Military Personnel: Military Departments Need to Ensure That Full
Costs of Converting Military Health Care Positions to Civilian	 
Positions Are Reported to Congress (01-MAY-06, GAO-06-642).	 
                                                                 
Based on studies showing that many military members are 	 
performing tasks that are not considered military essential, the 
Air Force, Army, and Navy have plans to convert certain numbers  
of military health care positions to civilian positions.	 
Questions have surfaced regarding the potential effects of these 
conversions on the Defense Health Program. The National Defense  
Authorization Act for Fiscal Year 2006 prohibits the military	 
departments from performing any further conversions until the	 
secretary of each department certifies to Congress that the	 
conversions will not increase costs or decrease quality or access
to care. The act also requires GAO to study the military	 
departments' conversions and their potential effects.		 
Specifically, GAO examined (1) the military departments' plans	 
for and actions to date in converting military health care	 
positions to civilian positions and the departments' experiences 
in filling the converted positions with civilians and (2) the	 
potential effects of converting military health care positions to
civilian positions on the Defense Health Program.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-642 					        
    ACCNO:   A52799						        
  TITLE:     Military Personnel: Military Departments Need to Ensure  
That Full Costs of Converting Military Health Care Positions to  
Civilian Positions Are Reported to Congress			 
     DATE:   05/01/2006 
  SUBJECT:   Civilian employees 				 
	     Cost analysis					 
	     Health care costs					 
	     Health care personnel				 
	     Health care services				 
	     Military cost control				 
	     Military downsizing				 
	     Military personnel 				 
	     Quality of care					 

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GAO-06-642

     

     * Results in Brief
     * Background
     * Military Departments Converting Military Health Care Positio
          * Air Force, Army, and Navy Have Converted or Plan to Convert
          * Military Departments Making Progress Hiring Civilian Replace
     * Conversions Not Expected to Alter Medical Readiness, Quality
          * Medical Readiness
          * Quality of Care
          * Recruitment and Retention of Military Health Care Personnel
          * Access to Care
          * Cost of Conversions to DOD
     * Conclusions
     * Recommendations for Executive Action
     * Agency Comments and Our Evaluation
     * Appendix I: Scope and Methodology
     * Appendix II: Conversion of Navy Military Physician Positions
     * Appendix III: Conversion of Military Health Care Positions t
     * Appendix IV: Navy's Experience in Recruiting Civilians for C
     * Appendix V: Comments from the Department of Defense
     * Appendix VI: GAO Contact and Staff Acknowledgments
          * GAO Contact
          * Acknowledgments
               * Order by Mail or Phone

Report to Congressional Committees

United States Government Accountability Office

GAO

May 2006

MILITARY PERSONNEL

Military Departments Need to Ensure That Full Costs of Converting Military
Health Care Positions to Civilian Positions Are Reported to Congress

GAO-06-642

Contents

Letter 1

Results in Brief 3
Background 5
Military Departments Converting Military Health Care Positions to Civilian
Positions and Making Progress Filling Civilian Positions 7
Conversions Not Expected to Alter Medical Readiness, Quality of Care,
Recruitment and Retention, or Access to Care, but Effects on Cost to DOD
Unknown 13
Conclusions 21
Recommendations for Executive Action 21
Agency Comments and Our Evaluation 21
Appendix I Scope and Methodology 24
Appendix II Conversion of Navy Military Physician Positions by Specialty
27
Appendix III Conversion of Military Health Care Positions to Civilian
Positions by Geographic Region 28
Appendix IV Navy's Experience in Recruiting Civilians for Converted
Military Health Care Positions, Fiscal Year 2005 30
Appendix V Comments from the Department of Defense 31
Appendix VI GAO Contact and Staff Acknowledgments 34

Tables

Table 1: Defense Health Program Appropriation, Fiscal Years 2005-07 5
Table 2: Number of Military Health Care Positions Converted or Planned for
Conversion to Civilian Positions, Fiscal Years 2005-07 7
Table 3: Military Health Care Positions Converted or Planned for
Conversion to Civilian Positions by Type of Position and Grade, Fiscal
Years 2005-07 9
Table 4: Military Health Care Positions Converted or Planned for
Conversion to Civilian Positions by Type of Position and Grade, Fiscal
Years 2005-07 (Detailed) 10
Table 5: Combined Air Force, Army, and Navy Military Medical Readiness
Requirements Compared to Combined Military Departments' Medical and Dental
Personnel End-strength, Fiscal Year 2004 14
Table 6: Navy Military Physician Positions Converted by Specialty, Fiscal
Years 2005 and 2006 27
Table 7: Military Installations, by Military Department, with the Largest
Cumulative Numbers of Military Health Care Positions Converted or Planned
for Conversion to Civilian Positions, Fiscal Years 2005-07 28
Table 8: Navy Experience in Recruiting Federal Civilian Health Care
Personnel to Fill Converted Military Positions in Fiscal Year 2005 by Type
of Position, as of January 31, 2006 30

Abbreviations

DHP Defense Health Program DOD Department of Defense GS General Schedule
MHS Military Health System MQA Medical Quality Assurance PA&E Office of
Program Analysis and Evaluation

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separately.

United States Government Accountability Office

Washington, DC 20548

May 1, 2006

The Honorable John Warner Chairman The Honorable Carl Levin Ranking
Minority Member Committee on Armed Services United States Senate

The Honorable Duncan L. Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives

Since September 11, 2001, the high pace of operations has created
significant stress on the military's operating forces. In late 2003, the
Department of Defense (DOD) reported that recent studies had found
thousands of military personnel were being used to accomplish work tasks
that were not military essential. DOD found that civilian or private
sector contract employees could perform these tasks in a more efficient
and cost-effective manner than military personnel. As a result, DOD
directed the military departments to identify and convert certain targeted
numbers of military positions to federal civilian or contract positions.1
Along with other functional areas, the military departments identified
military health care2 positions that could be converted. Questions have
surfaced, however, regarding the potential effects of these actual and
planned conversions on the Defense Health Program (DHP), especially given
that military health care personnel provide care to the families of
servicemembers and to retirees in addition to active duty members.

1 The military departments consist of the Air Force, Army, and Navy. The
Navy is responsible for providing medical and dental support to the Marine
Corps. Also, hereafter, we will refer to federal civilian or contract
positions as "civilian positions."

2 For the purpose of this report, military health care personnel includes
medical, dental, and other personnel associated with the delivery of
health care in the Defense Health Program.

The National Defense Authorization Act for Fiscal Year 20063 prohibits the
military departments from performing any further conversions of military
medical or dental positions to civilian positions until the secretary of
each department submits, not before June 1, 2006, to the Committees on
Armed Services of the Senate and the House of Representatives a
certification that the conversions will not increase costs or decrease
quality of care or access to care. The act also requires us to study the
military departments' plans and progress, and the potential effects on the
DHP of converting military health care positions to civilian positions.
For this report, we examined (1) the military departments' plans for and
actions to date in converting military health care positions to civilian
positions and the departments' experiences in filling these converted
positions with civilians and (2) the potential effects of converting
military health care positions to civilian positions on the DHP.

To examine the military departments' completed and planned conversions of
military health care positions, we obtained the number, type, and location
of positions converted or planned for conversion from military health care
positions to civilian positions during fiscal years 2005 through 2007 from
the offices of the surgeon general of the Air Force, Army, and Navy. To
examine the military departments' experience in filling the converted
positions with federal civilian or contract employees, we requested that
the offices of the surgeons general for the Air Force, Army, and Navy
provide information on the extent to which the converted positions were
filled, the time required to fill converted positions, and reasons for
delays in filling the positions. To identify the potential effects of
converting military health care positions on the DHP, we obtained and
examined the offices of the surgeons general's assessments regarding how
the conversions would affect medical readiness,4 cost of the DHP, quality
of care, beneficiaries' access to care, and recruitment and retention of
military medical and dental personnel. In addition, we conducted focused
analyses at the Naval Medical Center, Portsmouth. We chose this facility
because it had the largest number of health care conversions of any Navy
facility for fiscal year 2005 and represented the location with the
largest number of conversions planned during fiscal year 2005 through
fiscal year 2007. At the Naval Medical Center, Portsmouth, we examined
data on waiting times for appointments in selected departments before and
after conversion of military physician positions. We determined that the
data used in this report were sufficiently reliable for our purposes. We
also discussed the potential effects on the DHP of converting military
health care positions to civilian positions with officials from the
TRICARE Management Activity in the Office of the Assistant Secretary of
Defense for Health Affairs; from the offices of the surgeon general for
the Air Force, Army, and Navy; from the Office of Program Analysis and
Evaluation (PA&E); and from the Naval Medical Center, Portsmouth. For more
detailed information on our scope and methodology, see appendix I. We
performed our work from November 2005 through April 2006 in accordance
with generally accepted government auditing standards.

3 Pub. L. No. 109-163, S: 744 (2006).

4 For the purposes of this report, medical readiness personnel
requirements include those military health care personnel required to meet
the demands of the operational scenarios in the national military
strategy.

                                Results in Brief

The Air Force, Army, and Navy have converted or have plans to convert
military health care positions to civilian positions and have made
progress in hiring civilian replacement personnel. From fiscal years 2005
through 2007, the Air Force, Army, and Navy collectively have converted or
plan to convert a total of 5,507 military health care positions to
civilian positions, representing 6.1 percent of the military departments'
DHP military personnel. Specifically, the military departments converted
1,772 positions (32 percent of the total planned conversions) in fiscal
year 20055 and 1,645 positions (30 percent of the total) in fiscal year
2006, and plan to convert 2,090 positions (38 percent of the total) in
fiscal year 2007. The Navy is the most significantly affected of the three
military departments. The Navy has converted or plans to convert 2,676
military health care positions, representing 49 percent of the total
positions converted or planned for conversion. In contrast, the Air Force
has converted or plans to convert 1,214 positions, or 22 percent of the
total conversions and the Army has converted or plans to convert 1,617, or
29 percent of the total conversions. Of the total military health care
positions converted or planned for conversion, the majority are enlisted
positions, while about 20 percent are military officer positions. By the
end of fiscal year 2007, the departments plan to have converted 152
physician positions, 349 nurse positions, and 208 dental positions to
civilian positions. By comparison, in fiscal year 2006, there were a total
of 10,352 military physicians, 9,138 nurses, and 3,020 dentists in the Air
Force, Army, and Navy. The Navy, however, is the only department that
plans to convert any physician positions. Regarding the hiring of
replacements, the Navy has the most experience hiring civilians for the
converted positions, but that experience is limited to 7 months. While the
departments have been recruiting for a short time to hire civilian
replacements for converted positions, they have each made varying degrees
of progress and to date, have not experienced significant difficulties
filling the civilian positions. In 7 months time, the Navy filled
two-thirds of the positions it converted in fiscal year 2005, and the Air
Force and Army have filled 37 percent and 30 percent of their fiscal year
2006 positions, respectively, within 4 months' time.

5 The Navy was the only military department to convert any military health
care positions to civilian positions in fiscal year 2005. Also, the Navy
made a staffing decision not to convert military health care positions to
civilian positions on a one-for-one basis.

While the military departments do not expect the conversions to affect
medical readiness, quality of care, recruitment and retention of military
health care personnel, or to decrease beneficiaries' access to care, it is
unknown whether the conversions will increase or decrease costs to DOD.
Based on our examination of the military departments' application of the
DOD medical readiness sizing model for determining which military health
care positions are required for medical readiness, and our understanding
of how the military departments determined which health care positions
should be considered for conversion, it is unlikely that the conversions
will affect medical readiness. Only military positions in excess of those
required to meet the demands of the operational scenarios included in the
national military strategy were considered candidates for conversion.
Similarly, because each military department has maintained the same
credentialing and privileging processes for civilian medical and dental
care providers, quality of care is not expected to be affected by the
conversions. In addition, given that many factors could affect a health
care professional's decision to join or leave military service, it is
difficult to isolate what potential effect the military-to-civilian
conversions will have on recruitment and retention of military medical and
dental personnel. However, it is unknown whether the military to civilian
conversions will increase or decrease costs to DOD because (1) it is
uncertain what actual compensation levels will be required to successfully
hire replacement civilian personnel and (2) the methodologies each
department is considering using in its certifications to Congress may not
include the full costs for military personnel. Currently, the military
departments may not prepare their certifications using cost data prepared
by DOD's PA&E, which is currently identifying total costs for military
health care positions. Without accounting for the full costs in their
analyses, the military departments will not be able to make a true
comparison of military positions to the costs to support civilian
positions. Also, Congress will be unable to judge the extent to which the
military departments' certifications are based on actual and anticipated
compensation costs for completed and future civilian hires unless the
military departments include such delineations in their certifications to
Congress.

We are making recommendations to ensure that the military departments
account for the full costs of military health care positions converted or
planned for conversion when they report to Congress. In written comments
on a draft of this report, DOD generally concurred with our
recommendations. DOD's comments are reprinted in appendix V.

                                   Background

The Military Health System (MHS) provides health support for the full
range of military operations and for military servicemembers and their
families, military retirees, retiree family members, and survivors. The
Defense Health Program (DHP) appropriation supports worldwide medical and
dental services to eligible beneficiaries, veterinary services, medical
command headquarters, graduate medical education and other training of
medical personnel, and occupational and industrial health care. The DHP
appropriation supports operations of 70 inpatient facilities, 409 medical
clinics, 417 dental clinics and 259 veterinary clinics, and funds multiple
TRICARE6 contracts that augment health care delivery. Table 1 shows total
DHP appropriations and budget estimates for fiscal years 2005 through
2007.

Table 1: Defense Health Program Appropriation, Fiscal Years 2005-07

Source: Department of Defense and President's Budget Position for Fiscal
Year 2007.

aThe military departments programmed $ 35.8 million in fiscal year 2005, $
215.7 million in fiscal year 2006, and $135.4 million in fiscal year 2007
for the conversion of military health care positions to civilian
positions.

6 DOD provides health care through TRICARE, a regionally structured
program that uses civilian contractors to maintain health care provider
networks that complement health care provided at military treatment
facilities.

In fiscal year 2005, the MHS employed approximately 42,400 federal
civilian employee full-time equivalents whose costs were funded by the
DHP. The MHS also employed about 90,000 military medical, dental, and
support personnel. The cost of these military personnel who support
DHP-funded activities is funded by each military department's military
personnel appropriation.

In December 2003, DOD directed the military departments to convert certain
targeted numbers of military positions, including some health care
positions, to federal civilian or contract positions based on evaluations
that showed many military personnel were being used to accomplish work
tasks that were not military essential and could be performed more cost
efficiently by civilians.7 According to DOD officials, the conversion
process began in late 2003/early 2004 with the creation of a task force,
chaired by the Director of PA&E including members from offices of the
Assistant Secretary of Defense for Health Affairs and the surgeons general
for the Air Force, Army, and Navy, to identify military medical and dental
positions that could be converted to federal civilian or contract
positions. The task force examined 121 occupational medical and dental
specialties for potential conversion. It applied a DOD medical readiness
personnel sizing model to identify the baseline medical readiness
personnel requirements for each military department, taking into
consideration only those positions that members believed would not be
required for medical readiness, would not degrade clinical capabilities,
would not reduce access to medical or dental care to beneficiaries, or
would not increase costs to DOD.

As the military departments began to implement the conversions, each
military department reassessed the availability and affordability of
civilian replacement personnel in the geographical areas where conversions
were planned. Adjustments were then made to the military departments'
plans to reflect local medical commanders' assessments. According to
officials with the offices of the surgeons general for the Air Force and
Army, conversions of military health care positions in their military
departments are planned to be replaced on a one-for-one basis with
civilian or personnel. However, according to a Navy official, the Navy
decided to link a reassessment of appropriate medical and dental staffing
levels in its medical centers to the conversion process. This
reassessment, among other things, reviewed the number and type of staffing
required to meet clinical productivity goals and quality standards.
Applying the results of the staffing reassessments resulted in the Navy
concluding that there was no need to hire civilian personnel replacements
for 345 of the 1,772 positions converted for fiscal year 2005.

7 Program Budget Decision 712, December 24, 2003.

Military Departments Converting Military Health Care Positions to Civilian
            Positions and Making Progress Filling Civilian Positions

The Air Force, Army, and Navy have each begun implementing plans to
convert non-military essential health care positions to civilian positions
and have made progress in hiring civilians to fill the converted
positions. During fiscal years 2005 through 2007, the military departments
have converted or plan to convert about 5,500 military health care
positions to civilian positions, including certain numbers of physician,
nurse, and dental positions. While the departments have been recruiting
for a short time to hire civilian replacements for converted positions,
they have each made varying degrees of progress and to date, have not
experienced significant difficulties filling the civilian positions.

Air Force, Army, and Navy Have Converted or Plan to Convert Military Health Care
Positions to Civilian Positions

The Air Force, Army, and Navy have each made plans and begun converting
military health care positions to civilian positions. During fiscal years
2005 through 2007, the departments have converted or plan to convert a
total of 5,507 military health care positions to civilian positions,
representing 6.1 percent of the total DHP military personnel.
Specifically, the departments converted 1,772 positions (32 percent of the
total planned conversions) in fiscal year 2005, 1,645 positions (30
percent) in fiscal year 2006, and plan to convert 2,090 positions (38
percent) in fiscal year 2007. Table 2 summarizes the number of
planned/converted positions by military department.

Table 2: Number of Military Health Care Positions Converted or Planned for
Conversion to Civilian Positions, Fiscal Years 2005-07

Source: GAO analysis Air Force, Army, and Navy data.

Conversion by military department: The Navy is the most significantly
affected of the three military departments by the military to civilian
conversions. The Navy has converted or plans to convert 2,676 military
health care positions, representing 49 percent of the total positions
converted or planned for conversion in DOD. In addition, as table 2 shows,
the Navy was the only department that converted positions in fiscal year
2005, converting a total of 1,772 positions-32 percent of the total number
of planned/converted positions. By contrast, the Air Force has converted
or plans to convert 1,214 positions, or 22 percent of the total
conversions and the Army has converted or plans to convert 1,617, or 29
percent of the total conversions.

Conversion by type of position and grade: While each of the departments
plans to convert both enlisted and officer health care positions to
civilian positions, the majority of positions planned for conversion are
enlisted positions (80 percent), while military officer positions account
for about 20 percent of the conversions. Military health care positions
consist of (1) medical-including not only health care providers who
directly interact with patients, but also a variety of support positions
whose functions directly relate to medical care, such as laboratory,
radiology and dietary technicians; (2) dental-including dentists and
dental technicians and assistants; and (3) other-including a variety of
positions that are part the DHP but which do not directly affect the
provision of medical or dental care to patients, such as administrators
and public affairs officers. Table 3 shows the breakdown of types of
health care positions converted or planned for conversion by each military
department.

Table 3: Military Health Care Positions Converted or Planned for
Conversion to Civilian Positions by Type of Position and Grade, Fiscal
Years 2005-07

Source: GAO analysis of Air Force, Army, and Navy data.

As table 3 shows, the majority of the health care positions that have been
or are scheduled for conversion fall into the medical category (69
percent). Dental positions account for 14 percent of the total
conversions, while other positions represent 17 percent of the total
conversions.

Of all health care positions, the type of position most affected by the
conversions for fiscal years 2005 through 2007 is the position categorized
by the Navy as enlisted corpsman, by the Army as an enlisted medic, and by
the Air Force as enlisted aerospace medical services personnel.8 Within
the medical category, the three positions with high rates of conversion
are physician, nurse, and dentist. By the end of fiscal year 2007, the
departments plan to have converted 152 physician positions, 349 nurse
positions, and 208 dental positions to civilian positions. In fiscal year
2006, there were a total of 10,352 military physicians, 9,138 nurses, and
3,020 dentists in the Air Force, Army, and Navy. The Navy, however, is the
only department that plans to convert any physician positions-neither the
Army nor the Air Force plans to convert any military physician positions
to civilian positions. Appendix II shows the military physician positions
by specialty converted by the Navy in fiscal year 2005 and fiscal year
2006.

8 Navy corpsmen serve in various hospital departments such as radiology,
laboratory, and clinics and also perform administrative duties such as
patient records management and appointment scheduling. Army medics provide
emergency and routine outpatient and inpatient medical care and also
perform administrative duties. Aerospace medical services personnel serve
in various capacities such as licensed practical nurses, occupational
health specialists, and emergency medical technicians and perform other
administrative functions.

Table 4 provides a detailed breakdown of military health care positions
converted or planned for conversion to civilian positions by type of
position and grade.

Table 4: Military Health Care Positions Converted or Planned for
Conversion to Civilian Positions by Type of Position and Grade, Fiscal
Years 2005-07 (Detailed)

Source: GAO analysis of Air Force, Army, and Navy data.

aNurses includes eight nurse practitioners scheduled for conversion by the
Air Force, five in fiscal year 2006 and three in fiscal year 2007. bOther
military medical officer positions include dieticians, physical
therapists, speech pathologists, radiation health/radiation specialists,
microbiologists, and biochemists. cOther DHP military officer positions
include administrative positions. dIncludes Army warrant officers.

Appendix III provides information regarding the military departments'
military to civilian conversions by geographical region.

Military Departments Making Progress Hiring Civilian Replacements

Each of the military departments has made varying degrees of progress in
hiring civilian personnel to fill military health care positions that have
been converted to civilian positions. According to military department
officials, the Air Force ceased hiring actions to fill its fiscal year
2006 converted positions in January 2006 and the Army in February 2006
after enactment of the National Defense Authorization Act for Fiscal Year
2006. However, their experiences to date suggest they have not encountered
significant difficulties hiring civilian personnel to fill converted
positions.

Of the three departments, the Navy has the most experience hiring civilian
replacements, filling two-thirds of the positions it converted in fiscal
year 2005. As table 2 shows, the Navy converted a total of 1,772 military
health care positions to civilian positions in fiscal year 2005. According
to a Navy official, while these conversions took place on October 1, 2004,
the first day of fiscal year 2005, the Navy did not begin recruiting
civilians to fill the converted positions until July 2005 to allow for (1)
Navy military treatment facilities to assess their staffing needs, (2)
military personnel to vacate the converted positions, and (3)
consultations with human resource offices to develop federal civilian job
announcements. Also, the Navy decided not to fill all of the military
health care positions it converted. After reassessments of medical and
dental staffing levels at its facilities, the Navy decided to fill only
1,361, or 77 percent, of the 1,772 converted military positions. Over a
7-month period for these 1,361 positions, the Navy had successfully
recruited 907, or 67 percent, of the civilians needed, as of January 31,
2006. Appendix IV provides more detailed information about the Navy's
experience in hiring civilian personnel by type of position. Before
enactment of the National Defense Authorization Act for Fiscal Year 2006,
Navy officials indicated that they had planned to begin hiring civilian
personnel in April 2006 to fill the 215 military health care positions
converted at the beginning of fiscal year 2006.9

9 According to DOD officials, the military departments remove military
positions from authorized military endstrength for conversion to civilian
positions on October 1, the first day of the fiscal year. Hiring of
civilian or contract personnel to fill converted positions is a separate
action which may occur later. In the case of the Navy, funding for hiring
civilian replacement personnel becomes available at the midpoint of the
fiscal year in the first year of conversion.

A Navy official told us that there have been no significant difficulties
in filling such a large number of federal civilian positions within a
short period of time. However, public and private employers report a
limited supply of certain types of medical and dental personnel both on a
national level and in certain geographical areas. In 2005, the Bureau of
Labor Statistics reported that nurses were considered difficult to hire
and retain by non-military employers and forecast that employers will
continue to compete for nursing services. In addition, in December 2005,
the Health Resources and Services Administration, an agency of the
Department of Health and Human Services, reported that about 20 percent of
the U.S. population lives in a primary medical care health professional
shortage area.10 According to a Navy official, based on this information,
the Navy is recruiting on a national level to hire four types of
personnel-physicians, dentists, pharmacists, and laboratory officers-at
its various facilities. For its other types of medical and dental
positions, the Navy is seeking to hire civilian personnel by targeting
local markets. Also, the Navy is using various special pay provisions to
allow it to compete with other employers, such as Department of Veterans
Affairs' medical centers in selected geographical areas.

Because the Air Force and Army only began converting military health care
positions to civilian positions in fiscal year 2006, their experiences
hiring civilians to fill converted positions are more limited than the
Navy's experience. However, as of January 2006, the Air Force had
successfully recruited 149, or 37 percent, of the 401 positions converted
within 4 months. The Army recruited 305, or 30 percent, of the 1,029
military health care positions converted within 4 months. Air Force and
Army officials told us that they have not experienced significant
difficulties in hiring civilian replacement personnel.

10 This designation is based on the number of physicians in a geographic
area, per unit of population. A separate designation is based on the
number of dentists.

     Conversions Not Expected to Alter Medical Readiness, Quality of Care,
Recruitment and Retention, or Access to Care, but Effects on Cost to DOD Unknown

The military departments do not expect conversion of military health care
positions to civilian positions to have any effect on medical readiness,
the quality of care, recruitment and retention of military health care
personnel, and beneficiaries' access to care. However, it is unknown what
effect the conversions will have on the cost to DOD.

Medical Readiness

Based on our examination of the military departments' application of the
DOD medical readiness sizing model for determining which military health
care positions are required for medical readiness, and our understanding
of how the military departments determined which health care positions
should be considered for conversion, it is unlikely that the conversions
will affect medical readiness. Incorporating scenarios that reflected
operational plans, each military department applied DOD's medical
readiness sizing model to identify the number of military health care
personnel required for medical readiness. In determining which specific
military health care positions would be converted, each department, in
consultation with military health care facilities, then assessed the
impact of conversions on medical readiness. Senior medical officials told
us that the military departments' plans for converting military health
care positions to civilian positions are not expected to have any effect
on medical readiness because only military positions in excess of those
needed for medical readiness were candidates for conversion. In defining
medical readiness personnel requirements, the military departments
included those military health care personnel required to meet the demands
of the operational scenarios included in the National Military Strategy.
Moreover, while not generalizable to all facilities and all military
departments, our examination of military health care positions converted
at Naval Medical Center, Portsmouth showed that the conversions did not
affect medical readiness.

According to DOD officials, in 2004, the Air Force, Army, and Navy, in
identifying which military health care positions were candidates for
conversion, initially determined the military positions that would be
required for medical readiness, incorporating scenarios that reflected
operational plans. The operational plans incorporated joint medical
requirements, and the military departments then used these requirements to
define medical requirements to respond to anticipated casualties,
including those wounded in action and those with disease and nonbattle
injuries. In defining medical readiness requirements for the
military-to-civilian conversion process, each military department used the
national military strategy that was current at that time. Using a
DOD-approved medical readiness personnel sizing model,11 the military
departments identified the number of military medical and dental personnel
that was required for medical readiness. Table 5 shows the number of
positions the departments determined to be required for medical readiness
compared to the military medical and dental endstrength for the Air Force,
Army, and Navy for fiscal year 2004.

Table 5: Combined Air Force, Army, and Navy Military Medical Readiness
Requirements Compared to Combined Military Departments' Medical and Dental
Personnel End-strength, Fiscal Year 2004

Source: Office of Assistant Secretary of Defense for Health Affairs.

Only those military positions in excess of those positions required for
medical readiness were considered for possible conversion to federal
civilian or contract positions.

11 We did not assess the validity of the DOD medical readiness personnel
sizing model or the reasonableness of the assumptions and data used in
applying the model.

According to a DOD official, in 2005, the military departments again used
the DOD-approved medical readiness personnel sizing model to identify
their medical readiness requirements for the purpose of setting
end-strength requirements for the fiscal years 2006-2011 time frame.
Medical officials for the Air Force, Army, and Navy told us that they
again used the national military strategy, which was current at that time,
in applying the medical readiness sizing model. Officials from the Air
Force, Army, and Navy told us the model produced results showing that the
services' medical/dental personnel endstrength exceeded medical readiness
personnel requirements.

Our review of military positions converted at Naval Medical Center,
Portsmouth showed no apparent effect on medical readiness requirements. To
test the assertion that none of the positions converted at the Naval
Medical Center, Portsmouth, had a mobilization/readiness mission, we
examined the 352 military health care positions that were converted to
federal civilian positions on October 1, 2004, for fiscal year 2005. Of
the 352 military positions examined, we found 349 positions did not have
mobilization/readiness missions. Although three of the 352 military
positions had mobilization/readiness missions, a Navy medical official
explained that they transferred the mobilization requirement for the
converted military positions to other positions that were not scheduled
for conversion to avoid any effect on medical readiness. We verified that
the mobilization missions for the converted military positions were
transferred to other military positions not scheduled for conversion.

Quality of Care

Because the military services have maintained the same processes and
requirements for delivery of health care by civilian employees and
considering the results of our limited testing of the credentialing and
privileging process at Naval Medical Center, Portsmouth, the military
departments' plans for military-to-civilian conversions are not expected
to adversely affect the quality of care. Officials in the offices of the
surgeon general for the Air Force, Army, and Navy told us that converting
military health care positions to civilian positions will not result in
decreased quality of care because each department has maintained the same
credentialing and privileging requirements12 for civilian personnel. Also,
in developing civilian position descriptions for converted military health
care positions, officials told us that they give close attention to
appropriately identifying the required education, training, and
professional qualifications of applicants. Officials also stated that
before civilian applicants are hired, their compliance with the
educational and other minimum qualification requirements for the civilian
positions will be verified. Our examination of the credentialing and
privileging documentation for selected civilian personnel hired to fill
converted military health care positions at the Naval Medical Center,
Portsmouth, found that required queries of national health care databases
were performed for each civilian employee and the results of the queries
revealed no adverse information about the civilian employees hired.

In May 2002, the Assistant Secretary of Defense for Health Affairs defined
quality in health care in responding to the Healthcare Quality Initiative
Review Panel's recommendation to promulgate a definition of quality
concerning healthcare and related services within the Military Health
System to orient current and future measurement initiatives. Quality in
health care was defined as "the degree to which health care services for
individuals and population increase the likelihood of desired health
outcomes and are consistent with current professional knowledge."13 In
conjunction with the promulgation of this definition, the Assistant
Secretary of Defense for Health Affairs required that the quality of
health care be assessed by performance measures addressing three specific
questions: (1) Is the foundation for the provision of high-quality care in
place and is this foundation robust? (2) How well does our health care
system perform with respect to measurable processes and outcomes of care
and other comparable data? and (3) How is our health care delivery system
and quality of health care provided viewed by our beneficiaries, military
leadership, and Congress?

12 Credentialing of health care personnel refers to the process of
inspecting and verifying the credentials of health care practitioners. The
credentials process is conducted before the granting of clinical
privileges and is repeated at the time of reappointment and renewal of
privileges. Clinical privileging refers to the granting of permission and
responsibility of a health care provider to provide specified health care
within the scope of a provider's license, certification, or registration.
Clinical privileges define the scope and limits of practice for individual
providers and are based on the capability of the health care facility,
licensure, training, experience, health status, judgment, and peer and
department head recommendations.

13 Department of Defense, Office of the Assistant Secretary of Defense for
Health Affairs, Military Health System Definition of Quality in Health
Care, HA-Policy: 02-016, May 9, 2002.

Officials in the offices of the surgeon general for the Air Force, Army,
and Navy told us that they have many processes and performance measures
within the MHS to ensure the delivery of quality health care. Each
military department already employs many civilian employees who work in
military treatment facilities. Officials told us that these civilian
employees are subject to the same quality of care assessments and
processes as military medical and dental personnel. The civilian personnel
who will be hired to replace converted military positions will also be
subject to the same quality of care processes and performance assessments.

To test the credentialing and privileging processes for the civilian
replacement personnel hired at the Naval Medical Center, Portsmouth, we
examined the credentialing and privileging files for 27 civilian
employees: 5 physicians, 8 dentists, 3 pharmacists, and 11 other types of
personnel hired to replace converted military positions in fiscal year
2005. All five civilian physicians hired were board certified in their
respective specialty. As part of our examination, we also reviewed the
files for documentation that officials had queried health care
practitioner databases, as required by DOD.14 We found documentation in
the credentialing and privileging files from the National Practitioner
Data Bank15 and the Healthcare Integrity and Protection Data Bank16
showing that both data banks were queried, as required, for all of these
civilian employees. The query results revealed no adverse information
about the civilian employees hired.

14 Department of Defense Directive 6025.13, Medical Quality Assurance
(MQA) in the Military Health System (MHS), signed by the Deputy Secretary
of Defense, May 4, 2004.

15 The National Practitioner Data Bank was established under the Health
Care Quality Improvement Act of 1986, Pub. L. No. 99-660 (1986), as an
information clearinghouse to improve the quality of health care by
collecting and releasing information related to the professional
competence and conduct of physicians, dentists, and other health care
practitioners.

16 The Healthcare Integrity and Protection Data Bank was established by
the Health Insurance Portability and Accountability Act of 1996, Pub. L.
No. 104-191 (1996), as a means to prevent fraud and abuse in health
insurance and health care delivery and to improve the quality of care.

Recruitment and Retention of Military Health Care Personnel

Given the multitude of factors that may influence an individual health
care professional's decision to join or leave military service, it is
difficult to isolate the potential effect of converting military health
care positions to civilian positions on the recruitment and retention of
military health care personnel. Officials in the offices of the surgeons
general for the Air Force, Army, and Navy told us that the
military-to-civilian conversions will not have any impact on recruiting
and retention of military health care personnel. For example, Navy
officials commented that while the Navy is experiencing difficulties in
recruiting and retaining certain types of health care personnel, factors
other than planned military-to-civilian conversions, such as military pay
levels and the Global War on Terrorism, are responsible. Army officials
commented that they recognize the importance of viable medical career
fields and will perform career progression analyses to ensure that the
medical career fields are viable. Air Force officials commented that
conversions will be accomplished through normal attrition, and no
individuals will be forced to retire or separate from the military as a
result of the conversions.

Access to Care

Officials in the offices of the surgeon general for the Air Force and Army
stated that converting military health care positions to civilian
positions will not result in any degradation in the availability of
medical or dental care to servicemembers, their families, or retirees
because converted military medical and dental positions are being replaced
on a one-to-one basis. So for every converted military health care
position, there will be a civilian personnel replacement. Moreover,
neither the Air Force nor the Army plans to convert any physician
positions during fiscal years 2006 and 2007. While the Air Force and
Army's decision not to convert any military physician positions will
probably decrease the likelihood for significant reductions in the
availability of medical care, it is important to note that delays in
filling the civilian positions after the military positions have been
removed may result in decreased military medical capacity. Air Force and
Army medical officials pointed out that they have the option of purchasing
medical or dental care from the managed care network of health care
providers, if necessary, to avoid any decreases in servicemembers' or
beneficiaries' access to care.

Officials in the office of the surgeon general of the Navy told us that
they do not expect any decreases in servicemembers' or beneficiaries'
access to care attributable to the conversions even though, in many
instances, military health care positions were not replaced on a
one-for-one basis. With the new staffing levels, Naval Medical Center,
Portsmouth, officials believe that the mix of current staffing for
departments is more efficient and will not result in longer waiting times
for appointments. Also, Naval Medical Center, Portsmouth, officials
pointed out that the purchased care system (managed care network of health
care providers) is available if capacity within the medical center becomes
temporarily limited.

At the Naval Medical Center, Portsmouth, we examined data on waiting times
for appointments before and after the conversion in two departments and a
family practice clinic that had military physician positions converted for
fiscal year 2005 and found that for the most part, waiting times did not
increase after the conversions. On October 1, 2004, military physician
positions were converted in the departments of internal medicine and
physical therapy and in the family practice clinic at the Naval Medical
Center, Portsmouth. Naval Medical Center, Portsmouth, officials told us
that it is difficult to attribute changes in appointment waiting times to
the military-to-civilian conversions because several factors, such as the
deployment of military physicians or the arrival or departure of ships,
may affect the departments' capacity or demand for appointments. Data that
we obtained from the two departments and a family practice clinic at the
Naval Medical Center, Portsmouth, showed for the most part that waiting
times were within standards for appointment waiting times for varying
types of appointments.

Cost of Conversions to DOD

It is unknown whether the conversion of military health care positions to
civilian positions will ultimately increase or decrease costs for DOD
because:

           o  it is uncertain what actual compensation levels will be
           required to successfully hire most civilian replacement personnel
           and
           o  the programming rates the departments are considering using in
           their certifications to Congress about the cost of the conversions
           to DOD do not include the full compensation costs for military
           personnel.

           While officials in the offices of the surgeons general for the Air
           Force, Army, and Navy believe that the military-to-civilian
           conversions will not increase costs, we believe it is uncertain
           how much it will cost to hire civilian replacement personnel for
           recent and planned conversions of military health care positions
           and whether this cost will exceed the cost for the military
           positions. While the military departments have made progress in
           hiring civilian personnel within a short time, many civilian
           personnel remain to be hired. As of January 31, 2006, the Navy had
           recruited 67 percent of the personnel it plans to hire for the
           conversions made in fiscal year 2005, and the Air Force and Army
           had recruited 37 percent and 30 percent, respectively, of the
           positions they converted in fiscal year 2006. However, according
           to DOD officials, as of March 6, 2006, the Air Force, Army, and
           Navy had not compared the actual costs to hire these federal
           civilian employees with what it had cost them to employ military
           personnel in these positions.

           The methodologies the military departments may use to certify
           conversion costs in their reports to Congress may understate
           savings associated with the elimination of military medical and
           dental positions, according to PA&E officials. While the Air
           Force, Army, and Navy had not finalized the methodologies they
           plan to use in the certification process, at the time of our
           review, representatives from the offices of the surgeons general
           for the Air Force, Army, and Navy discussed the possibility of
           using military department-specific programming rates. These rates
           are calculated by dividing the military personnel budgets by the
           number of military personnel currently employed by the Air Force,
           Army, and Navy. However, according PA&E officials, this
           calculation omits several significant costs (such as training,
           recruitment, educational assistance, and health benefit costs)
           incurred by military medical personnel which may lead to
           understated cost projections for the converted military positions.

           PA&E officials told us that at this time they lack complete
           information on all of the costs that are associated with
           compensating military medical and dental personnel. Officials told
           us that PA&E is completing a project designed to determine true
           military medical and dental personnel costs, but the project is
           not expected to be completed until summer 2006, which is after the
           June 1, 2006 date when the military departments may submit
           certifications to the House and Senate Committees on Armed
           Services that their planned conversions of military medical or
           dental positions will not increase costs. In the meantime, PA&E
           has completed preliminary estimates, which officials believe are
           far more complete in estimating the cost of military medical and
           dental positions than the programming rates that may be used by
           the Air Force, Army, and Navy. These preliminary estimates show
           that the programming rates considerably understate military
           medical and dental personnel costs when compared to the PA&E
           estimates. Currently, the military departments are not required to
           coordinate the development of their cost comparisons for the
           congressional certifications with PA&E. By not coordinating their
           cost analyses efforts with PA&E to ensure that they are
           considering the full costs of the military medical and dental
           positions they have converted or plan to convert to civilian
           positions, the Air Force, Army, and Navy will be unable to
           determine the true cost implications for defense health care.

           While the Air Force, Army, and Navy are already well under way in
           converting about 5,500 military health care positions to civilian
           positions, they are not currently in the position to know how the
           conversions will affect the cost to DOD. Because none of the
           military departments has plans to use cost data prepared by the
           DOD's PA&E, they risk using methodologies to certify program costs
           that omit several significant factors, such as training,
           recruitment, and educational assistance. Without ensuring that
           they are accounting for the full costs-both direct and indirect-of
           converting the military health care positions to civilian
           positions, the military departments will be unable to provide
           Congress with accurate comparative costs for their conversions.
           Further, Congress will be unable to judge the extent to which the
           military departments' certifications are based on anticipated
           compensation costs for completed and future civilian hires unless
           the military departments include such delineations in their
           congressional certifications.

           To ensure that the military departments account for the full costs
           of military health care positions converted or planned for
           conversion when they report to Congress, we recommend that the
           Secretary of Defense direct the Secretaries of the Air Force,
           Army, and Navy to take the following two actions:

           o  Coordinate the development of their congressional
           certifications for military health care conversions with the
           Office of Program Analysis and Evaluation in order to consider the
           full cost for military personnel and for federal civilian or
           contract replacement personnel in assessing whether anticipated
           costs to hire civilian replacement personnel will increase costs
           to DOD for defense health care.
           o  Address in their congressional certifications for military
           health care conversions the extent to which total projected costs
           for hiring federal civilian or contract personnel include actual
           compensation costs for completed hires and anticipated
           compensation costs for future hires.

           DOD provided written comments on a draft of this report and
           generally concurred with our recommendations.

           In commenting on our recommendation that the secretaries of the
           military departments coordinate with DOD's PA&E in developing
           their congressional cost certifications, DOD noted that PA&E's
           effort to identify the total cost for military health care
           positions is not yet complete and that it is unlikely that these
           data will be available in a final format for use by June 1, 2006,
           the date DOD stated the military departments are required to
           provide their cost certifications to Congress. We note, however,
           that the National Defense Authorization Act for Fiscal Year 2006
           does not require the secretary of each military department to
           submit such certifications by June 1, 2006. Instead, the act
           requires the department secretaries to submit their certifications
           not before June 1, 2006. DOD also commented that the PA&E data add
           several personnel cost items that are not included in the military
           departments' programming rates, and that these additional costs
           will generate a higher average cost per military member than that
           reflected by the programming rates. While it is indeed possible
           that using PA&E data-which include costs such as training,
           recruitment, educational assistance, and health benefits-will
           provide higher average costs for military members than the
           military departments' programming rates that do not include these
           additional costs, we believe it is important that the military
           departments provide Congress with the most accurate comparative
           costs of converting the military health care positions to civilian
           positions.

           In commenting on our recommendation that the military departments
           certifications address the extent to which total projected costs
           for hiring civilian personnel include actual compensation costs
           for completed hires and anticipated compensation costs for future
           hires, DOD stated that our recommendation appears to be
           unnecessary because in order to make a certification that the
           conversions will not increase costs, each secretary will review
           actual civilian employee and contract employee costs for
           conversions already completed, as well as estimated costs for
           pending conversions. It is important to note that while the
           military departments have made progress in hiring civilian
           replacement personnel, 74 percent of the civilian replacement
           personnel for military health care positions converted and planned
           for conversions during fiscal years 2005 through 2007 had not been
           hired as of January 31, 2006. So, the military departments'
           certifications on the total projected costs of the conversions are
           likely to be based more on anticipated rather than actual
           compensation costs. Consequently, we believe that it is important
           for Congress to understand the extent to which the military
           departments' certifications are based on actual compensation costs
           for completed hires versus projected compensation costs for future
           hires.

           DOD's comments are reprinted in appendix V. DOD also provided
           technical comments, which we have incorporated in the final report
           where appropriate.

           We are sending copies of this report to the Secretary of Defense
           and other interested parties. We will provide copies of this
           report to others upon request. In addition, the report is
           available at no charge on the GAO Web site at http://www.gao.gov .

           If you or your staffs have any questions about this report, please
           contact me at (202) 512-5559 or [email protected] . Contact points
           for our Offices of Congressional Relations and Public Affairs may
           be found on the last page of this report. GAO staff who made key
           contributions to this report are listed in appendix VI.

           Derek B. Stewart Director, Defense Capabilities and Management

           To meet our objectives, we reviewed pertinent documents, reports,
           and other information, as available, that related to the
           conversion of military health care positions to federal civilian
           or contract positions. We also interviewed cognizant officials in
           the TRICARE Management Activity within the Office of the Assistant
           Secretary of Defense for Health Affairs, the offices of the
           surgeons general of the Air Force, Army, and Navy, the Office of
           Program Analysis and Evaluation, and the office of the
           Undersecretary of Defense for Personnel and Readiness. We also
           performed additional work at the Naval Medical Center in
           Portsmouth, Virginia.

           To examine the extent to which the military departments have
           developed and implemented plans to convert military health care
           positions to civilian positions, we obtained data on Defense
           Health Program positions that have been converted since October 1,
           2004, and those planned for conversion through fiscal year 2007
           from the offices of the surgeon general for the Air Force, Army,
           and Navy. For each position converted or planned for conversion,
           we requested that the offices of the surgeons general to provide
           the geographic location, type of position, and the grade (either
           officer or enlisted position). We analyzed the data obtained from
           each military department to identify the characteristics of the
           positions converted for fiscal year 2005 and fiscal year 2006 and
           planned for conversion in fiscal year 2007. We also obtained
           information regarding the process used by the military departments
           in selecting the number and types of positions converted and
           planned for conversion from discussions with officials within the
           offices of the surgeons general and reviews of documentation.

           To identify the experiences of the military departments in filling
           the converted military positions with civilian personnel, we
           requested that the military departments identify for each
           converted position the following information as of January 31,
           2006:

           o  Location
           o  Former military position title
           o  Date converted
           o  Billet occupied on date of conversion
           o  Current civilian position title
           o  Programmed as General Schedule (GS) or contract position
           o  Date recruitment initiated
           o  Date civilian or contract employee reported for duty
           o  Whether civilian position was filled as of January 31, 2006
           o  Whether the civilian position was filled by a GS or contract
           employee
           o  If civilian position was not filled, status of recruitment
           efforts
           o  If civilian position was not being recruited, reasons why

           We analyzed the data obtained from the military departments to
           identify the characteristics of their experiences in filling the
           federal civilian or contract positions by type of position and by
           geographical area and to identify reasons for difficulties in
           filling positions, if any. We also reviewed information from the
           Bureau of Labor Statistics and the Health Resources and Services
           Administration to identify the types of health professional
           positions that are considered to be difficult to fill.

           We took steps to ensure the reliability of the data we used in our
           review. We provided an Excel spreadsheet and specification of data
           elements to the Army, Air Force, and Navy. The spreadsheet had 16
           defined variables in which we requested data for military health
           care positions converted to a civilian position since October 1,
           2004. Several of the data elements were restricted to drop-down
           menu choices to minimize error and clearly convey the type of
           response we were seeking. The military departments returned the
           Excel spreadsheet to us in electronic format. To assess the
           reliability of these data, we reviewed the data for obvious
           inconsistency errors and completeness and compared the total
           number of positions converted with official numbers we were given
           in interviews with officials. In addition, we reviewed any related
           accompanying documentation and worked closely with agency
           officials to identify any data problems. When we found
           discrepancies (such as nonpopulated fields or data
           inconsistencies), we brought them to our points of contact's
           attention and worked with them to correct the discrepancies before
           conducting our analyses. In addition, we sent an electronic
           questionnaire with questions regarding the data to our points of
           contact and followed up on any issues we felt pertinent regarding
           the reliability of the data. Based on these efforts, we determined
           that the data were sufficiently reliable for the purposes of our
           report.

           In regard to the potential effects of conversions, we focused on
           potential impacts on medical readiness, cost, quality of care,
           access to care, and recruitment and retention of military medical
           and dental personnel. For each of these potential effects, we
           requested that the military departments provide their assessments
           and the basis for their views. To obtain detailed information
           regarding the effects of conversions, we selected the Naval
           Medical Center, Portsmouth, for focused analyses because it had
           the largest number of health care conversions of any Navy facility
           for fiscal year 2005 and represented the location with the largest
           number of conversions planned from fiscal year 2005 through fiscal
           year 2007.

           Regarding potential effects of the conversions on medical
           readiness, we obtained and examined information regarding the
           process used by the military departments in determining the
           medical readiness personnel requirements. We did not assess the
           validity of the DOD medical readiness personnel sizing model or
           the reasonableness of the assumptions and data used in applying
           the model. Also, we examined whether each of the 352 positions
           converted for fiscal year 2005 at the Naval Medical Center,
           Portsmouth, had a mobilization/readiness mission and, if so,
           whether the mission was transferred to another position that was
           not converted.

           Regarding the potential effects of the conversions on the quality
           of care, we obtained information on the processes that the
           military departments will use to ensure quality of care delivery
           by civilian replacement personnel. We examined the credentialing
           and privileging documentation and assessed whether queries were
           made, as required, to the National Practitioner Data Bank and the
           Healthcare Integrity and Protection Data Bank as part of the
           credentialing and privileging process in hiring the civilian
           replacement employees at Naval Medical Center, Portsmouth.

           Regarding access to care, we obtained and examined military
           department representatives' assessments of the potential effect of
           conversions on servicemember and beneficiary access to care. We
           also requested and analyzed data from the Naval Medical Center,
           Portsmouth, on the extent to which TRICARE access to care
           standards were being met in those departments where military
           physician positions were converted.

           Regarding the potential effect of the conversions on the cost of
           defense health care to DOD, we discussed with officials in the
           offices of the surgeons general, the methodology that they planned
           to use in certifying to Congress that planned conversions would
           not increase costs. We also discussed the extent to which military
           department-specific programming rates include the full costs for
           military personnel with representatives from the Office of Program
           Analysis and Evaluation and from the Office of the Undersecretary
           of Defense for Personnel and Readiness.

           We performed our work from November 2005 through April 2006 in
           accordance with generally accepted government auditing standards.

           The Navy is the only military department that has converted any
           military physician positions since October 1, 2004-converting 148
           physicians during fiscal year 2005 and 4 physicians during fiscal
           year 2006. Of the 152 military physician positions converted by
           the Navy, 41, or 27 percent, were family practice physicians; 37,
           or 24 percent, were pediatric physicians; 21, or 14 percent, were
           general medical officers; and 17, or 11 percent, were internal
           medicine physicians, as shown in table 6. There are no military
           physicians scheduled for conversions in fiscal year 2007.

           Table 6: Navy Military Physician Positions Converted by Specialty,
           Fiscal Years 2005 and 2006

           Source: GAO analysis of Navy data.

           aA general medical officer has completed medical school, including
           a 1-year internship but has not completed specialty residency
           training.

           bInternal medicine conversions include internal medicine
           physicians with specialties in cardiology, gastroenterology, and
           pulmonary disease as well as general internal medicine physicians.

           cPediatrics conversions include pediatric physicians with
           specialties in adolescence, cardiology, genetics and sexual abuse
           in addition to general pediatric physicians.

           The military departments' plans for converting military health
           care positions to civilian positions are widely dispersed among
           many locations within each military department. The Navy's actual
           and planned conversions of military health care positions to
           federal civilian positions are occurring at 39 different
           locations, both in the United States and overseas. Of these
           locations, the majority-34, or 87 percent-have fewer than 200
           positions scheduled for conversion. Table 7 shows the locations of
           the largest numbers of military health care positions to civilian
           positions.

           Table 7: Military Installations, by Military Department, with the
           Largest Cumulative Numbers of Military Health Care Positions
           Converted or Planned for Conversion to Civilian Positions, Fiscal
           Years 2005-07

           Source: GAO analysis Air Force, Army, and Navy data.

           The military-to-civilian conversions of Air Force health care
           positions are occurring at 62 locations in the United States. The
           majority of these locations, 57, or 92 percent, are scheduled for
           fewer than 50 conversions for fiscal years 2006 and 2007. At 5 Air
           Force locations the number of conversions planned exceeds 50,
           including Lackland Air Force Base, Keesler Air Force Base, Travis
           Air Force Base, Wright-Patterson Air Force Base and Langley Air
           Force Base. Lackland and Keesler are the most significantly
           affected with 107 and 101 conversions, respectively.

           The military-to-civilian conversions of Army military health care
           positions are occurring at 124 locations in the United States and
           overseas. Of these 124 locations, 59 are Army installations, 20
           are for Army personnel at other service installations, and 45 are
           at military entrance processing commands. The majority of these
           locations, 116, or 94 percent, are scheduled for fewer than 50
           conversions for fiscal years 2006 and 2007. At 8 locations, the
           number of Army conversions planned exceeds 50 including Fort Sam
           Houston, Walter Reed Army Medical Center, Fort Lewis, Tripler Army
           Medical Center, Fort Bliss, Fort Bragg, Fort Rucker, and Fort
           Gordon. Fort Sam Houston and Walter Reed Army Medical Center are
           the most significantly affected with 221 and 181 conversions,
           respectively.

           As of March 16, 2006, the Navy had hired exclusively federal
           civilians as replacement personnel under the General Schedule but
           had also approved the hiring of 14 physicians as contract
           employees because of concerns that higher compensation levels than
           are available under the General Schedule system would be necessary
           to hire these physicians. The Navy's experience in successfully
           recruiting federal civilian health care personnel to replace
           military health care positions converted in fiscal year 2005
           varied by type of position, as shown in table 8.

           Table 8: Navy Experience in Recruiting Federal Civilian Health
           Care Personnel to Fill Converted Military Positions in Fiscal Year
           2005 by Type of Position, as of January 31, 2006

           Source: GAO analysis of office of the surgeon general of the Navy
           data.

           Derek B. Stewart (202) 512-5559 or [email protected]

           In addition to the individual named above, Sandra Bell, Assistant
           Director; Steve Fox; Benjamin Bolitzer; Alissa Czyz; Dawn Godfrey;
           Jennifer Jebo; Lynn Johnson; William Mathers; Julia Matta; and
           Terry Richardson made key contributions to this report.

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           Paul Anderson, Managing Director, [email protected] (202)
           512-4800 U.S. Government Accountability Office, 441 G Street NW,
           Room 7149 Washington, D.C. 20548

                                  Conclusions

                      Recommendations for Executive Action

                       Agency Comments and Our Evaluation

Appendix I: Scope and Methodology Appendix I: Scope and Methodology

Appendix II: Conversion of Navy Military Physician Positions by Specialty
Appendix II: Conversion of Navy Military Physician Positions by Specialty

Appendix III: Conversion of Military Health Care Positions to Civilian
Positions by Geographic Region Appendix III: Conversion of Military Health
Care Positions to Civilian Positions by Geographic Region

Appendix IV: Navy's Experience in Recruiting Civilians for Converted
Military Health Care Positions, Fiscal Year 2005 Appendix IV: Navy's
Experience in Recruiting Civilians for Converted Military Health Care
Positions, Fiscal Year 2005

Appendix V: Comments from the Department of Defense Appendix V: Comments
from the Department of Defense

Appendix VI: A Appendix VI: GAO Contact and Staff Acknowledgments

                                  GAO Contact

                                Acknowledgments

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Highlights of GAO-06-642 , a report to congressional committees

May 2006

MILITARY PERSONNEL

Military Departments Need to Ensure That Full Costs of Converting Military
Health Care Positions to Civilian Positions Are Reported to Congress

Based on studies showing that many military members are performing tasks
that are not considered military essential, the Air Force, Army, and Navy
have plans to convert certain numbers of military health care positions to
civilian positions. Questions have surfaced regarding the potential
effects of these conversions on the Defense Health Program. The National
Defense Authorization Act for Fiscal Year 2006 prohibits the military
departments from performing any further conversions until the secretary of
each department certifies to Congress that the conversions will not
increase costs or decrease quality or access to care. The act also
requires GAO to study the military departments' conversions and their
potential effects. Specifically, GAO examined (1) the military
departments' plans for and actions to date in converting military health
care positions to civilian positions and the departments' experiences in
filling the converted positions with civilians and (2) the potential
effects of converting military health care positions to civilian positions
on the Defense Health Program.

What GAO Recommends

GAO is making recommendations for the Department of Defense (DOD) to
account for the full costs of military health care positions converted or
planned for conversion. In reviewing a draft of this report, DOD agreed
with GAO's recommendations.

The Air Force, Army, and Navy have converted or have plans to convert
several thousand military health care positions to civilian positions and
have made progress in hiring civilian replacement personnel. From fiscal
years 2005 through 2007, the Air Force, Army, and Navy collectively have
converted or plan to convert a total of 5,507 military health care
positions to civilian positions. Of the 5,507 military health care
positions, the departments plan to convert 152 physician positions, 349
nurse positions, and 208 dental positions to civilian positions. In fiscal
year 2006, there were a total of 10,352 military physicians, 9,138 nurses,
and 3,020 dentists in the Air Force, Army, and Navy. The Navy is the most
significantly affected of the three military departments, having converted
or planning to convert a total of 2,676 military health care positions,
representing 49 percent of the total 5,507 positions converted or planned
for conversion. While the departments have been recruiting for about 4 to
7 months to hire civilian replacements for converted positions, to date,
they have not experienced significant difficulties filling the civilian
positions.

The military departments do not expect the conversions to affect medical
readiness, quality of care, recruitment and retention of military health
care personnel, or decrease beneficiaries' access to care. However, it is
unknown whether the conversions will increase or decrease costs to DOD. At
present, the military departments may not prepare their congressional
certifications using cost data prepared by DOD's Office of Program
Analysis and Evaluation, which is identifying the full costs for military
health care positions. Instead, the military departments may use cost data
that do not contain all the costs, like training, necessary to support a
military medical position. Without accounting for the full costs in their
methodologies, the military departments will not be able to make a true
comparison of the total costs required to support military positions
versus civilian positions. Moreover, Congress will be unable to judge the
extent to which the departments' certifications are based on actual and
anticipated compensation costs for civilian hires unless they include such
delineations in their certifications.

Military to Civilian Health Care Position Conversions, Fiscal Years
2005-07

Source: GAO analysis of Air Force, Army, and Navy data.
*** End of document. ***