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GAO: New health agency staffing in flux, savings unclear

Feb. 27, 2014 - 07:35PM   |  
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Staffing at the Defense Health Agency has grown by roughly 80 percent since the organization began coming together, but the Defense Department still expects zero growth — or even a decline — in employees once duplicate services are eliminated, Pentagon officials told Congress on Wednesday.

The agency was established last October to manage the common health services used by the military medical commands, including Tricare and pharmacy benefits, health information technology, education and more.

But despite promises that the agency’s creation will actually reduce staffing needs, its headquarters has grown from 1,081 to 1,941 people, a concern that prompted the House Armed Services Committee personnel panel to question Assistant Secretary of Defense for Health Affairs Dr. Jonathan Woodson and DHA director Air Force Lt. Gen. Douglas Robb on agency progress.

A Government Accountability Office report last November noted that DoD lacks baseline data for staffing levels in the military health system, raising questions about DoD estimates on how much in personnel costs will actually be saved by creating the agency.

“DoD identified estimated personnel savings as part its rationale for creating a new agency and used the data to say it would save almost $46 million .... but we still do not see any baseline assessments. We not believe at this time DoD officials can determine whether there will be an increase or a decrease in staffing,” GAO analyst Brenda Farrell said.

Woodson said “core staffing” — the number needed to run DHA without the personnel brought in from the services — has dropped from 900 to 754.

And once duplications of programs among the military services are eliminated, more savings are expected.

“It’s a complicated process. We are on a glide slope to reduce by 20 percent. We do understand that we have duplication; we’re going to have to sort these individuals out,” Woodson said.

He said DHA was projected to save $148 million in fiscal 2014 and saw $80 million in savings in the first quarter alone.

The DHA oversees about half of the common health services used by the military medical commands, such as Tricare and pharmacy benefits, health information technology, medical logistics and facilities planning.

It is working toward taking responsibility for five additional “shared services” — public health, medical acquisition, budget and resource management, medical education and training, and medical research and development — by Oct. 1, 2015.

The initial phase could save the government $1.5 billion to $2.9 billion over the next six years, according to Pentagon estimates provided to Congress last year.

Farrell warned defense officials to carefully monitor the agency’s progress and perform detailed business case analysis to nail down sources of savings.

“DoD senior leadership needs to take additional action to increase transparency and enhance accountability,” she said.

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