Pentagon continues with overhaul of the military’s $50 billion healthcare system

As the nation continues to debate how to provide affordable healthcare to all Americans, the Pentagon is quietly moving forward with overhauling the U.S. military’s mammoth health system that oversees the care of nearly 10 million active-duty service members, their families and veterans.

On Tuesday (Aug. 27), the federal Defense Health Agency (DHA), one of the nation’s largest healthcare institutions that provides medical benefits and services to Army, Navy, Air Force and Marine Corps personnel, moved forward with the second phase of the multi-stage restructuring and consolidation of the Military Health System (MHS) formerly known as TRICARE.

Housed within the U.S. Department of Defense, MHS employs more than 137,000 workers at 65 hospitals, 412 clinics, and 414 dental clinics at facilities across the nation and around the world. However, all operations of the military system are exempt from any provision of the omnibus Affordable Care Act. The 19th Medical Group at the Little Rock Air Force Base is the lone MHS facility in Arkansas.

Navy Vice Admiral Dr. Raquel Bono, the Defense Health Agency’s director, said changes in the mammoth health care system that has an annual budget of $50 billion should be transparent, rather than disruptive, to military health care beneficiaries.

“From the patient’s perspective, the way I like to describe it is that at first it should be very transparent to them,” said Bono. “They won’t see any real visible changes.”

The Pentagon first established the DHA in 2013 as part of a larger effort meant to reorganize its health care programs and services. The reorganization was based in part on the cost-cutting recommendations of a task force that issued a report on the management of U.S. military health care in 2011.

Under the old system, many aspects of military health care were managed by separately by the Army, Navy and Air Force. After DHA was created in 2013, Congress directed the Defense Department to assume management responsibility of all the armed forces health care facilities in late 2016. As a part of the nation’s defense authorization act in 2017.

After several stops and starts, the Pentagon unveiled its final implementation plan to overhaul the military healthcare system in the summer of 2018 after Congress extended its original deadline for consolidation all armed services health care facility operations until 2021. The revised DOD plan urges a more gradual phase-in under DHA, which was included in the recent defense policy bill signed by President Donald Trump on Aug. 13.

In the Phase 2 changes unveiled Tuesday, MHS said half of the roughly 375 military treatment facilities in the United States that had been previously operated by the Army, Navy or Air Force will move under the control of the DHA. Eventually, every military treatment facility will move under the DHA, and the agency has opted to manage those facilities by dividing them into a variety of “markets,” officials said.

Geographically, DHA plans to divide those facilities into 20 so-called “large segment” markets, including  the national capital region, San Diego, San Antonio and Southwestern Kentucky, among others. Small segment markets will include Central Louisiana, Las Vegas, New England, Central Virginia and Central Oklahoma among the 16 similar sized regions.

Finally, all 70 military treatment facilities that don’t fall within the boundaries of either a small or large market will be part of a “stand-alone” segment managed by the same office that manages the small markets. Similar markets eventually will be formed in Europe and the Indo-Pacific region, home to about 75 military treatment facilities.

Although Bono said U.S. military personnel will not notice many changes at first, she said eventually all military treatment facilities will become easier for patients to navigate. For example, she said, as the military treatment facilities and the markets continue to evolve under the DHA, beneficiaries will find that how they make an appointment in the Tidewater area  of Virginia will be the same way they make an appointment at Brooke Army Medical Center in San Antonio or at a facility in San Diego.

Also, a move to joint electronic health records is part of the MHS transformation, making the movement of beneficiary health records between different facilities seamless, Bono said. This will them to be treated anywhere, including at facilities run by the Department of Veterans Affairs, she said.

The Pentagon healthcare provider is expected to begin Phase 3 of the MHS overhaul in October 2020, which includes bringing the rest of U.S.-based military treatment facilities under its purview. Overseas facilities will move under DHS during Phase 4 in October 2021.