New Defense Health Agency Will Streamline Military Functions

Maj. Gen. Douglas Robb, ND

By Military Health System Communications Staff

The Defense Department is grappling with many complex decisions as they transform a post-war military force. One of the more immediate actions the department is undertaking to shape the future is to establish a Defense Health Agency – an organization that will stand up on Oct. 1, 2013.

The fundamental responsibility of the new agency is to better integrate healthcare delivery among Army, Navy and Air Force health operations along with the vast network of private-sector health providers who supplement military hospitals and clinics. Working closely with the Service Medical Departments, the agency will establish more common clinical and business processes across the system. This includes greater joint purchasing of medical supplies and equipment, greater integration and oversight of health technology systems and services, and approaches to customer service that improve access to online and telephone support. Maj. Gen. Douglas Robb, DO, has been named the head of the new agency, and he will be promoted to lieutenant general prior to taking the helm.

The military health system is one of the largest and most complex health systems in the world. It provides combat casualty care on the battlefield; routine health and dental services to servicemembers, their families and military retirees at home; public health services on a global scale; a comprehensive education and training system that features a military medical university, as well as a joint medical education and training center; and a medical research and development program that provides cutting-edge insight into some of the most vexing medical challenges encountered around the world.

With 56 hospitals, hundreds of clinics, 160,000 employees and worldwide private-sector healthcare networks to supplement the military delivery system – the military health system encapsulates a budget that now exceeds $50 billion a year.

Similar to the civilian sector, healthcare costs have increased within DoD at a faster rate than general inflation. Military health costs have more than doubled in the past decade, increasing from $19 billion in 2001 to $51 billion this year, and health costs now account for more than 10% of the department’s budget. Left unaddressed, that figure is expected to grow, with the cost reaching $77 billion by 2022, according to the Congressional Budget Office.

While these resource investments have helped produce some exceptional results on the battlefield, leaders acknowledge there are opportunities to streamline services in a way that benefits everyone. “There was evolving pressure on how to reorganize the military health system to continue to provide superior health services on the battlefield and, at the same time, be more efficient,” said Allen Middleton, deputy assistant secretary of defense for Health Affairs who has overseen the stand-up of the new agency, and will serve as acting deputy director of the Defense Health Agency. “We think there’s a huge opportunity here for us to move forward on all of our strategic objectives – improve readiness, improve quality and save money.”

“Each Medical Department certainly brings incredible expertise to both the clinical and business side of our enterprise. And we need to preserve that expertise, and strengthen the manner by which we share information across our system. The Defense Health Agency is going to help us do that,” Middleton said.

“But, there is also redundancy that we don’t need. Our headquarters have much more in common than not,” Middleton said. “Just to cite a few examples, each has an operation that oversees pharmacy programs; each Military Department operates their own public health office. Over the last nine months, we have been diving deeply into each of these organizations and determining what can benefit from consolidation and what needs to be preserved within each Service.”

“It’s been a fully collaborative process – the Services and OSD are in synch on this approach,” added Middleton. “In many ways, our people in the field are pushing us to become even more joint. They see the value that can be gained from working even more closely together.”

A central operating principle of the Defense Health Agency is to establish a “shared services” model for delivering support services. The idea is that common services can be organized under one roof, providing the opportunity for both improved service and reduced cost. To start, the Defense Health Agency will assume responsibility for health information technology, medical logistics, pharmacy operations and facilities planning.

In addition, the agency will manage the TRICARE health plan for the military’s 9.6 million beneficiaries. TRICARE Management Activity, which currently oversees the health plan, will be dissolved, and its staff of 800 will be absorbed into the new agency. Another 500 or so Army, Navy and Air Force staff – mostly IT professionals – also will move to the Defense Health Agency.

By Oct. 1, 2015, the agency also will oversee contracting, medical education and training, public health, resource management, and medical research and development as shared services in addition to its initial areas of responsibility. And new ones may be added over time, Middleton said.

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