Although there is
some overlap in providing the care to ensure Medically Ready Airmen,
the costs of ensuring a medically ready and trained force, direct
support to the AF Mission and support to MTFs have not been effectively
carved out of the cost allocation, because they are interrelated and
dependent. A simple 50 percent cost comparison does not fully account
for the fact that almost 40 percent of our total budget is allocated
towards supporting the total readiness of the medic, warfighter
readiness, and the health of our installations.
LTG West. Actually, the Army is able to provide inpatient hospital
services at a lower cost than most private sector hospitals. Analysis
of fiscal year (FY) 2015 Army inpatient care and its inpatient
supporting services reflect the Army inpatient cost-per-stay
(disposition) is $11,528.10. Published research of hospital inpatient
costs demonstrates a wide variation of civilian inpatient costs. The
range of civilian inpatient cost-per-stay, inflation adjusted for 2015,
is between $11,557 and $17,562 per stay nationally for civilian
hospitals. The Army inpatient cost per stay compared to civilian
inpatient cost per stay, therefore is less expensive by 0.3 percent to
52.3 percent.
Army outpatient services include emergency services, outpatient
surgery, outpatient ancillary services, and professional primary care
and specialty care encounters. Analysis of fiscal year 2015 Army
outpatient care (excluding dental) and its supporting outpatient
services reflect the Army outpatient services average cost per
encounter is $237.03 and the Purchased Care average cost of a paid
claim is $154.60. The Army average cost per encounter variance is
$82.43 or 53 percent higher. The Army cost is higher due to functions
not performed by Purchased Care practices such as ``readiness of the
force'' activities (e.g. soldier readiness processing activities,
Integrated Disability Evaluation System processes, flight medicine, and
other similar functions). Additionally, Army hospitals/clinics are
required to provide programs and functions affecting the Active Duty
family member that include Early Interventional Program and Exceptional
Family Member Programs, and respond to infectious disease threats.
These types of programs occurring in the civilian sector are normally
managed by state organizations. The medical treatment facility
responses in these situations contribute to the overall readiness of
the force and a higher average cost per encounter ratio.
VADM Faison. It is not possible to accurately compare the Direct
Care system (i.e., care delivered in military treatment facilities) to
care delivered in the private sector. Navy Medicine is a rapidly
deployable, fully integrated medical system and this is what sets us
apart from civilian medicine. Our direct care system serves as the
readiness and surge platform for our providers and is critical to
sustaining the vital skills and clinical competencies for our medical
force.
Additionally, the range of costs for the same surgical procedure in
the private sector can vary widely, making it difficult to equate to
procedures performed in the direct care system. In the Federal Health
Care Benefit, Blue Cross costs more than Kaiser Permanente--an HMO. Of
course HMOs control costs with limited choice in doctors, specialists,
high co-pays and limits on access to care. These same tools are not
used in the military health care system in order to ensure choice,
provide high quality care, and maximize access for our Active Duty
servicemembers, retirees, and dependents as part of the TRICARE
benefit.
Finally, Direct Care costs include the cost of readiness. We
understand there is a desire to separate out these costs, and we are
working towards a solution. Our goal in Navy Medicine is to provide
exceptional value to those we serve by ensuring superior health
outcomes through the safest and highest quality care, convenient
access, full and efficient utilization of our services, and lower care
costs.
23. Senator Graham. Lt. Gen. Ediger, LTG West and VADM Faison, what
is the cost of readiness?
Lt. Gen. Ediger. The cost of readiness in fiscal year 2017 is
forecasted to be $5,487,586,000, which includes healthcare operations
as well as salaries for Air Force medical personnel. Not included in
this total are funds associated with modernization of facilities and
equipment, Medicare Eligible Retiree Health Care Fund receipts, and
Private Sector Care costs attributable to Active Duty Air Force and
their dependents.
LTG West. The cost of readiness within the Army's Defense Health
Program (DHP) appropriation is approximately $7.32 billion annually.
This cost accounts for 61.7 percent of the total funding received by
the Army within the DHP.
VADM Faison. Navy Medicine is a rapidly deployable, fully
integrated medical system and this is what sets us apart from civilian
medicine. It exists to support readiness and the operational missions
of both the Navy and Marine Corps. In the context of the cost of
readiness, we must recognize that fundamentally readiness includes the
costs of keeping sailors, marines and their families healthy and
medically ready to deploy. Our direct care system serves as the
readiness platform for our providers and is critical to sustaining the
vital skills and clinical competencies for our medical force.
The cost of readiness encompasses multiple factors that fall
outside of the scope of Navy Medicine. In considering the complex
nature of how this estimate would be derived, a number for the cost of
readiness cannot be determined at this time. In conjunction with DOD,
DHA, and the other Services (as per the Deputy Secretary of Defense
memorandum of 14 Dec 15), we are working towards a solution that begins
to inform this effort. The development of the Essential Medical
Capabilities across the services will provide a uniform standard that
will help support the development of a model for the cost of one
component, medical force readiness. This will also align Navy Medicine
with how the Navy line estimates the cost of their readiness.
medical staff contracting
24. Senator Graham. VADM Bono, what are your thoughts on a
capability-based, outcomes-driven contracting model for contracted
medical services rather than the present focus on ``piece-meal''
staffing augmentation? Has DHA considered implementing such a model? If
so, what is the status? If not, why not?
VADM Bono. Contracted medical services purchased to augment
military treatment facilities have not traditionally used an outcomes-
driven contracting model for several reasons. First, this model
requires that the contractors have control of the factors that enable
them to meet or exceed the Government's outcome goals. Contracted staff
members supplement military and civilian staffs in providing care and
are integrated into provider and support teams. The contractor is not
in control of the hospital's productivity schedule and associated
support functions of laboratory, pharmacy, health information
technology that would allow it to achieve an outcomes-driven model.
Second, the augmentation model allows maximum flexibility for military
treatment facilities to fill vacancies associated with deployments and
other staffing gaps and to add staff in case of national emergencies
without affecting or altering military or civilian positions. Patient
care can continue in the facilities and, when military or civilian
health care workers become available, contracts can be reduced at the
Government's option. Finally, this model supports a robust the small
business health care staffing industry. According to the Federal
Procurement Data System, the military spent over $1.3B in fiscal year
2015 on direct health care services using small business providers that
are capable of finding, hiring and staffing these positions.
DHA currently implements an outcomes-driven staffing model in two
National Capital Region facilities--the Dumfries and Fairfax Health
Centers. According to GAO, these two clinics represented 23 percent of
contract health care professionals in the National Capital Region in
fiscal year 2011. These clinics represent an effective use of an
outcomes-driven contracting model where the contractor has full control
of the staffing and provision of ancillary services.
To date, DHA has not considered segregating functions within its
military treatment facilities for outcomes-driven contracting because
doing so would involve changing hospital military and civilian staffing
models, which could affect the readiness and training missions of the
facilities. The inability to split ancillary support services between
contractor and Government-run operations could result in the
contractor's inability to meet contractual metrics and result in
requests for equitable adjustment. Finally, the augmentation model
provides the required flexibility while supporting robust Small
Business contracting opportunities for the Department of Defense.
__________
Questions Submitted by Senator Kirsten E. Gillibrand
aba therapy for autism
25. Senator Gillibrand. Dr. Woodson, when I asked you about the
proposed changes in reimbursement rates for Applied Behavior Analysis
(ABA) therapy, you stated that DHA ``commissioned two outside studies
that confirmed we were overpaying.'' I have reviewed these studies, and
I'm concerned that the studies found dramatically different
reimbursement rates from each other. Yet, you selected one set of
reimbursement rates, the Medicaid plus 20 percent rate, seemingly at
random. How do you justify your selection of the Medicaid plus 20
percent rate?
Dr. Woodson. By statute, all TRICARE reimbursement rates mirror
Medicare rates to the extent practicable. Because Medicare has not set
rates for ABA services, we had to use an alternative method of
calculating rates. If and when Medicare rates are established, those
rates will be immediately adopted, so it is crucial the calculation
formula chosen to determine the rates be based on data that can be
positively confirmed and approximates the likely future Medicare rates
to the greatest extent possible. This approach is most fair to all
providers. The adopted rate calculation process ensures establishment
of ABA rates based on external studies, a consistent and fair
calculation process for all localities, an annual review of the rates
like all other TRICARE rates, an approach that approximates future
Medicare rates, and rates adjusted for the 89 geographic areas that are
recognized by Medicare.
Kennell provided us with four different possible approaches to
setting rates, some of which did include commercial rates. The National
Rate option chosen was determined to be the best predictor of where
Medicare rates will eventually be set. This option was based on
adjusting the average Medicaid rates to calculate a ``predicted''
Medicare rate. On average, the Medicare rates are about 22 percent
higher than Medicaid rates for a sample of the three highest-volume
individual mental health service codes. This selected methodology was
not chosen at random, but chosen to provide a consistent calculation of
rates for all localities based on rates that can be positively
confirmed by each State versus trying to use commercial rates, which
are proprietary and vary greatly due to different billing codes, types
of Plans (HMO, PPO, indemnity, etc.) and types of providers.
The intent of the 2016 reimbursement rates is to align the ABA
reimbursement rate methodology with that used annually for all other
TRICARE rates generally, to include locality adjustments, while
ensuring excellent access for our beneficiaries and a very competitive
rate for TRICARE providers. This action results in the rates being
reviewed and appropriately adjusted each year, like all other TRICARE
rates, and not frozen for another 7-year period.
The current rates we are replacing have been used for over 7 years,
with no change, and with the same rate paid in all locations, unlike
all other TRICARE, Medicare, and commercial rates which are adjusted
for each geographic locality. The current rates were arbitrarily set in
2008 under the Extended Care Health Option Enhanced Access to Autism
Services Demonstration Program, which was designed as educational, not
medical, and was open to Active Duty Family Members only. The current
rates were never intended to set the standard for a medical benefit
since they were not based on any study of the nationwide rates. The
revised rates make ABA reimbursement more consistent with the basic
TRICARE benefit used for all other TRICARE services.
The RAND Corporation's study was the first study commissioned as
discussed with the autism advocates and providers. Both groups fully
supported using RAND. That study provided calculations of the
``average'' reimbursement rates for ABA services. The researchers
calculated the average rates by developing weighted averages of
Medicaid and private insurance payments in each state for which data
were available. RAND's report found Medicaid and commercial rates to be
very similar in many states.
RAND's study was very well researched and prepared, but multiple
changes were subsequently made across the nation as the States adopted
or adjusted their autism programs and rates. For that reason, we
commissioned the Kennell and Associates, Inc., study to collect more
current data while still incorporating data from the RAND study as
appropriate. Thus, the Kennell study can be seen as an update and
expansion of the RAND study. Based on the two studies, Kennell proposed
four options for setting ``National Rates.'' The National Rates are
adjusted to calculate the locality rate for each of Medicare's 89
localities. We and the Kennell team worked closely with the RAND
researchers to further research several data points needed to establish
rates.
(1) The RAND report did not include data for providing one-on-one
ABA services by doctoral or master's level providers (billing codes
0364T and 0365T) or for family adaptive treatment guidance (code
0370T). Billing codes 0364T and 0365T are the codes most often used as
they are billed when providing one-on-one services to the child.
Kennell added data for these additional services which are very
important to our beneficiaries.
(2) The RAND report used Medicaid data collected in late 2014 or
early 2015. Since that time, many states either adopted or adjusted
rates. We are currently adjusting the rates again based on 11 more
states, for a total of 35, having adopted or adjusted Medicaid rates
since October 2015.
(3) For one-on-one direct ABA services, RAND did not provide rates
for bachelor's degree providers separate from those with less than a
bachelor's degree. The TRICARE benefit is based on the ``tiered
model,'' allowing services from doctoral and master's level behavior
analysts and supervised bachelor's level assistant behavior analysts
and behavior technicians. Thus, Kennell added these rates.
(4) The commercial rates obtained by RAND paid for direct, one-on-
one ABA services, by type of provider, are currently not available
because the MarketScan data used by RAND does not distinguish between
the four ABA provider types. Thus, any average rate paid by commercial
plan would tend to understate rates paid to doctoral and master's level
behavior analysts and overstate rates paid to supervised bachelor's
level assistant behavior analysts and behavior technicians. This is a
problem for services like direct, one-on-one ABA that are provided by a
broad range of provider types, especially because the rates often vary
substantially by type of provider.
26. Senator Gillibrand. Dr. Woodson, the Medicaid plus 20 percent
rates are significantly lower for bachelors level and high school level
ABA therapy providers than the current rates. For example, bachelors-
level providers would be paid $15 less per hour than they currently
earn. How do you justify such a significant cut in reimbursement?
Dr. Woodson. The revised rates were calculated to reimburse the
four provider types (e.g., doctoral and master's level behavior
analysts and supervised bachelor's level assistant behavior analysts
and behavior technicians) at rates appropriate for their education and
based on two studies of the nationwide rates for ABA services. The
current rates were not set based on a study of the rates when they were
adopted 7 years ago. The current rates were set in 2008 under the
Extended Care Health Option Enhanced Access to Autism Services
demonstration program as an educational program, not medical, for
Active Duty Family Members only. The current rates were never intended
to set the standard for a medical benefit, since they were not based on
any study of nationwide rates. The two recent studies were completed to
formally establish a reliable, competitive rate methodology that
applies to all locations, with rates calculated for each locality and
annually adjusted like all other TRICARE rates. This rate methodology
will be used until Medicare establishes ABA rates, which by law,
TRICARE will immediately adopt.
The 2016 ABA rates (recalculated this week based on 11 more states
adopting or adjusting their rates since October 2015) reimburse
bachelor's level assistants for one-on-one services with a range of
$63.76 - $91.56 per hour, compared to the current $75.00 per hour. No
rate is being reduced by $15.00 or more for bachelor's level assistants
and some will actually see an increase. Overall, the ABA rates are
consistent with those paid to other mental health providers with
similar levels of training. There are no other bachelors level
providers reimbursed for mental health services; however, we can
compare rates paid to masters and doctoral level ABA providers with
those paid to other doctoral level mental health providers. As a
comparison, the revised 2016 ABA rates pay a range of $106.26 to
$132.60 per hour for doctoral and master's level providers. These rates
are actually above what doctoral clinical psychologists are paid
nationwide for individual psychotherapy 60-minute sessions (range from
$93.00 to $105.00). Based on the external studies we commissioned, as
well as comparable rates in other mental health fields, we continue to
conclude the revised 2016 ABA rates are very competitive.
27. Senator Gillibrand. Dr. Woodson, you also stated that ``to
ensure that in fact we won't negatively impact services, we reviewed
network adequacy almost on a monthly basis and certainly very
frequently. We'll be monitoring this situation very closely. Should we
find, in fact, in any locality that has been adversely affected, we
will make rapid changes.'' How have you been tracking access to and
availability of ABA services?
Dr. Woodson. My Autism Team meets at least twice per month with our
three TRICARE Regional Offices and the Managed Care Support Contractors
(MCSCs). During each of the calls, the MCSCs provide a summary of the
beneficiary waiting lists, if any, and the status of their provider
networks. Historically, the concept of ``wait lists'' has been a
concern as providers report long waiting lists, when in actuality; most
beneficiaries have found other providers and are not subsequently
removed from the wait list. The team discusses the localities of
concern based on the waiting list or any pending provider loss due to a
clinic closing for any reason (e.g., provider relocation, retirement,
etc.). The Military Services' ``Exceptional Family Member Program''
representatives also join the conference call to ensure they remain
abreast of the available providers and to report any problems they have
heard from beneficiaries regarding access to ABA services. To date, our
MCSCs have been very successful placing the children on waiting lists
with other providers, although some parents choose to wait for
particular provider or specific time of day for services.
The TRICARE network of providers is robust overall; however, there
are some areas in the country with a limited number of providers
similar to many other specialties, such as Alaska, parts of Georgia,
Southern California, Seattle-Tacoma, Ft. Leonard Wood, Missouri, and
Ft. Riley, Kansas. These are areas with very few providers in the
community, and access in these areas is challenging whether the child
has commercial insurance, Medicaid, or TRICARE. TRICARE's three MCSCs
are continuously working to recruit new ABA providers for underserved
areas to improve access. For example, our MCSCs have successfully
recruited additional providers to Ft. Leonard Wood, Missouri; Luke Air
Force Base, Arizona; Southern California; the Gulf Coast (i.e., Biloxi,
Mississippi to Tampa, Florida); Ft. Campbell, Kentucky; and many other
locations, which benefit all children in the community, not just those
with TRICARE. We currently have over 23,500 ABA providers, including
over 450 new providers since the new rates were released.
Most importantly, please know that we are committed to ensuring
every military child with the Autism Spectrum Disorder (ASD) diagnosis
has access to the care they need, including ABA. The TRICARE MCSCs will
always use the network providers whenever possible to enhance that
relationship with ``our'' provider network partners and be most cost
efficient. However, if a network provider is not available, the MCSCs
will arrange for care with non-network providers until a network
provider is available. This is the same process used to locate
providers for all TRICARE Prime enrollees needing a specific provider
of any type.
28. Senator Gillibrand. Dr. Woodson, based on the reviews you have
completed on network adequacy, have you seen any issues with access to
ABA therapy and if so, what kind of issues?
Dr. Woodson. The TRICARE network of providers is robust; however,
there are some areas in the country with a limited number of providers
whether the child has commercial insurance, Medicaid, or TRICARE. In
particular, there are a limited number of ABA providers around military
installations in Alaska, parts of Georgia, Southern California,
Seattle-Tacoma, Ft. Leonard Wood, Missouri, and Ft. Riley, Kansas.
TRICARE's three Managed Care Support Contractors (MCSCs) are
continuously working to recruit new ABA providers for underserved areas
to improve access. For example, our MCSCs have successfully recruited
additional providers to Ft. Leonard Wood MO, Luke Air Force Base AZ,
Southern California, the Gulf Coast (Biloxi MS to Tampa FL), Ft.
Campbell KY and many other locations, which benefits all children in
the community, not just those with TRICARE. We currently have over
23,500 ABA providers, including over 450 new providers who have joined
TRICARE since the new rates were released on December 3, 2015.
Most importantly, please know that we are committed to ensuring
every military child with the Autism Spectrum Disorder (ASD) diagnosis
has access to the care they need, including ABA. The MCSCs will always
use the network providers whenever possible to enhance that
relationship with ``our'' provider network partners and be most cost
efficient. However, if a network provider is not available, the MCSCs
will arrange for care with non-network providers until a network
provider is available. This is the same process used to locate
providers for all TRICARE Prime enrollees needing a specific provider
of any type.
As a last resort, for areas chronically underserved by ABA
providers, the military Services also carefully work the assignments
for Active Duty servicemembers with children needing ABA services to
ensure they are not transferred to a location with services limited or
not available. The military Services can also transfer a family with a
newly diagnosed child needing ABA services (or any other specialty
service), to another location if necessary to ensure the needed
services are available.
While our contractors deserve a lot of credit for their recruitment
efforts, another factor contributing to our robust ABA provider network
is that the TRICARE benefit is one of the best in the nation. That is
especially true since providers never have to collect a copayment,
deductible, or any other payment from Active Duty families, who have
100 percent coverage. Our TRICARE beneficiaries, to include our retired
beneficiaries, do not have to make a decision on whether to forego
needed care due to affordability, unlike most Americans who may owe
copayments or a cost share for each service received.
29. Senator Gillibrand. Dr. Woodson, how do you intend to quickly
and robustly respond to any indications that children are losing access
to needed ABA therapy?
Dr. Woodson. Most importantly, please know that we are committed to
ensuring every military child with the Autism Spectrum Disorder (ASD)
diagnosis has access to the care they need, including ABA. The TRICARE
Managed Care Support Contractors (MCSCs) will always use the network
providers whenever possible to enhance that relationship with our
provider network partners and be most cost efficient. However, if a
network provider is not available, the MCSCs will arrange for care with
non-network providers until a network provider is available. This is
the same process used to locate providers for all TRICARE Prime
enrollees needing a specific provider of any type.
The military Services also carefully work the assignments for
Active Duty Service members with children needing ABA services to
ensure they are not transferred to a location with services limited or
not available. This applies to both families needing ABA services or
any other specialty care for a family member. The military Services can
also transfer a family with a newly diagnosed child needing ABA
services (or any other specialty service), to another location if
necessary to ensure the needed services are available.
As a result, although I do not anticipate any loss of access to ABA
services, we stand ready to respond quickly to ensure every child has
an ABA provider.
echo benefit
30. Senator Gillibrand. Dr. Woodson and VADM Bono, I have heard
from advocates that military families who are eligible for MEDICAID
services have to reapply for MEDICAID benefits every time they move to
a new state, and many encounter waiting lists that are longer than
their assignments. To address this, the Military Compensation and
Retirement Modernization Commission recommended that the Extended Care
Health Option (ECHO) benefit be expanded to provide benefits similar to
the MEDICAID benefit. What steps have you made to implement this
recommendation?
Dr. Woodson. and VADM Bono. We believe that providing effective
support for military members with family members who have special needs
improves beneficiary satisfaction and supports overall readiness. In
collaboration with the Military Compensation and Retirement
Modernization Commission (MCRMC) research team, the Defense Health
Agency (DHA) developed five goals related to the Commission's
recommendations: (1) identify gaps between current ECHO provided
services and MEDICAID waiver programs; (2) evaluate the expansion of
ECHO respite care and the provision of incontinence supplies (e.g.,
adult diapers); (3) conduct an investigation into the requirements for
providing custodial care; (4) identify those MEDICAID waiver services
that would create value for ECHO beneficiaries; and, (5) identify
requirements and costs associated with a consumer directed care
program. The DHA has already implemented a policy change to allow ECHO
beneficiaries to receive personal incontinence supplies. This benefit,
which became effective on October 1, 2015, is available to any ECHO
beneficiary over age 3 who is incontinent as a result of spinal,
neurological, or mobility issues. Working with the MCRMC research
group, we are also continuing with an assessment of gaps between ECHO
and state MEDICAID waiver programs which provide non-medical services
for individuals who would otherwise be institutionalized. We have also
worked side-by-side with the MCRMC group to investigate custodial care
and consumer-direct care, analyzing the requirements and potential
costs by collaborating with civilian health experts and federal
programs that currently offer these benefits. We will use this
information to conduct a survey (scheduled for June 2016) to better
ascertain beneficiary needs and determine which MEDICAID services would
bring value to ECHO beneficiaries. The results of this survey will
shape future ECHO benefit revisions.
lab developed tests
31. Senator Gillibrand. Dr. Woodson, in 2014, this committee gave
you the authority in the Fiscal Year 2015 National Defense
Authorization Act to cover emerging health care services and supplies,
including Lab Developed Tests (LDTs) when ordered by physicians in the
civilian provider network. These tests play a critical role in the
diagnosis and treatment of disease, and include tests for Fragile X
syndrome, Cystic Fibrosis, Spinal Muscular Atrophy, and many common
cancers. What has DHA done to implement this authority?
Dr. Woodson. Prior to the Fiscal Year 2015 National Defense
Authorization Act that allowed authority to cover emerging health care
services and supplies, the Defense Health Agency initiated a
demonstration project on September 4, 2014, to evaluate non-FDA
approved LDTs for TRICARE coverage. Utilizing this separate
demonstration authority, the project was started to evaluate the
feasibility of establishing a cost-effective and efficient way to
review non-FDA approved LDTs. Since the demonstration began 73 LDTs are
now covered, to include tests for cancer diagnosis, cancer risk, cancer
treatment, blood or clotting disorders, genetic diseases or syndromes,
and neurological conditions. Tests for Fragile X syndrome, Cystic
Fibrosis and Spinal Muscular Atrophy are specifically covered. As of
February 15, 2016, 101,340 beneficiaries have had LDTs completed under
the demonstration and over $49M in claims have been paid.
Section 704 of the NDAA for fiscal year 2015 provided the DOD with
authority to extend provisional TRICARE coverage for an emerging
healthcare service or supply. The ASD(HA) may authorize provisional
coverage if the service or supply is widely recognized in the U.S. as
being safe and effective but it does not yet meet the TRICARE standard
for proven effectiveness. Surgical treatment for Femoroacetabular
Impingement Syndrome (FAI) is the first emerging treatment to be given
provisional coverage under the authority in Section 704. The Defense
Health Agency (DHA) is currently evaluating several other potential
treatments and technologies for provisional coverage focusing on those
being done in Military Treatment Facilities but not covered by TRICARE.
The DHA has engaged with Service consultants, specialty leaders, and
clinical subject matter experts to assist in the evaluation process. A
public announcement will be made when additional emerging treatments
and technologies are approved for provisional coverage.
32. Senator Gillibrand. Dr. Woodson, DHA announced a demonstration
project, to begin in September 2014, to evaluate laboratory developed
tests (LDTs) for coverage by the TRICARE program. However, LDTs that
have been approved for coverage by the demonstration project still
remain on the No Government Pay Procedure Code List with no indication
that they have been approved for coverage. Why are these tests still on
the government no-pay list?
Dr. Woodson. The specific LDTs that are covered by TRICARE under
the LDT demonstration are listed in the TRICARE Operations Manual,
Chapter 18, Section 17, and easily accessible to the public. Codes for
LDTs payable under the demonstration are still listed on the No
Government Pay Procedure Code List (NGPL) because these non-FDA
approved LDTs are not covered under the TRICARE Basic Program. The fact
that a demonstration-approved LDT remains on the NGPL is specifically
discussed in Section 17 and should have no adverse impact on
reimbursement under the demonstration.
Through meetings and letters, we have explained to the American
Clinical Laboratory Association and our lab partners why LDT codes
covered under the demonstration are on the NGPL and where to find the
specific LDTs that have been approved for coverage under the
demonstration. Codes that appear on the NGPL list are there because
TRICARE statute, regulation, or policy has established that procedure
as excluded under the TRICARE Basic Program. The NGPL does not
represent an exhaustive list of all services that may be denied under
the Basic program. Conversely, the fact that a code is not listed does
not imply or guarantee coverage. It is critical to utilize the TRICARE
statute, regulation, and policy as the authoritative sources of TRICARE
coverage and benefit policy, not the NGPL. In addition, there may be
other policy and special program provisions such as demonstration
programs and the Extended Care Health Option program that affect listed
codes, coverage, and reimbursement. Explicit processes within the
TRICARE system allow specific codes to be paid under these special
programs even though they appear on the NGPL.
33. Senator Gillibrand. Dr. Woodson, under the demonstration
project, why has DHA established exceedingly burdensome prior
authorization requirements for tests? While appropriate in some
circumstances, prior authorization is not standard practice for tests.
In the best of circumstances, completing the prior authorization
process takes a week or more. Meanwhile, other payers--including
Medicare--automate their medical necessity determinations through
coverage decisions that allow claim adjudication decisions based on
diagnosis codes, whether LDTs are involved or not.
Dr. Woodson. With the exception of preconception and prenatal
Cystic Fibrosis (CF) carrier screening, prior authorization is required
for LDTs covered under the demonstration. Prior authorization protects
the beneficiary, provider, and laboratory by ensuring the requested
test meets the clinical criteria for coverage under the demonstration
and the claim paid. TRICARE's contract partners have created processes
to facilitate the prior authorization process for providers and
laboratories. Prior authorization is a standard process throughout the
health industry for many LDTs.
The Centers for Medicare and Medicaid Services National Coverage
Policies for common laboratory tests utilize ICD-10 diagnoses codes for
automated adjudication of claims. TRICARE also uses the same process
for many common laboratory tests. However there is a distinction
between routine laboratory tests and LDTs. LDTs are handled differently
because they are only recognized for TRICARE coverage under the
demonstration. Also LDT results play a critical role in the diagnosis
and treatment of diseases such as cancer and genetic syndromes that
cause developmental delays or cardiac abnormalities. Prior
authorization ensures the requested LDT is being used appropriately
within the published coverage criteria.
We acknowledge there were difficulties at the beginning in
execution of the demonstration project but our Managed Care Support
Contractors (MCSCs) through their continued efforts have tried to make
the prior authorization process as simple and easy as possible. We have
encouraged our lab partners to work with the MCSCs to address prior
authorization concerns and make recommendations for process
improvements.
This demonstration was started to evaluate the feasibility of
establishing a cost-effective and efficient way to review non-FDA
approved LDTs. Prior authorization will be one of the processes
evaluated. The DHA wants to find the right balance in ensuring
requested LDTs are medically necessary and appropriate and having as
streamlined a process as possible from ordering to claim reimbursement.
APPENDIX A
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