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Health Budget Proposal Reflects TRICARE Savings

By Douglas J. Gillert
American Forces Press Service

WASHINGTON, April 4, 1996 – DoD's ability to contain health care costs as it transitions from CHAMPUS to TRICARE contributed to a smaller budget request for fiscal 1997.

At $9.4 billion, the Defense Health Program is down from $9.8 billion in fiscal 1996.

This year's budget reflects cuts in nearly every area. The largest reduction -- $1.2 billion -- comes from CHAMPUS, the military's cost-sharing health care program. That loss is offset by a $1.2 billion increase in TRICARE Managed Care Support contracts that replace CHAMPUS coverage.

Total operations and maintenance funding will decrease $500 million, with $400 million coming from direct care. By contrast, the military construction request is $100 million more than last year.

Still, every health care program on the books in fiscal 1996 continues in fiscal 1997. Of the total amount asked for, $9.3 billion goes to operations and maintenance. This includes $4.2 billion for care provided in military treatment facilities, $500 million for care in nondefense facilities and $200 million for education and training. The Uniformed Services University of the Health Sciences, an in-house medical school, receives $52 million.

Projected CHAMPUS costs total $3.5 billion, of which $2.4 billion is for support contracts let under TRICARE, DoD's new managed health-care program.

Standard CHAMPUS benefits requirements decrease as managed care support contracts are let, according to Gwendolyn Brown, deputy assistant secretary of defense for health budgets and programs. TRICARE will continue to help DoD contain health care costs, Brown said, by enabling the services to better manage use of military treatment facilities.

The medical procurement budget of $270 million covers acquisition of radiographic, surgical, information systems, pathology and other equipment items. Besides upgrading equipment, DoD seeks $332 million in military construction dollars for medical facility upgrades.

The DoD fiscal 1997 budget does not, however, cover any major health-related construction projects.

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