United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Health, Education, and Human Services Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-08-22 monographic deposited born digital 42 p. GA 1.13:HEHS-97-130 https://www.govinfo.gov/app/details/GAOREPORTS-HEHS-97-130 P0b002ee18037ab4f f:he97130 DGPO 2010-08-12 2011-03-28 GAOREPORTS-HEHS-97-130 machine generated eng fdlp REPORT GAOREPORTS-HEHS-97-130 HEHS-97-130 Managed health care Defense cost control Health care programs Service contracts Health services administration Health care cost control Health resources utilization Military hospitals Cost effectiveness analysis DOD TRICARE Program DOD TRICARE Prime Program DOD TRICARE Extra Program CHAMPUS DOD TRICARE Financial Management Education Program Civilian Health and Medical Program of the Uniformed Services DOD TRICARE Standard Program CHAMPUS Reform Initiative Letter Report HEHS

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) use of support contracts to help deliver health care and to control costs, focusing on: (1) whether resource sharing savings are meeting DOD's projections and thus helping control TRICARE costs; (2) what problems DOD might be encountering in pursuing resource sharing; and (3) actions and alternatives pursued by DOD to overcome those problems. GAO also considered the implications of resource sharing within the broader context of TRICARE's overall cost-effectiveness.<p/>GAO noted that: (1) DOD and the contractors have made agreements likely to save about 5 percent of DOD's overall resource sharing savings goals; (2) new agreements are being considered, but neither DOD nor the contractors are confident that pending agreements will be reached or that further cost savings can be attained; (3) because resulting TRICARE contract costs may be greater than anticipated, both parties may experience related financial losses; (4) problems impeding progress on resource sharing agreements and the related savings have included lack of clear program policies and priorities, uncertainty about cost effects on military hospitals, lack of financial rewards for the hospitals entering into such agreements, and changes in military hospital capacities after contractors developed bids; (5) in response, DOD has revised policies, improved training and analytical tools, and taken other steps to promote resource training under the contracts, but to date, these efforts have not been sufficient to bring needed results; (6) for the last two contracts, DOD is applying a revised financing approach that includes resource sharing but at a reduced level; (7) the new approach allocates more funds to the military hospitals and less to the contractors, enabling the hospitals to directly acquire and use outside resources rather than use resource sharing with the contractor; (8) how the military hospitals, other sources, and contractors interact under the new approach is still being defined and has not been tested; resource sharing problems will not be automatically eliminated and may be exacerbated when used in combination with revised financing; (9) for the future, DOD plans even broader changes intended to simplify military hospital budgeting and support contract operations; (10) while the military hospitals and contractors could still use resource sharing, it no longer would be the basis for projecting major savings and lowering bids at the contract's outset; (11) DOD officials acknowledged their resource sharing savings problems but told GAO that lower than expected contract award prices have led to over $2 billion in unexpected, offsetting savings; (12) while TRICARE's overall cost-effectiveness was beyond GAO's review scope, there are reasons to question the currency and analytical completeness of DOD's preliminary savings claims; and (13) GAO supports DOD's current plans to undertake a detailed analysis, based on more up-to-date cost data and estimates, of TRICARE's overall cost-effectiveness. https://www.govinfo.gov/content/pkg/GAOREPORTS-HEHS-97-130/html/GAOREPORTS-HEHS-97-130.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-HEHS-97-130/pdf/GAOREPORTS-HEHS-97-130.pdf GAO/HEHS-97-130 https://www.govinfo.gov/app/details/GAOREPORTS-HEHS-97-130 Letter Report GAO/HEHS-97-130; Defense Health Care: TRICARE Resource Sharing Program Failing to Achieve Expected Savings; Managed health care Defense cost control Health care programs Service contracts Health services administration Health care cost control Health resources utilization Military hospitals Cost effectiveness analysis DOD TRICARE Program DOD TRICARE Prime Program DOD TRICARE Extra Program CHAMPUS DOD TRICARE Financial Management Education Program Civilian Health and Medical Program of the Uniformed Services DOD TRICARE Standard Program CHAMPUS Reform Initiative Title 10 Section 1073note 10 U.S.C. 1073note Public Law 103-160 Public Law 104-106