As the Defense Health Agency continues to assume management of all Army, Navy and Air Force medical facilities, Army Secretary Ryan McCarthy is calling for a temporary halt to the takeover.

He also is seeking to block the transfer of the Army Public Health Center and Army Medical Research and Development Command to the agency, as required by law.

In a memo sent to Deputy Defense Secretary David Norquist Dec. 20, McCarthy voiced concerns with what he sees as the “lack of performance and planning with respect to the transition” by the Defense Health Agency and Defense Department Health Affairs.

He also objected to handing over the service’s public health and research commands, arguing they support military readiness, combat casualty care and other military functions that aren’t necessarily relevant to the type of care provided at military medical facilities run by the Defense Health Agency.

If the merger occurs “too fast, you can make a mess,”McCarthy told defense reporters Jan. 15.

“Like all mergers, you’re bringing thousands of people and functions to one organization. Like all mergers and acquisitions, there are cultural dynamics, synergies you try to achieve … it’s not altogether clear how that’s coming together,” McCarthy said at Defense Writers Group meeting in Washington.

The Defense Health Agency began taking over management and oversight of military health facilities in October 2018, part of congressionally-mandated reforms designed to streamline operations across the Defense Department health system, standardizing and improving health services and reducing duplication created by individual medical commands.

In October 2019, all facilities in the continental United States were transferred, with the remainder expected to be consolidated under DHA by October 2021.

But in the memo, McCarthy said DHA and DoD Health Affairs have “failed to provide a clear plan forward.”

“Until DHA can manage our hospitals, I have serious concerns about their ability to lead our public health, research and development and operational logistics assets,” McCarthy wrote.

The fiscal 2017 National Defense Authorization Act instituted a massive overhaul of the military health system, to include changes to the Tricare health program and transition of all budgetary matters, information technology, health care administration, policy and procedures and military construction of military health facilities to the Defense Health Agency.

Under the reforms, the service medical departments are to remain responsible for providing health care and services to U.S. troops and civilian employees and ensuring the readiness of medical corps personnel.

McCarthy said with DHA focused on building a world-class health system, while also introducing a new department-wide electronic health records system, “transferring medical research and public health to the DHA during an already complex reform effort poses significant risk to systems that serve our warfighters and beneficiaries.”

McCarthy’s comments represent the first public statements by a military service in opposition to the transformation, which gave tremendous decision-making power and budgetary authority to the Defense Health Agency director and reduced the service surgeons general roles as well as their manpower — the transition calls for cutting roughly 18,000 military medical personnel.

Behind the scenes, some military physicians have expressed dismay over the proposed cuts, which may reduce the size of the Uniformed Services University of the Health Sciences and will split hospital budgets between the Defense Health Agency and the services.

“Most of us can’t get the training we need. Additionally, we will have to send patients out to the network, where Tricare will charge much more,” a Navy doctor told Military Times.

But when asked about potential budget cuts and the impact to non-active duty beneficiaries of the transformation at the annual meeting in December of AMSUS, the Society of Federal Health Professionals, the surgeons general remained silent while Army Lt. Gen. Ronald Place, director of DHA, responded.

“I’m not aware of anyone’s budget being cut by 50 percent, that’s for sure, and I’m not aware of any training cuts … Appropriations comes through the Defense Health Agency and it is shared with the military services, as they are in direct support,” Pace said.

“In terms of the way we are handling our families, I won’t disagree that in some cases over the years we looked to make some of organizations bigger, we looked to recapture our beneficiaries. But just as the mission of a location will change, what we do at that particular location may also change,” Pace said. "The Army transitioned hospitals at Fort Knox, Fort Jackson and Fort Sill and went through the process of disenrolling retirees, retiree family members and some [active duty] family members … as an evolving organization we will have changes.

McCarthy has drafted legislation that would repeal the requirement for the Army to transfer its research and development and public health commands to a new Defense Health Agency Research and Development and Defense Health Agency Public Health offices.

Monica Matoush, a spokeswoman for Democrats on the House Armed Services Committee, said members are aware of McCarthy’s memo and will consider any official legislative proposal they receive from the Army through the Office of Management and Budget.

However, she added, the “law provides ample time to transition the MTFs to the DHA before focusing on transferring and consolidating military research.”

“The committee held a public hearing on the military health system reform in December, and the secretary’s concerns were not brought to the committee’s attention during testimony,” Matoush said. “The transfer of MTFs should happen in a responsible deliberate manner, and does not need to be rushed to jeopardize service member or beneficiary care … the committee believes there is a balance of readiness and beneficiary care and the MHS reform was designed to provide flexibility.”

Also responding, a spokeswoman for the Senate Armed Services Committee cited the report generated by a bipartisan committee that crafted the final version of the fiscal 2020 National Defense Authorization Act:

“The conferees are aware of a lack of consensus in the department on implementing the reforms required by law but see no reason to change direction. The conferees expect the Secretary of Defense to fully implement the law and to accomplish these critically important reforms expeditiously,” they wrote.

The Defense Department did not respond to a request for comment on the memo.

McCarthy said he simply wants to make sure the changes don’t negatively affect troops.

“Health care of our people is one of the most important things that we do. So how we conduct this merger and understand the operating model of the Defense Health Agency, how you’re going to transition the responsibility to them is incredibly important. And it’s not altogether clear how that’s coming together,” he said.

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

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