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DoD Healthcare Spending Doubled in Past Four Years

By Gerry J. Gilmore
American Forces Press Service

WASHINGTON, Jan. 25, 2005 – Defense Department healthcare spending for service members and military retirees has doubled in the past four years, DoD's senior medical adviser noted here Jan. 24.

DoD will spend almost $37 billion on health care in fiscal 2005, Dr. William Winkenwerder Jr., the assistant secretary of defense for health affairs, told attendees at the annual Tricare conference.

"That means that spending on health under the Defense Department has essentially doubled in size in just the past four years," Winkenwerder reported.

Future departmental healthcare spending is projected to be "very rapid," he pointed out, and "appears likely to exceed $50 billion within five years."

And if current trends continue, Winkenwerder noted, then 75 to 80 percent of overall DoD healthcare funding will be spent "for individuals and dependents who no longer on active duty."

Expanding medical benefits for military retirees and their families, Winkenwerder noted, has "clearly" helped to increase DoD's health care costs.

But he also pointed at DoD's pharmacy program costs, which he said now costs about $5 billion annually, a five-fold increase since 2001.

It's imperative, Winkenwerder emphasized, that department healthcare professionals "apply our full attention and our best management efforts to these matters," noting DoD will issue updated guidance "in the way we manage our pharmacy benefits going forward."

Senior departmental leaders, from Defense Secretary Donald H. Rumsfeld on down, Winkenwerder reported, have been provided "with the facts of our spending patterns, cost trends, funding needs, and how we're addressing these problems and issues."

DoD has obtained "solid funding commitments," Winkenwerder noted, for projected health care costs in 2006 and 2007. "I feel pretty good about the state of our program in the near term," he said. Yet, looking further out, Winkenwerder acknowledged that he was "candidly concerned."

DoD faces "great challenges," he pointed out, funding a healthcare system that "does not always" promote the most efficient use of care and "is increasingly out of step with the approaches and trends of the private sector."

It's time to "address these issues," Winkenwerder said, and "do what is right for our current and our future generations."

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Biographies:
Dr. William Winkenwerder Jr.

Related Sites:
Military Health System

Related Articles:
'We Take Care of Our People,' DoD's Top Medical Official Says



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