In 2013, officials at the Defense Health Agency were handed a mandate: Create an organization to oversee aggregated medical functions to support the military health system, much as the Defense Logistics Agency and Defense Information Systems Agency do to supply nuts, bolts and technology to operational commands.

Two years after DHA stood up on Oct. 1, 2013 — in the midst of a budget-fueled government shutdown — the agency marked its "full operational capability" Thursday, with leadership reflecting on accomplishments while celebrating, for now, the sidestepping of another shutdown.

With 1,700 employees — many of whose jobs were transferred from the individual military — the agency oversees what were once duplicate functions within the service medical commands. It's also responsible for the Tricare health program, pharmacy operations, medical facilities, planning, logistics, IT, medical training and education, research and development, acquisition and more.

Dr. Jonathan Woodson, assistant secretary of defense for health affairs, described the challenge of consolidation as enormous and praised the leaders, enlisted personnel and civilian employees who made it happen.

"The Defense Department and the military services understand that the provision of quality medical care should [troops] become ill or injured is of paramount importance," Woodson said. "Although it's tough sometimes to achieve 'jointness,' we did this because this was the way we were going to provide the highest quality care."

In fiscal 2014, the agency achieved a cost-savings of $350 million and expects to save the Defense Department $3.5 billion over the next four years through streamlined programs and eliminated redundancies.

According to a meritorious unit award the agency received Wednesday, it saved $236 million in its first year of performance.

DHA was created from the recommendations of a task force formed in 2011 to study options for defense health operations and trim DoD's burgeoning health budget.

The task force recommended an agency led by a three-star officer reporting to the assistant secretary that would be designated as a combat support agency.

But the task force's recommendations — the 18th attempt to reorganize the defense health system since the 1950s — were met with skepticism, said Air Force Lt. Gen. Doug Robb, DHA director, who served on that task force.

A Government Accountability Office study said the idea was ill-conceived, lacked a satisfactory business analysis and implementation plan and contained personnel savings estimates based on "potentially flawed assumptions."

Air Force Lt. Gen. Douglas Robb, director of the Defense Health Agency

Photo Credit: Mike Morones/Staff

But as Robb pointed out Thursday, the agency is performing well, supporting military health operations at treatment facilities around the world, overseas with the West Africa Ebola deployment and in the private sector with Tricare.

"The fact that we are here today is a testament to everyone in the Defense Health headquarters — the services and the DHA. Any success is shared success; working together is not only necessary, but right." Robb said.

Earlier this year, a blue ribbon panel assigned to study military pay and benefits and make recommendations for the future called for a complete overhaul of the military health system, to include privatizing health care for a large swath of Tricare beneficiaries — all family members and military retirees — and altering the medical command structure to preserve military treatment facilities but make them competitive with private care.

Congress integrated several of the Military Compensation Modernization and Retirement Commission's recommendations into defense legislation this year, but said those far-reaching health care proposals merit further study.

Lawmakers have not ruled out Tricare reform, however. Rep. Joe Heck, R-Nev., chairman of the House Armed Services Committee's personnel panel, said in April that a stand-alone military health reform bill could come out this year or be included in the fiscal 2017 defense authorization bill.

Woodson said changes underway within the military health system and the success of DHA make a "good business case" for continuing on the path of the Pentagon's vision for reform.

"Without a strong U.S. military medical system, you will, in fact, weaken the entire U.S. military, weaken our military medical strategy and weaken our national security strategy," Woodson said. "Medical care ... can't be outsourced."