By Tom Philpott
Military Update focuses on issues affecting pay, benefits and lifestyle of active and retired servicepeople. Its author, Tom Philpott, is a Virginia-based syndicated columnist and freelance writer. He has covered military issues for almost 25 years, including six years as editor of Navy Times. For 17 years he worked as a writer and senior editor for Army Times Publishing Co. Philpott, 49, enlisted in the U.S. Coast Guard in 1973 and served as an information officer from 1974-77.
Military dependents and retirees might want to smile when taking stock of recent gains in medical benefits. But gains attributed to broader, smoother access to networks of civilian health care providers have brought the military “direct care”' system to the brink of crisis.
That was the message delivered to a Senate panel Feb. 28 by the surgeons general of the Army, Navy and Air Force. The three-star medical officers are responsible for running the military's network of 80 base hospitals and medical centers, 513 clinics and 160,000 increasingly frustrated health care providers.
Billions of additional medical dollars, they testified, are being pumped into civilian provider networks through TRICARE managed care support contracts, while military facilities go begging to modernize equipment, repair buildings, hire support staff and pay doctors enough to avoid critical wartime specialties.
“The rapidly escalating costs of the managed care support contracts place the direct care system at risk,'' said Vice Adm. Richard A. Nelson, the Navy surgeon general, in testimony before the Senate appropriations subcommittee on defense. “As these costs increase, there is constant pressure to find relief by reducing the direct care program payments.''
If direct-care medical dollars continue to migrate from base hospitals to civilian provider networks, Nelson warned, the “most cost-effective portion” of the health care system will suffer “serious degradation.”
Indeed, Nelson and fellow surgeons general suggested the degradation has begun.
Lt. Gen. Paul K. Carlton described a budgeting cycle that, for several years, has sent resources spiraling away from base facilities and staff. With military facilities increasingly underfunded and understaffed, said the top Air Force surgeon, it accelerates the shift of patients to civilian networks.
When patient loads on the networks exceed specifications, contract costs rise, which in turn, reduce dollars available for direct care in follow-on budgets, Carlton said. For military hospitals, he said, “Our equipment is literally well beyond its life expectancy. Our facilities are falling down.”
Sen. Ted Stevens, R-Alaska, the subcommittee chairman, raised the issue of competition for dollars between base facilities and TRICARE networks in the wake of recently renegotiated contracts between the Pentagon and the five large health management corporations that service those contracts. Stevens was upset to learn that the revised contracts raised the predicted shortfall in military health care budgets for 2002 to 2007 “from $6 billion to $20 billion.''
The senator also noted a $1.3 billion emergency supplement approved last year that had earmarked $696 million for the direct care system and $616 million for TRICARE contracts. Due to rising TRICARE contract costs, he said, most of the $696 million intended for direct care went to TRICARE contractors instead. From what remained, of the $1.3 billion supplemental, Stevens said, Navy medicine got $52 million, the Army $58 million and the Air Force $38 million.
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