Health System Seeks Savings While Retaining Excellence

By Jim Garamone

American Forces Press Service

WASHINGTON – Iraq and Afghanistan have been dangerous places over the past decade, but deployed troops often passed a saying on to new arrivals: “If you’ve got to get shot, this is the best place to do it.”

The saying spread because the medical care for wounded service members was state-of-the-art, with the survival rates significantly higher than in previous conflicts.

Dr. Jonathan Woodson, assistant secretary of defense for health affairs, told the House Appropriations Committee’s defense subcommittee yesterday that he wants to retain this excellence while controlling spiraling costs.

“Over the last 10 years, the men and women of the Military Health System have performed with great skill and undeniable courage in combat,” Woodson said. “Their contributions to advancing military and American medicine are immense. The Military Health System’s ability to perform this mission and be able to respond to humanitarian crises around the globe is unique among all military and nonmilitary organizations on this globe.”

All department leaders are committed to sustaining this precious resource, Woodson said. But he acknowledged that military health care is now more than $51 billion of the yearly defense budget. The 2011 Budget Control Act calls for $487 billion in defense cuts over the next 10 years, and the health care system is not immune, he said.

Military health System officials are taking four roads to savings, Woodson told the panel. The first is to find efficiencies inside the system. The second is a continuation of efforts to appropriately pay for private-sector providers. A third initiative promotes healthy lifestyle choices while seeking to reduce illnesses, injuries and hospitalizations. The last is proposed changes to beneficiary cost-sharing under the TRICARE military health plan.

The fiscal 2013 defense budget request includes this recommended path to reorganize the military health system, Woodson said. “We have learned a great deal from our joint medical operations over the last 10 years,” he added, “and we recognize that there is much opportunity for introducing even a more agile headquarters operation that shares common services and institutes common clinical and business practices across our system of care.”

Woodson noted that the recommended changes to TRICARE fees came about only after officials had explored other avenues of potential savings. “Before we even considered TRICARE fees, there were a number of initiatives and considerations taken,” he told the committee.

DOD health affairs is looking to control headquarters costs, Woodson said, and it has had some success eliminating 780 full-time equivalent positions from the headquarters. Other efforts, he added yielded further savings.

“We put in a number of management reforms that have yielded very positive results in reducing costs, including a robust fraud and recuperative program that has yielded $2.6 billion over the last four years,” he said.

In addition, Woodson said, a pharmacy management program has saved $ 3.4 billion, medical supply and acquisition standardization has saved $31 million, and an amalgamation of other efficiencies that saved about $1 billion.