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Our Government Run Health Services – Part 6 – Military Health System

MHSlogoThe Military Health System (MHS) is responsible for the health care of active and retired military personnel and their dependents. The MHS is an organization within the US Department of Defense. The MHS currently has a $42 billion budget and employs approximately 137,000 people at slightly over 900 facilities around the world, including active combat zones. The 2009 Defense Health Program budget quotes a headquarters cost of $66 million and a TMA administrative figure of slightly under $200 million, totaling $260M. If we assume an average federal government employee salary of $75K that would imply a maximum number of around 3,500 administrators.

The primary health care plan operated by MHS is called TRICARE. It is run by the TRICARE Management Activity (TMA). There are also four other organizations within MHS: Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury (DCOE); Force Health Protection and Readiness (FHP&R); the Office of the Chief Information Officer (MHS-OCIO); and the Uniformed Services University for the Health Sciences (USU). MHS also includes the medical departments of the Air Force, Army, Coast Guard, Joint Chiefs of Staff, Marine Corps, Navy and the Combatant Command surgeons. In this article we’ll look at the background, organization, strengths and weaknesses of MHS, focusing primarily on TRICARE.

Background
Before the Civil War, military medicine and health care could be described as primitive. The situation evolved rapidly during and after the Civil War. Major improvements in medical science, communications and transportation lead to a more centralized casualty collection and treatment organization. World War I lead to the establishment of a tiered system, with significant skilled care available on or close to the battlefield and progressive movement of casualties to safer and better equipped facilities.

After World War II the Department of War and Department of the Navy were combined into the Department of Defense (DoD). At that time the Army, Navy and Air Force each had its own medical service. However, the organizations evolved slowly. In 1956, the Department of Defense estimated that 40 percent of active duty dependents did not have access to adequate federal facilities due to distance, incomplete medical coverage at the federal facility, or because of overloading at military treatment facilities. Congress passed two acts in 1956 and 1966 that became known as the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).

In the 1980s, facing major criticism from beneficiaries and escalating costs, the DoD ran a program known as the CHAMPUS Reform Initiative. However, very few bidders participated and it only lead to one contract that covered California and Hawaii. In late 1993 the DoD announced plans for implementing a nationwide managed care program for the MHS. Under this program, known as TRICARE, which came into operation in 1997, the United States was divided into 12 health care regions. Each region has a lead administrative agent that coordinates the health care needs of all military treatment facilities in that region. There are currently seven lead agents for the twelve regions. Since 1997, TRICARE has undergone several restructuring initiatives, including re-alignment of contract regions and the Base Realignment and Closure program. “TRICARE for Life” benefits were added in 2001 for beneficiaries who are Medicare-eligible, and “TRICARE Reserve Select” was added in 2005.

“The TRICARE program is managed by TRICARE Management Activity (TMA) under the authority of the Assistant Secretary of Defense (Health Affairs). TRICARE is the civilian care component of the Military Health System, although historically it also included health care delivered in the military medical treatment facilities.” – Wikipedia.org. Many facilities, such as David Grant USAF Medical Center (DGMC)1 on Travis AFB in California, provide multiple services. DGMC provides TRICARE services to civilians and FHP&R services to active duty personnel. The DGMC TRICARE program is administered by TRIWEST, which manages the 21 state Western Region. The Veteran Affairs (VA) facility, next to DGMC, takes care of retired service people. We’ll discuss the VA tomorrow.

TRICARE is a single-payer (the government) health care system. There is no enrollment fee for TRICARE Standard. Its beneficiaries can use any civilian health care provider that is payable under TRICARE regulations. The beneficiary pays an annual deductible and coinsurance, and may be responsible for some other out-of-pocket expenses. TRICARE Extra is a preferred provider organization (PPO) scheme. TRICARE Prime is a health maintenance organization (HMO) style plan. TRICARE Reserve Select is a premium-based health plan that can be purchased by qualified National Guard and Reserve members. It provides coverage similar to TRICARE Standard and Extra. Costs to beneficiaries are generally much lower than comparable private schemes.

Strengths
TRICARE has established a reasonable reputation for first class health care. Patients are not refused because of pre-existing conditions and some programs emphasize preventive care. That users have a choice of physicians and a wide range of plans. Costs are predictable and low. The program manages to keep up with trends in administrative efficiencies, customer service and current technologies.

TRICARE has decentralized operational management and clear lines of authority. The strong regional lead organization role allows close supervision of managed care initiatives. It also allows a regional organization to exploit its knowledge of local market conditions. Within a health plan, resources are allocated strictly according to enrollment, preserving the financial incentives associated with capitation payments. There is reasonably strong accountability through regular and timely performance evaluation.

TRICARE has quite sophisticated management information systems.Introduction of advanced systems lagged some of the private companies but now most records, including dental ones, are now online. Claim processing and billing is handled via integrated online systems. 100 percent of network claims submitted by providers are now filed electronically.

Weaknesses
No single authority is accountable for TRICARE. In practice, decisionmaking in TRICARE is often shared between the TMA and the Surgeons General. Some beneficiary groups described problems with access to care from TRICARE’s civilian providers in the early 2000s. TMA very soon set strict guidelines, including:

  • Appointment wait times shall not exceed 24 hours for urgent care, 1 week for routine care, or 4 weeks for well-patient and specialty care.
  • Office wait times shall not exceed 30 minutes for nonemergency care.
  • Travel times shall not exceed 30 minutes for routine care and 1 hour for specialty care.

Providers were also dissatisfied with the TRICARE program, specifying low reimbursement rates and administrative burdens. However, there was no evidence that the quality of care suffered. Contractors reported that providers were frustrated by some administrative requirements, such as credentialing (checking that a provider is capable of delivering a service), preauthorizations and referrals. In TRICARE, a provider had to be recredentialed every 2 years, compared to every 3 years for the private sector. That was soon changed to bring TRICARE in line with the private sector.

Providers are still complaining about preauthorization procedures. Plan managers still express concern that they often cannot refer beneficiaries to the specialist of their choice because of the military facilities’ “right of first refusal” that gives them the discretion to care for the beneficiary or refer the care to a civilian provider. However, to balance that, one has to remember that it is very much in the government’s interest to treat people at the military facility because the overall cost is lower than going out to a private contractor. The latter, of course, want to grab as much business as they can for themselves. In practice, efficient right of first refusal systems have been put in place in many regions and that has helped load balance the military facilities and give the private providers a fair share of the pie.

The level of complaints from beneficiaries is hard to establish, though TRICARE itself is often held up as a model health care system. One area where there is a real concern is treatment for mental health problems, particularly in rural areas. The Obama administration has established new lines of authority and funding to help in that area, but it remains to be seen as to how effective the new initiative will be.

Conclusions
The level of care for our serviceman, particularly on and close to the battlefield has improved very significantly since World War II, the Korean War and the Vietnam War. However, with more combat zone survivors there is a requirement for extended and expensive after care and the system is still adjusting to those changes. Military Health Service (particularly TRICARE) care for civilians is flexible, effective and more efficient than Medicare/Medicaid. However, the administrative overheads are much larger than some other government run health care systems, such as the Indian Health Service. There is an ongoing negotiation between providers and TRICARE over reimbursement rates, which are generally close to Medicare, i.e. too low in the eyes of many provider.

Some beneficiaries, particularly in rural areas, still have to wait or travel long distances for some classes of service, but once they obtain it they receive high quality attention at a relatively low out of pocket cost. One only has to search the Internet for complaints from National Guard and Reserve Members before and after they were admitted to MHS programs to appreciate the difference that access to an affordable, well run health plan can make.

 1  Verna worked at DGMC for several years on a program that successfully reduced some TRICARE costs.

Related Posts: Part 1 – Indian Health Service. | Part 2 – CHIP. | Part 3 – Medicaid.| Part 4 – Medicare. | Part 5 – FEHBP. | Part 7 – VHA. | Part 8 – Summary.

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