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DoD Striving for Affordable, 'World-Class' Health Care

By Samantha L. Quigley
American Forces Press Service

WASHINGTON, Oct. 20, 2005 – The Defense Department is working to stem the rising cost of its military health system, which has essentially doubled since 2001, a senior defense health official said.

In 2001 military-health-system spending was about $18 billion; today it is more than $36 billion. And in the next four to five years, it is likely that the total budget will exceed $50 billion, Dr. William Winkenwerder Jr., assistant secretary of defense for health affairs, told the military personnel subcommittee of the House Armed Services Committee during a hearing here Oct. 19.

"The increase in health care cost is not unique to the military," he said. "What is unique for us is the goal to provide world-class medical care for all those who have served and continue to serve our country."

Providing that level of care for 9 million beneficiaries while keeping it affordable for the long term is the primary goal, he said. And just like the private sector, the military is facing many obstacles to achieving that goal.

Winkenwerder said that caring for military retirees is the "principle underlying factor" of the rising costs. If trends continue, officials estimate that by fiscal 2009 75 percent of the budget will be spent on paying for retiree health care. "Just 20 to 25 percent (of the budget) will be spent on active duty servicemembers and their families," he said.

Other contributing factors include rising pharmacy costs. This can be linked, in part, to implementation of the Tricare Reserve Select coverage, which expands benefits to reserve-component personnel and their family members who meet eligibility. A pharmacy benefits program with a standardized drug formulary helping to keep the $5 billion pharmacy budget from growing larger.

Legal opposition from large drug companies has stymied DoD's attempts to obtain retail discounts

Tricare contracts, fully implemented in fiscal 2005, use best-practice principles aimed at improving beneficiaries' satisfaction and controlling private-sector costs. Other cost-management measures include a performance-based management of military medical facilities and a quality-management program to help control costs.

Cost is only one issue the military health system is facing. Senior medical officials from the military service also addressed attracting and retaining medical personnel.

Army and Navy officials reported that medical school scholarships available for servicemembers went unclaimed this year. Recruiting and retaining certain medical personnel has largely been affected by operations tempo, Vice Adm. Donald C. Arthur, the Navy's surgeon general, said.

"We've only deployed 40 percent of our medical force," he said. "But in that 40 percent are all of our surgeons, our anesthetists, our (operating room) technicians. And those people are growing weary of the constant deployment -- two or three or more times. Our challenges are in recruiting those ... specialties."

Officials hope that more predictable deployment windows will help with retention, Arthur said, adding that the three services are working together to look at recruiting strategies.

The Air Force reported no problems with health-professions scholarships going unclaimed this year, Lt. Gen. George P. Taylor, Air Force surgeon general, said. The Air Force and the other services are suffering from the same nursing shortage that's affecting the private sector. Taylor said several factors affect recruiting and retention.

"There is ... a fair amount of uncertainty in the force now, because of not only the warfight and the probability and the chances of deployment," Taylor said, "but also coming through the Base Realignment and Closure process."

BRAC has caused military medical personnel to wonder what and how the changes will affect them, he said.

The panel praised the military's medical force and strides made in improving battlefield survival. Placing state-of-the-art surgical and medical care far forward on the battlefield has enhanced battlefield health care for operations Enduring Freedom and Iraqi Freedom, Maj. Gen. Joseph G. Webb, Army deputy surgeon general, said. It is this ability to treat an injury within minutes of it occurring that has saved so many lives.

"In (Iraq), more than 91 percent of all casualties have survived their wounds, the highest survivability rate of any U.S. conflict," Webb said.

The panel also mentioned the preparations being made should there be an avian influenza pandemic. Commands have been provided with information and are planning their responses, Winkenwerder said. About 2.5 million courses of Tamiflu, a drug to treat the flu, will be received within the next month, and DoD is working on an agreement to ensure servicemembers get several million of the first available doses of an avian influenza vaccine currently in development.

"Our first obligation, in order to help in a situation, is to have our own people protected," he said. "We're working on all fronts and we're making good progress."

Winkenwerder also lauded the military medical force's response to natural disasters and humanitarian issues. Citing the response to the tsunami in southeastern Asia and hurricanes Katrina and Rita in the southern United States and natural disasters in Guatemala and Pakistan. He said that the Department's medical assets can provide unique assets found nowhere else.

"Once again, the department and the Military Health System demonstrated substantial and unique capabilities of support for humanitarian operations," he said.

Contact Author

William Winkenwerder Jr.
Maj. Gen. Joseph G. Webb, USA
Vice Adm. Donald C. Arthur, USN
Lt. Gen. George P. Taylor, USAF

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