Two of the military’s top doctors said the Pentagon’s effort to transform and reorganize the military health system is turning out to be a “complicated merger of four cultures” and “extremely difficult," suggesting that the Defense Health Agency isn’t ready for some of the coming changes.

The Defense Department is in the middle of a decade-long effort to transform its health care system, which will shift responsibility for local military treatment facilities, or MTFs, away from the individual services and put it for the first time under the DHA. The aim is to allow the military medical commands to focus more on providing health care to troops and medical readiness.

The DHA — historically a bureaucracy focused on managing contracts rather than actual hospitals — is expected to assume management of all military health facilities within the next two years, and the Pentagon is poised to jettison 200,000 non-uniformed patients from 37 military hospitals and clinics.

Throughout the process, the service surgeons general have remained relatively silent on the subject. But during a hearing Thursday on the defense health program’s fiscal 2021 proposed budget, Air Force Surgeon General Lt. Gen. Dorothy Hogg described it as a “complicated merger of four cultures” and Army Surgeon General Lt. Gen. Scott Dingle called the process “extremely difficult.”

The plan has been for DHA to assume responsibility for duplicate functions within the service medical commands like planning, logistics, training and acquisition, and a significant part of the reform is oversight of the MTFs.

That plan has been fast-tracked as top officials have moved up the timeline for the organizational changes. The original plan was to transfer half of the MTFs in the U.S. to DHA on Oct. 1, 2019, and the remainder of domestic facilities going in 2020, with overseas facilities transferring in 2021. But that plan was revised; on Oct. 1, 2019, DHA took responsibility for all domestic military hospitals and clinics and the overseas facilities are expected to follow in the next couple of years.

Both said the goal of transferring management of the military health facilities to DHA is attainable, but DHA needs to be “standing on its own” first.

“We’ll get there as long as we’re using ‘manageable risk,’” Hogg said. “What that means is we need to transition before we transform.”

“In order to get it right, the focus should be on the [military treatment facility] transition, which starts with the standing up of [DHA] headquarters. If that headquarters is not up and running, it will continue to require direct support,” Dingle said.

Navy Surgeon General Rear Adm. Bruce Gillingham did not weigh in on the topic, which was raised by Rep. John Carter, a Republican from Texas.

The reform plans call for DHA initially overseeing the facilities “through a direct support relationship with the military medical departments.”

It’s that “direct support relationship” that may continue for some time, the surgeons general said.

“We need to be able to continue supporting the Defense Health Agency; stand up its capabilities to manage these military treatment facilities, because if you remember from the past, DHA didn’t come out of that, [it] came out of the Tricare Management Activity. Their core competency was writing and managing contracts, not managing MTFs,” Hogg said. “I would ask we not add additional system changes until the DHA is standing on their own ... with demonstrated success for a period of time."

“After you get the HQ stood-up, you can start to transition the military medical treatment facilities and you should also focus that transition on the electronic health records,” Dingle said.

The Pentagon has requested $50.8 billion in next year’s budget for the military health system, including $33 billion for the defense health program. The funds are to support health care and services for DoD’s 9.5 million beneficiaries as well as military health reform, research and development and the department’s implementation of its electronic health records system.

But in the hearing Thursday, Rep. Betsy McCollum, a Democrat from Minnesota, chairwoman of the subcommittee, expressed concern about the pace of some proposed changes and their impact on patients, especially those who will be sent to the private sector to get health care.

McCollum requested supporting documents to a Feb. 19 DoD report listing 50 military treatment facilities targeted for significant changes, saying that without the background information, the appropriations committee “doesn’t feel its fully informed and ready to go.”

The report, Restructuring and Realignment of Military Medical Treatment Facilities, is little more than a “list of impacted facilities,” she said.

“How can you expect us to do due diligence with the appropriate necessary funds when we haven’t seen a comprehensive plan from the department on what, when, or how this restructuring will be implemented?” McCollum asked.

The military health system reforms represent a systemic shift. Historically, the MTFs have provided in-house care for all beneficiaries located near military treatment facilities. Under the new reforms, however, the MTFs would focus on serving military personnel and concentrating on medical training on-base while pushing non-uniformed beneficiaries — such as active-duty families, retirees and their family members — to rely more on civilian providers and the Tricare program for care.

According to the report, more than 200,000 Tricare beneficiaries, including 80,000 active-duty family members, will no longer be seen at 37 military health clinics across the country, and an additional 13 facilities will undergo restructuring, with some gaining or losing departments or capabilities.

McCaffery said the changes are being done under two “critical guiding principles.”

“First, our military hospitals and clinics are first and foremost military facilities whose operations need to be focused on meeting military readiness requirements … second, as we reform the military health system, we continue to make good on our commitment to provide our beneficiaries with access to quality health care,” McCaffery said.

DoD officials stressed that the changes will not result in additional out-of-pocket costs for active duty families, unless they decide to fill prescriptions off-base or through Tricare’s mail order program.

Also, the plans will not affect beneficiaries in locations that DoD has determined do not have the capacity to care for family members or retirees.

Still, the shift will significantly affect many “working age” retirees and their family members — those under age 65 who do not qualify for Medicare and Tricare for Life — as they will incur co-pays and cost-shares not required at military health facilities.

Defense Department officials say the changes are being made under orders by Congress, which wanted to eliminate duplication of services such as administration, education, training, information technology support and logistics across the Army, Navy and Air Force medical commands.

With the renewed focus on readiness, the military services also are cutting roughly 18,000 uniformed medical billets — but exactly what types and who will be affected is not known because the Defense Department has not yet released a report due on that effort.

McCollum said she needs more information before proceeding with the appropriations process and approving the budget request for next year.

“While I understand the department wants to focus on increased medical readiness of our troops and medical forces, the impact of this organization is significant. And trust me, we will hear from the individuals that are impacted by these changes,” she said.

Patricia Kime is a senior writer covering military and veterans health care, medicine and personnel issues.

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