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The Honolulu Advertiser
Posted on: Monday, August 12, 2002

MILITARY UPDATE
Plan aimed at streamlining military healthcare system on track

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.

Next year, TRICARE, the military's healthcare system, will ease into new contracts with civilian healthcare provider networks designed to reduce hassles for 8.7 million beneficiaries and improve oversight of the multibillion-dollar deals.

TRICARE contracts have been criticized as complex, rigid and too costly. Patients and healthcare providers cite burdensome paperwork and delays in referrals for care. Military families, a transient population, have had to re-enroll, and re-learn rules and procedures, as they move between regions run by different contractors.

These problems will ease under next-generation support contracts now out for bid, said Dr. William Winkenwerder, assistant secretary of defense for health affairs, in a meeting with reporters Aug. 5.

The number of TRICARE regions will be cut from 12 to three. Contractors will gain administrative flexibility but also will be held to higher standards of customer service and clinical care, Winkenwerder said. And adverse incentives found in current contracts should end.

Winkenwerder blames "a number of very arcane, complex, not-well-understood (price) adjustment mechanisms. That is what we believe we've done away with."

Contractor bids are due Nov. 1. New five-year contracts could begin next spring, although a 10-month transition is planned for new contractors. No company will get more than one regional contract — TRICARE West, North or South. One of the three also will handle TRICARE overseas.

The three major contracts, each worth roughly $1 billion a year, will be for provider networks and administrative services only. Separate nationwide contracts are sought for pharmacy and other services, which would be managed nationwide.

All of this, said Winkenwerder, will ensure more consistency for beneficiaries wherever they are assigned.

"In the area of pharmacy, by carving that out and creating one national retail contract, we'll be able to have one network across the country, rather than a different network in all 11 regions," he said.

Questions, comments and suggestions are welcome. Write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111, or send e-mail to: milupdate@aol.com.