Military Update
Military seeks solution to rising health-care costs
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.
When the Defense Department in 1995 began to entice military people from CHAMPUS, a fee-for-service health insurance plan, into TRICARE Prime, a managed-care plan, proponents said it would rein in galloping medical costs, make military hospitals more efficient and improve patient access to quality care.
Because much of that hasn't happened, and the Bush administration is looking at all defense programs with fresh eyes, the debate over TRICARE has intensified. Military health care remains a system in transition.
Complaints about TRICARE focused on claim-processing delays, denied reimbursements, slow referrals for specialty care and lack of benefit "portability" when families transfer between regions. TRICARE's impact on the elderly was particularly severe. Ineligible for managed-care enrollment, many Medicare-eligible beneficiaries saw their "space-available" care on base disappear.
The complaints have eased as TRICARE tightened performance standards and Congress expanded benefits, including landmark legislation establishing the TRICARE Senior Pharmacy program on April 1 and TRICARE for Life, which begins Oct. 1. But patient satisfaction isn't the only measure of TRICARE success.
Some military leaders and lawmakers believe TRICARE has failed on two other fronts: containing costs and protecting the military's direct-care system. Not only are costs rising but TRICARE support contracts are grabbing a larger slice of the budget pie each year as more patients shift to the civilian provider networks. The trend has left base hospitals and clinics short of cash to modernize facilities and equipment.
The level of concern is high enough now that:
• Lt. Gen. Paul K. Carlton Jr., the Air Force surgeon general, is willing to discuss alternatives to TRICARE that might better control costs and reverse a slide in resources for the military's direct-care system.
• The Defense Medical Oversight Council is studying a new leadership structure for military medicine.
• Sen. Ted Stevens, R-Alaska, chairman of the Defense appropriations subcommittee, suggests that, at a minimum, deteriorating base hospitals and clinics be protected by dividing the defense health budget into separate appropriations, with a firewall around money needed to operate and maintain base facilities.
The military isn't blaming TRICARE contractors for rising costs and deteriorating hospitals. Indeed, at a May 17 hearing of the House Armed Services personnel subcommittee, senior medical officers and a panel of TRICARE contract executives agreed that chronic underfinancing of health-care budgets has forced the services to send more patients "downtown," which in turn, drives up costs. Also, they said, Congress changes TRICARE benefits from year to year. That instability produces a steady stream of contract change orders, which further drive up costs.
Acknowledging that a search for solutions is under way inside the Defense Medical Oversight Council and among the Joint Chiefs, Carlton said the Air Force doesn't see a need for a new command and control structure over military medicine.ÊSomeone just has to get more control over health-care budgets, he said.
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