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Program Cuts Sustain Health Care, Maintain Quality

By Lisa Daniel
American Forces Press Service

WASHINGTON, March 1, 2011 – Defense Department officials have recommended a number of ways to cut costs in the military health system, while still providing high-quality care and protecting the wallets of active duty service members and their families, a senior defense official said yesterday.

“We’re trying to create a balanced program over the next five years, understanding that there is a great, and appropriately, hard look at the cost of health care in the department,” George Peach Taylor Jr., a medical doctor and acting principal deputy assistant secretary of defense for health affairs, said in an interview with American Forces Press Service.

The department is committed to “taking care of our active duty population and their families, being true to retirees and the promises we have made to them, and making sure we make wise investments in the future in research and development,” he said.

Like the private sector, military health costs have grown at a rate of about 4- to 6 percent each year, but Congress has not approved user fees for the TRICARE system in 15 years -- a trend that Defense Secretary Robert M. Gates has called unsustainable, especially in light of tightening budgets that are projected to have no growth in 2014 and 2015.

The department’s proposed fiscal 2012 budget includes $50 billion for health affairs, which covers some 10 million patients. The budget request would save about $340 million in fiscal 2012, and almost $8 billion through 2016.

The budget calls for creating savings by cutting overhead costs, transitioning some patients to Medicare coverage, and requiring modest increases in military health care enrollment fees for working-age retirees, Taylor said. Active duty service members will continue to receive free health care, as will their family members who choose the TRICARE Prime system, he said.

Other cost-savings initiatives will attempt to influence patients to reduce emergency room visits by going to community urgent care centers, use mail-order pharmacies more often than civilian drug stores, and buying generic drugs whenever possible, he said.

“We’re hopeful that people will understand what we’re trying to do,” Taylor said.

The fiscal 2012 budget includes these proposed changes:

-- TRICARE headquarters staff would be reduced by 780 contractors, and efficiencies found through streamlining and ending duplication of services would save $1 billion over five years;

-- Future enrollees in U.S. Federal Health Plans will be covered by Medicare when they become eligible at 65. The change will be transparent to patients who may retain their health care providers, and would save the department about $3 billion over five years;

-- Health Affairs will streamline the way they pay hospitals by adopting Medicare payment rules;

-- Working-age retirees enrolled in the TRICARE Prime program will pay an extra $2.50 per month for individuals – a change from $230 to $260 per year -- and $5 per month for families, raising their annual fees from $460 to $520. The department would create a medical index to automatically raise rates on working-age retirees each year to reflect inflation. The change would not affect surviving spouses or medically retired service members;

-- There will be no cost to patients for generic pharmaceuticals when they are ordered through mail-order;

-- Patient fees for prescription drugs will increase $2 to $3 per prescription when filled at a commercial pharmacy, and

-- Patients will be encouraged to use TRICARE-partnered urgent care centers rather than emergency rooms whenever possible.

At the same time that the fiscal 2012 and future budgets will reflect cost-savings, they also will maintain the military’s standard for the most advanced technology, therapeutics and attention to care, Taylor said.

One area the department will continue to invest heavily in is the research and treatment for traumatic brain injuries and psychological health, Taylor said. Patient demand for such services is skyrocketing, he said, noting the use of behavioral health therapies have doubled in the past 18 months.

Another area TRICARE will continue to advance is in what officials call “medical homes,” or creating communities of health care providers which are in regular contact for patient care, Taylor said.

“We’re trying to provide that coordination of care that you don’t see much in the American health care system today,” he said. “I think it’s going to provide much better patient satisfaction because you’re going to be seeing your own provider or provider team consistently.”

TRICARE also is considering adding behavioral health therapists to such teams, Taylor said.

 

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