Defense Health Care: Observations on Proposed Benefit Expansion and
Overcoming TRICARE Obstacles (Testimony, 03/15/2000,
GAO/T-HEHS/NSIAD-00-129).
Pursuant to a congressional request, GAO discussed proposed changes and
improvements to the military health system (MHS), focusing on: (1) the
various proposals to expand the military health care benefit, especially
those for older retirees, including describing the nature of the
enhancement, the present or potential challenges in implementing these
proposals and overall cost implications; (2) the broader perspective of
the appropriate size and structure of the military health system; and
(3) the obstacles that impede improvements in the TRICARE program,
particularly in terms of accessing appointments and claims processing.
GAO noted that: (1) the various legislative proposals and the Department
of Defense's (DOD) fiscal year 2001 budget request offer benefit
enhancements much-sought-after and popular with the beneficiaries, but
would have limited impact on retention; (2) several would expand or make
permanent existing demonstration projects aimed at improving access and
pharmacy coverage for older retirees, who have seen their military
health care benefits erode and are not eligible for the Federal
Employees Health Benefits Program (FEHBP) like civilian government
retirees; (3) however, the experience to date of the Medicare subvention
and FEHBP demonstrations pose many cost and operational concerns that
should be fully assessed before final decisions to expand these projects
are made; (4) the cost implications of expanding the benefit as
contained in the proposals are significant, potentially adding as much
as $10 billion a year; (5) other proposals would eliminate cost sharing
for active-duty dependents who obtain care from civilian providers, thus
removing what many see as an inequity in the benefit structure; (6)
eliminating cost sharing for health benefits, however, runs counter to
conventional health care cost containment strategy because research has
shown that the lack of cost sharing leads to unnecessary utilization and
higher costs; (7) it appears to GAO that the most significant gap in
military health care coverage is a pharmacy benefit for those older
retirees who do not have access to military pharmacies; (8) targeting
benefit enhancement to this need may provide the most benefit for the
least cost in the short term; (9) in the longer term, and on a broader
level, GAO believes that the MHS size and structure need to be
fundamentally reassessed in terms of how to best achieve its readiness
mission; (10) some have suggested that the system can be made
significantly smaller and provide even better training for wartime
needs; (11) if this is true, the savings achieved from such a
substantial downsizing effort could provide the fiscal resources to fund
expanded benefits, such as the government share of FEHBP premiums; (12)
GAO has issued a number of reports concerning the obstacles and
impediments that need to be overcome to make TRICARE more user-friendly
and efficient, and generally speaking, improvements can and should be
made; (13) among the most important are improvements in appointment
scheduling and claims processing--the subject of most of the complaints
voiced by beneficiaries and providers; and (14) additionally, there
appear to be significant efficiency opportunities remaining in DOD's
pharmacy program.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS/NSIAD-00-129
TITLE: Defense Health Care: Observations on Proposed Benefit
Expansion and Overcoming TRICARE Obstacles
DATE: 03/15/2000
SUBJECT: Proposed legislation
Defense cost control
Managed health care
Health care cost control
Health care programs
Military personnel
Health services administration
IDENTIFIER: Federal Employees Health Benefits Program
DOD TRICARE Program
Medicare Program
DOD TRICARE Extra Program
Medicare Choice Program
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* For Release on Delivery
Expected at 1:30 p.m.
Wednesday, Mar. 15, 2000
GAO/T-HEHS/NSIAD-00-129
DEFENSE HEALTH CARE
Observations on Proposed Benefit Expansion and Overcoming TRICARE Obstacles
Statement of Stephen P. Backhus, Director
Veterans' Affairs and Military Health Care Issues
Health, Education, and Human Services Division
Testimony
Before the Subcommittee on Military Personnel, Committee on Armed Services,
House of Representatives
United States General Accounting Office
GAO
Defense Health Care: Observations on Proposed Benefit Expansion and
Overcoming TRICARE Obstacles
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss proposed changes and improvements
to the military health system (MHS). The year 2000 has been proclaimed by
the Department of Defense (DOD) as the year to address the many problems
confronting military health care. DOD considers health care one of its major
quality-of-life issues important to maintaining a quality force and has
asked for the Congress' assistance in dealing with health issues, much as it
did last year with other quality-of-life issues such as pay and retirement.
Many suggestions for altering the health care system are being voiced. They
spring from retirees' demands that DOD provide health care for life as
promised in recruiting brochures, from the desire to address inequities in
current benefits, from concerns about improvements needed for recruiting and
retention, and from the overarching complaint that the military health
system as it exists today just doesn't work. This has obviously created
significant pressure to address the various concerns and possibly reform the
military health care system. Your efforts to satisfy and address all these
concerns require making major policy decisions, such as who should and can
receive military health care benefits and at what cost to the beneficiary
and the government.
While ultimately these decisions rest with the Congress, I am here today to
provide information to assist you in making these difficult decisions. I
plan to discuss the various proposals to expand the military health care
benefit, especially those for older retirees, including describing the
nature of the enhancement, the present or potential challenges in
implementing these proposals, and overall cost implications. My discussion
will also focus on the broader perspective of the appropriate size and
structure of the military health system - a fundamental consideration for
any policy decision regarding the military health benefit. Additionally, I
will discuss the obstacles that impede improvements in the TRICARE program,
particularly in terms of accessing appointments and claims processing. My
comments are based on recent analyses as well as a substantial body of work
we have done over the past several years on the MHS, retiree issues, and
TRICARE operations.
In summary, the various legislative proposals and DOD's fiscal year 2001
budget request offer benefit enhancements much-sought-after and popular with
the beneficiaries, but would have limited impact on retention. Several would
expand and/or make permanent existing demonstration projects aimed at
improving access and pharmacy coverage for older retirees, who have seen
their military health care benefits erode and are not eligible for the
Federal Employees Health Benefits Program (FEHBP) like civilian government
retirees. However, the experience to date of the Medicare subvention and
FEHBP demonstrations pose many cost and operational concerns that should be
fully assessed before final decisions to expand these projects are made. The
cost implications of expanding the benefit as contained in the proposals are
significant, potentially adding as much as $10 billion a year. Other
proposals would eliminate cost sharing for active-duty dependents who obtain
care from civilian providers, thus removing what many see as an inequity in
the benefit structure. Eliminating cost sharing for health benefits,
however, runs counter to conventional health care cost containment strategy
because research has shown that the lack of cost sharing leads to
unnecessary utilization and higher costs.
It appears to us that the most significant gap in military health care
coverage is a pharmacy benefit for those older retirees who do not have
access to military pharmacies. Targeting benefit enhancement to this need
may provide the most benefit for the least cost in the short term. In the
longer term, and on a broader level, we believe that the MHS size and
structure need to be fundamentally reassessed in terms of how to best
achieve its readiness mission. Some have suggested that the system can be
made significantly smaller and provide even better training for wartime
needs. If this is true, the savings achieved from such a substantial
downsizing effort could provide the fiscal resources to fund expanded
benefits, such as the government share of FEHBP premiums.
Mr. Chairman, you also asked that I address the obstacles and impediments
that need to be overcome to make TRICARE more user-friendly and efficient.
We have issued a number of reports on this topic and, generally speaking,
improvements can and should be made. Among the most important are
improvements in appointment scheduling and claims processing - the subject
of most of the complaints voiced by beneficiaries and providers.
Additionally, there appear to be significant efficiency opportunities
remaining in DOD's pharmacy program.
Before addressing these issues in more detail, I would like to briefly
summarize the pressures and challenges facing the MHS, because any
discussion of altering it or its benefits must begin with an understanding
of this complex system.
Challenges and Complexities of the Military Health System
The MHS is a large and complex organization with multiple responsibilities.
Most care is provided through about 580 DOD medical centers, hospitals, and
clinics worldwide, with regional networks of civilian providers supplying
the remaining care. DOD also operates a 4-year medical university and an
extensive graduate medical education program, trains health professionals to
provide combat health care, conducts medical research on a wide range of
social and environmental diseases, and oversees the operations of several
hundred medical personnel on assignments around the world. Through these
activities, DOD's health establishment responds to its two missions: wartime
readiness -- maintaining the health of service members and treating wartime
casualties; and peacetime care -- providing for the health care needs of the
families of active-duty members, retirees and their families, and survivors.
Today, about 8.2 million active-duty personnel, their dependents, and
retirees are eligible to receive care in this estimated $16 billion-a-year
program.
It is because of this dual role that DOD is often challenged in providing
health care. During the Cold War, the MHS was designed to support a
full-scale war with the Soviet Union, anticipating large numbers of
casualties and a need for in-theater medical treatment facilities. Following
the collapse of the Soviet Union, defense analysts believed future conflicts
would be of limited duration and involve smaller numbers of troops. Given
this changed threat, the overall size of the active-duty force has been
reduced by one-third since the mid-1980s, requiring a smaller MHS, fewer
military medical personnel, and the closure of a number of hospitals and
clinics. In recent years, the number of military medical personnel has
declined by 15 percent and the number of military hospitals has been reduced
by one-third. Some critics suggest that the MHS is still twice as large as
needed.
Meanwhile, the mix of the beneficiary population has changed over the past
15 years. Between 1985 and 1999, the percentage of active-duty
beneficiaries, for whom the MHS is primarily intended to serve, declined
from 26 percent to 19 percent. During this period, the percentage of older
retirees grew from 7 percent to 17 percent. The MHS has become primarily a
provider of care to beneficiaries other than active-duty members, with
family members of active-duty personnel and military retirees making up
about 80 percent of the beneficiaries. It is providing care to these
nonactive-duty beneficiaries that has strained the MHS over the last decade.
The downsizing of the military structure and the growing demand for care
from nonactive-duty beneficiaries was concurrent with significant growth in
health care costs. Between 1980 and 1990, DOD health care costs grew by
almost 225 percent, compared to about a 166 percent increase in national
health expenditures. During this period, the medical portion of the Defense
budget doubled, from 3 percent of the total to 6 percent. During the 1990s,
the MHS budgets generally leveled off, but with increased health care costs,
full funding of the military health care system continues to be an issue.
DOD now estimates that $6 billion over present spending is needed to cover
unanticipated costs over the next 5 years just to maintain the current
program.
To respond to the competing pressures from downsizing, increased costs, and
the increased demand for care by an aging beneficiary population, DOD
decided to adopt many of the changes occurring in the civilian health care
arena, and implemented a managed care program called TRICARE in the
mid-1990s. TRICARE offers beneficiaries three health care options: TRICARE
Extra is the preferred provider option, TRICARE Standard is the
fee-for-service option, and TRICARE Prime is the health maintenance option.
Contractors, who are referred to as managed care support contractors, are
responsible for processing claims, providing customer service (which may
include appointment functions), and creating networks of civilian providers
for the Prime and Extra Options. Only the Prime option requires beneficiary
enrollment, and DOD considers it the best option for controlling costs and
improving care access and quality. Active-duty members are automatically
enrolled in Prime, but their family members and retirees under age 65 have
the option to enroll. Retirees aged 65 and older are not eligible to enroll
in Prime, but DOD has the authority to provide care to them (as well as any
other nonenrolled beneficiary) in military treatment facilities (MTFs) as
long as space and resources are available; retirees receive this
space-available care at little or no cost. However, because priority for
care is given to beneficiaries enrolled in Prime, the amount of space
available care is decreasing, especially for older retirees.
Although TRICARE is considered as having a uniform benefit, the copayment
structure of Prime has created an inequity. Beneficiaries who receive care
at an MTF are not required to pay copayments, whereas those who receive care
from a civilian network physician must pay a small copayment. Because the
health care services available vary by size and type of military facility,
so does beneficiaries' ability to get free care from the direct care system.
When active-duty members and their families move from one base to another,
they often have to relearn their health care program, including how to make
an appointment, how much care can be provided at the MTF, and what portion
of care must be obtained from civilian providers. These variations in health
care offerings have caused confusion and inequities among beneficiaries.
It is important to point out that while it is becoming more difficult to
receive no-cost care in DOD medical facilities, older military retirees
generally have access to health care. Virtually all receive Medicare part A
coverage. To supplement part A, many older retirees pay the extra monthly
premium required for Medicare part B which covers physician and other
outpatient services. In addition, some purchase supplemental policies called
Medigap from private insurers that provide additional coverage. Some of the
policies provide prescription drug coverage up to specified limits.
Furthermore, about one-half of older military retirees have private health
insurance coverage. Finally, military retirees - though not their dependents
- can receive health care benefits by enrolling in the Department of
Veterans Affairs health care system. Unlike federal government employees and
retirees, military members and retirees are not eligible for FEHBP.
Older retirees who are able to receive health care from DOD report
relatively high satisfaction with their care. A recent DOD survey showed
that beneficiaries aged 65 and older appear to be more satisfied with their
personal doctor, nurse, and medical facility than any other group. However,
according to the survey, their overall satisfaction with military health
care has declined. Since 1996, the percentage of older retirees satisfied
with military health care has dropped from 71 percent to 63 percent.
Beneficiaries including older retirees continue to report higher
satisfaction with civilian care than military care. Despite having access to
other sources of medical coverage, many retirees and others contend that DOD
as a former employer promised them "free medical care for life," and that
this promise has been broken. DOD has acknowledged that such a promise was
implied. The statutory language does not entitle older retirees to medical
care in military facilities but does allow them to receive care on a space
available basis.
In response to these concerns, and as a result of legislation, DOD has begun
efforts to improve the MHS for its beneficiaries. Demonstration projects
targeted to older retirees have begun or are just beginning, including
* the Medicare Subvention demonstration, also known as TRICARE Senior
Prime, through which older retirees can use their Medicare benefit to
receive care from DOD, and DOD will be reimbursed for a portion of the
cost of that care by the Health Care Financing Administration (HCFA),
the agency that administers the Medicare program;
* the FEHBP demonstration, through which older retirees have access to
most of the same health plans as federal civil service retirees, and
agree to pay a share of the premiums;
* the TRICARE Senior Supplement project, through which older retirees can
use TRICARE Standard and Extra to supplement Medicare, including
coverage of prescription drugs; and
* the Pharmacy Pilot project, through which older retirees can obtain
prescription drugs through DOD's mail-order program or network of
retail pharmacies.
Although the introduction of managed care to the MHS is one of the most
significant changes to the system over the last decade, other efforts have
also been undertaken in an effort to improve the system. DOD and the
military services' Surgeons General recognize that their medical system
continues to evolve and its appropriate size and relative costs and
effectiveness will continue to undergo intense scrutiny. As a result, in
1998, DOD began 29 separate initiatives to modernize MHS management. These
initiatives were prompted by increasing concerns about whether the right
medical resources were in the right places to meet readiness needs as well
as to optimize peacetime health care. These initiatives address the full
spectrum of issues within the health system, many of which we and others
have reported on, such as centralized purchasing, pharmacy management,
outsourcing functions, improved information systems, and increased access to
appointments.
Observations on Proposals to Expand Benefits
Subvention Start-Up Raises Issues of Vifability and Effectiveness for DOD
We found that the start-up period of Senior Prime was successful. Despite
unanticipated delays, the six demonstration sites met the requirements for
Medicare managed care plans, enrolled substantial numbers of beneficiaries,
and began delivery of health care services at the first site on September 1,
1998. Beneficiaries participating in the project seem pleased with the care
they are receiving.
However, as a managed-care option, Senior Prime poses several challenges for
DOD. While DOD's experience with managing care under TRICARE Prime might
appear to be a model for Senior Prime, that experience has proven to be only
partly transferable to the demonstration. Unlike Prime, Senior Prime is
designed to participate with private plans in the Medicare+Choice market.
Under this design, MTFs are expected to manage their resources so that costs
on average do not exceed their capitated payment from Medicare - a fixed
amount per enrollee. In addition, from a clinical perspective, DOD faces
demands under Senior Prime that it does not face under Prime. First, the
need to stay within the capitated payment makes the effective coordination
of care and management of utilization more important than in Prime. Second,
older retirees tend to have more chronic conditions and require more care
than patients enrolled in Prime, and this also puts a premium on
coordinating care. Third, Senior Prime, as a Medicare+Choice option, must
offer a broader range of services, including home health care and skilled
nursing facility care, than are offered under Prime.
Early indications are that subvention may not be a good business proposition
for DOD - that is, its revenues from HCFA may not cover its costs. Fourteen
months after the end of calendar year 1998, the first period for which DOD
could receive reimbursement, DOD is just getting the data together to permit
a final determination as to whether HCFA should provide reimbursement. It is
questionable whether DOD will get any money from HCFA for 1998 because DOD's
provision of care to the over-65 population may not have exceeded the
required level-of-effort - the threshold that triggers Medicare payments.
For 1999, DOD may meet the threshold to obtain payment from HCFA, but
questions remain whether those payments will even cover DOD's costs of
purchasing care from private hospitals and physicians for subvention
participants.
While there is considerable interest in the program at the demonstration
sites, our analysis suggests caution in generalizing to other possible
subvention sites. About one-fifth of the eligible older retirees in the
demonstration areas have enrolled in Senior Prime, which represents over 90
percent of the enrollment goal. However, there is no guarantee that interest
at other sites would be the same. In fact, the enrollment rates at the
demonstration sites differ considerably, with enrollment at some sites
exceeding the goal, while at another site, only about one-half of the
enrollment goal was achieved. In addition, the demonstration sites are not
representative of all military health care service areas. For example, when
the demonstration sites are compared to non-demonstration sites, we found
that the demonstration sites have a disproportionate number of retirees
living near military medical centers, which provide access to a broad range
of services and are better positioned to provide the full continuum of
Medicare services. Furthermore, DOD and HCFA chose the demonstration sites
in part for their ability to meet the conditions of participation HCFA
requires of private Medicare+Choice organizations, and at least some of the
other facilities in the MHS may find it difficult to meet these standards.
Finally, the authorizing legislation for the demonstration requires GAO to
evaluate the project, answering questions about the quality of care that
Senior Prime enrollees receive, their satisfaction with that care, the cost
of the project to Medicare, and the effect of the project on the
availability of care for the nonenrolled. This report will be completed in
June 2001.
FEHBP Demonstration Has Low Enrollment and Uncertain Future
Coverage under this project began January 1, 2000, but as of February 2000,
only 3 percent of the over 70,000 eligible to participate had enrolled.
Relatively low enrollment in DOD FEHBP plans may not be surprising, given
the alternative coverage available to demonstration eligibles. Many of them
may be satisfied with their current health care coverage - for example,
Medicare+Choice plans, employer-sponsored health insurance, and Medigap - or
with no-cost, space-available access to military treatment facilities.
Moreover, potential enrollees may consider the DOD FEHBP premiums to be too
high, even though DOD pays a substantial portion of the total premium. The
monthly premium paid by the enrollee ranges from $43 to $286 for self-only
policies and from $87 to $605 for family policies, and the plans with lower
premiums are generally the most popular. For example, Blue Cross/Blue
Shield, which has the lowest fee-for-service premiums in the demonstration,
accounts for 46 percent of demonstration enrollment, while the Postmasters
Benefit Plan, which has the highest fee-for-service premiums in the
demonstration, accounts for less than one-half of 1 percent of demonstration
enrollment.
At least two additional factors might have depressed enrollment in the DOD
FEHBP plans. First, eligibles might have been reluctant to enroll because
the demonstration is temporary. Second, difficulties in the marketing
campaign may have left potential enrollees without sufficient information to
make enrollment decisions. The FEHBP informational materials were designed
for civilian employees who had considerable experience with the program
before they retired. By contrast, military retirees as a rule do not have
this experience and the materials sent to them did not fully explain how the
DOD FEHBP health plans and Medicare benefits fit together. As a result, many
eligibles probably did not understand the advantages that FEHBP plans could
offer. In addition, little information was provided in Spanish, the dominant
language in Puerto Rico - a demonstration site that accounts for 12 percent
of the demonstration's eligibles.
When the 5-week open enrollment period ended in mid-December 1999, the
enrollment rate stood at less than 1 percent. In response, the Office of
Personnel Management and DOD extended the open enrollment period for 60 days
and sent eligibles additional information, including a pamphlet that
answered questions about the demonstration and Medicare. In addition, DOD
held town hall meetings in each demonstration area. After this extension
period, enrollment had increased from the December level. Nonetheless, only
3 percent of eligibles have joined a DOD FEHBP health plan by mid-February
2000.
Given that the DOD is only 3 months into the demonstration, it is too early
to state definitively which factors account for low enrollment and whether
enrollment will increase next year. If DOD strengthens its marketing efforts
during the next open enrollment period (fall 2000), the enrollment rate may
increase. However, if the perception of high premiums is deterring people
from enrolling or if they are satisfied with their current coverage, then
any increase in the enrollment rate may be modest.
While offering older retirees the opportunity to participate in the FEHBP
could provide additional coverage for services not covered under Medicare,
DOD has estimated that providing this option across the nation could cost as
much as $1.6 billion annually. The potential costs could be significantly
higher if legislative proposals creating a more generous benefit were to be
adopted. One proposal recommends that all retirees and their family members
be offered enrollment in FEHBP, with the government paying the full costs
for certain retirees. Cost estimates for adopting this proposal run as high
as $10 billion per year.
Pharmacy Benefit Would Fill Major Coverage Gap
Older retirees participating in the TRICARE Senior Supplement demonstration
project will also receive a pharmacy benefit similar to the benefit offered
in the Pharmacy Pilot. This project, beginning this spring, will allow DOD
to assess the feasibility of providing health coverage to older retirees
through the TRICARE Standard and Extra options as a supplement to Medicare.
The policy would provide coverage for most of the retirees' out-of-pocket
costs for Medicare-covered services. Even though the older retirees must
have Medicare Part B and pay an annual enrollment fee of $576, this project
provides coverage at considerably lower costs than standard Medicare
supplemental policies. In 1999, the annual premium for a Medigap policy with
a $1,250 annual limit on drug coverage ranged from approximately $1,400 to
$3,000.
DOD estimates that the annual cost of expanding the Pharmacy Pilot project
to all older retirees would be between $400 and $600 million, and to provide
the TRICARE Senior Supplement could cost as much as $650 million per year.
In addition to the Pharmacy Pilot project for older retirees, the Congress
also mandated DOD to have a redesigned pharmacy benefit project in place for
all currently eligible beneficiaries. Savings achievable through a drug
benefit redesign such as we recommended in 1998 could help offset the cost
of providing a mail-order and retail pharmacy benefit to the older retirees.
Proposals Eliminating Copayments for Family Members Inconsistent With
Private Sector Practices
While uniformity in benefits is desirable and the elimination of copayments
will be popular among beneficiaries, we and the Congressional Budget Office
have reported that the lack of copayments results in unnecessary
utilization, which in turn could exacerbate difficulties military
beneficiaries have accessing the military health system. Another way to
achieve uniformity is to establish small copayments for care provided in the
MTFs, as is standard practice used in the private sector to curb excessive
use.
Dissatisfaction with Family Health Care and Retiree Health Benefits Are Not
Causing Servicemembers to Leave
As stated earlier, health care is considered one of the key quality-of-life
issues in the military. Health care is important to active-duty personnel,
and many report dissatisfaction with various aspects of the military health
care system, including getting appointments, and waiting times at the MTFs.
However, as we reported to you last week, health care was not among the most
common reasons cited by active-duty personnel for considering leaving the
military. Data from DOD's 1999 survey of active-duty personnel indicates,
for example, that only about 5 percent of the force consider military health
care for their families or themselves to be the primary reason for leaving
or for staying in the service.
Health care is also a very important issue to military retirees and, as
noted earlier, there is growing discontent among retirees with the health
care benefits available to them. However, health care for military retirees
has even less effect on retention decisions. Only 3 percent of the force
indicated that health care benefits for retirees was a top reason to leave.
However, 81 percent of them reported they were likely or very likely to stay
in the military for at least 20 years.
Larger Context of Right-Sizing the MHS Needs to be Considered
However, in terms of the MHS, an even more fundamental factor must be
considered. For several years, the size and structure of the military health
system relative to its primary wartime mission have been under evaluation,
and some have suggested that further downsizing and restructuring in line
with reduced wartime requirements may be in order. It is important to factor
the potential for such changes into the choices made about providing care
for an aging population through major new benefit programs. DOD's shift
toward managed care has increased its emphasis on primary care and specialty
care of chronic illnesses and therefore it is in a better position to meet
the needs of its nonactive-duty population. However, a health system that is
configured to meet these needs may be less well suited to the demands of
major mobilization and wartime conditions.
Some have suggested that if the system were being designed to meet today's
wartime requirements, it would be very different. For example, a 1995 study
suggested that DOD could reduce its capacity by two-thirds, eliminating all
but 11 of its hospitals, and still be able to meet a higher percentage of
wartime requirements than during the Cold War. The Congressional Budget
Office has estimated that if reductions of this magnitude were made in the
system, such substantial savings could occur that DOD could fund the
government share of FEHBP premiums for beneficiaries other than active-duty
service personnel.
However, before deciding on proposals that either retain care for older
beneficiaries in military facilities or provide for them entirely through
civilian sources, the training needs of DOD physicians may have to be
evaluated. To uphold the "medical readiness" tenet, military medical
facilities have a mix of patients of all ages to keep physicians prepared
for wartime. This may be difficult if more care is provided through civilian
sources. Moreover, it is important to consider the broad issue of whether
the physician mix of the military medical system is or should be adequately
equipped and trained to provide care for older patients.
Problems With Tricare Today
Need to Improve Appointment-Making Processes
As we reported in September 1999, active-duty and other Prime enrollees have
not been able to obtain appointments within the prescribed timeliness
standards. Moreover, performance in meeting standards is about the same for
active-duty members, who have the highest priority, and nonenrolled
beneficiaries, who have the lowest priority. For example, about 20 percent
of certain appointments for active-duty members were not scheduled within
the standards. In some cases, appointments are scheduled outside the
standards at the beneficiary's request for a later appointment to meet
personal needs. However, appointments within the standards for enrolled
beneficiaries may not be available because nonenrolled beneficiaries have
filled available appointment slots ahead of them. There are several options
DOD could test to improve the availability of appointments for active-duty
and other enrolled beneficiaries. These include more vigorously enforcing
systemwide access priorities, to the extent of giving appointments booked
for nonenrollees to enrolled beneficiaries in need of an appointment within
the standards.
We are currently assessing the extent to which the managed care support
contractors in Regions 1, 2, 5, and 11 are able to schedule appointments for
beneficiaries (one of the administrative tasks they are paid to perform). In
these regions, beneficiaries are instructed to call contractor staff using a
single toll-free number to make appointments at any MTF within their region.
However, our work to date shows that in these four regions, the contractors
scheduled only about one-fourth of all the appointments. The primary factor
affecting the contractors' ability to schedule appointments is the extent to
which the MTFs retain the booking function in the MTF. For example, in one
region, over one-third of the appointments are withheld from the contractor.
When a beneficiary calls the contractor to request an appointment that is
restricted, the appointment clerk may transfer the beneficiary to the MTF,
take a message and call the beneficiary back, or just tell the beneficiary
he or she has to call the MTF directly. Thus, what was intended to be a
simplified, more user-friendly process can now be a source of confusion and
complexity, with beneficiaries unsure as to whether to call the contractor
or the MTF to schedule appointments.
MTF physicians told us that some specialty and primary care appointments
should be retained and scheduled only by MTF clinic staff due to the complex
nature of the care to be provided. However, when comparing like clinics in
different MTFs, we found considerable differences in the percentage of
appointments scheduled by contractors. For example, the percentage of
dermatology appointments booked by contractors ranged from 88 percent in one
clinic to zero percent at six other dermatology clinics. Similarly, the
contractor scheduled 97 percent of optometry appointments at one clinic,
while zero percent were scheduled at eight other optometry clinics. This
difference suggests that the medical rationale may be less of a factor than
physician resistance to the system and desire to retain control of the
appointment function in the MTF.
Program Complexity Impedes Claims Processing Efficiencies
In response to our work, DOD has contracted with a consulting firm to assess
the claims processing system. Initiatives identified through this effort
include proposals to improve customer service, provider and beneficiary
education, and program-wide data quality; and increase electronic claims
processing. For example, DOD plans to utilize Medicare protocols for
electronic claims submission, including the use of Medicare's provider
identification numbers. In addition, DOD has authorized contractors to delay
the payment of paper claims as an incentive for providers to submit
electronically. This initiative mirrors Medicare's standards for faster
processing of electronic claims.
Concluding Observations
Further enhancing health benefits, especially for retirees, is likely to be
an expensive proposition and, with budget projections showing health care
consuming an ever-larger share of the DOD budget, efforts to shore up health
care delivery must be balanced against the effect that any changes might
have on establishing permanent claims and, thus, future resources. An
important factor to consider in this debate is whether further effort to
"right-size" the MHS would result in savings that could be used to fund
enhanced health benefits.
(101640)
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