U.S. Military Health Care Reform
Written by Editor   
Wednesday, December 31, 2014 04:11 PM

On December 19, the Center on 21st Century Security and Intelligence (21CSI) at the Brookings Institution held a wide-ranging event on military health care reform.  Assistant Secretary of Defense for Health Affairs Jonathan Woodson described the value of the DoD health care system—which cares for nearly 10 million beneficiaries, costs more than $50 billion a year and has treated more than 50,000 war wounded in the conflicts of the 21st century to date. It employs roughly 140,000 full-time personnel at more than 50 hospitals and some 600 medical or dental clinics. It also involves a network of private providers who treat DoD patients as well; that network includes some 400,000 providers.

Among Woodson’s most important points were that the value of military medicine has to be determined across the broad missions for which the military health system is responsible — readiness, health and hospital care, public health, research and development and education and training; and that global security and global health crises have increased the demand for DoD's health expertise even as combat operations are diminishing.

Woodson pointed out that the DoD has made important strides in military health care in recent years, including in technologies such as advanced prosthetics, in battlefield survival rates for casualties and also in responsibly holding down cost growth through reforms in areas such as pharmaceutical prescriptions, payment reform and the stand-up of a Defense Health Agency to better integrate care across the military departments. He also spoke of progress in linking the DoD health care system to the Veterans Affairs (VA) system (a separate organization with a separate and even larger health care budget), while acknowledging that a great deal of integration and further improvement remains. He also noted, in response to a question, that it is important to facilitate the access to health care services for activated reservists, and DoD is working hard to make the associated procedures simpler for reservists and families.

After his remarks, a panel continued the discussion. The success DoD has had in recent years in reducing provider costs and having beneficiaries share a modestly greater fraction of the military cost burden. Further efforts are underway to prevent compensation costs from growing excessively. This argument was offered while at the same time defending the premise that military compensation should be adequate to meet recruiting and retention needs, that those personnel less able to afford any premium increases should be assisted, and that in general the goal of compensation reform should be to limit future cost growth rather than to make significant cuts.

Another panel member explained that much of the growth in military health care costs in recent times has been due to expanded benefits, as well as a failure of DoD premiums and co-payments to keep up with the general growth in health care costs in the United States. This set of factors has translated into more enrollees, more use of services and higher costs per doctor or hospital visit than would have otherwise been the case.

The Department of Defense must provide certain kinds of capabilities, including for battlefield expeditionary medical care, that the private sector does not need to offer. In less densely populated parts of the country or for population groups such as retirees that had other options, it might seek to encourage migration of more individuals from the military health care system to the private sector and the civilian system. This option may take on new feasibility in light of the Affordable Care Act. Panel members were quick to emphasize, however, that the DoD could still subsidize the health care costs of its personnel, and perhaps particularly its lower-salaried personnel, under such an approach. 

One panel member underscored the need to think comprehensively about military health care as one element of compensation policy. With an all-volunteer force, the goal of compensation policy is to be fair to the men and women of the U.S. military and to attract and retain a sufficiently large and high-quality pool of talent. In this regard, the country needs to be careful about providing benefits that may have limited relevance to the recruiting and retention mission and cost the country a good deal as well. Generous health care for able-bodied military retirees and their families may be a case in point—though Mayer also underscored the need for a consensual approach that recognized the interests and equities of many stakeholders. As such, his proposals for reforms focused more on rethinking benefits for future recruits than on changing existing "contracts" with current beneficiaries.

It seems that not only has the nation’s health care system been targeted for reform, but the reform of the military health care system appears to be following suit as well.

Source:  http://www.brookings.edu/blogs/up-front/posts/2014/12/22-us-military-health-care-reform-ohanlon