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CHAPTER 26 The Military Managed Care Health System M. NICHOLAS COPPOLA, RONALD P. HUDAK, FOREST S. KIM, LAWRENCE FULTON, JEFFREY P. HARRISON, AND BERNIE J. KERR, JR.
STUDY OBJECTIVES
• Understand the difference between direct care and purchased care • Understand the importance of readiness in the military health system • Understand the governance process in military managed care • Understand TRICARE performance metrics • Understand the in�luence of outside stakeholders on military health care policy • Understand the current and future challenges faced by the military health system • Understand the relationships and competing priorities of actors within the Managed Care Quaternion
DISCUSSION TOPICS
1. Discuss the following statement made by a former Assistant Secretary of Defense for Health Affairs, “The military health system operates the only health maintenance organization that goes to war.” Why is this statement important in understanding the military health system?
2. Discuss key legislative events in military health care that resulted in the implementation of the current TRICARE program. 3. Discuss key differences and advantages of TRICARE Prime, Extra, and Standard. What other TRICARE programs are available for speci�ic
bene�iciaries? 4. Discuss the historical events that resulted in “TRICARE for Life” becoming a right for eligible bene�iciaries. 5. Discuss opinions on how best to ensure the survival of the military health system. 6. Discuss and describe the Parity of Healthcare.
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INTRODUCTION
This chapter discusses the Military Health System (MHS). The MHS operates a specialized form of managed care called TRICARE and responds to the challenge of maintaining medical combat readiness while providing health services for all eligible bene�iciaries. TRICARE brings together the worldwide health resources of the Army, Navy, Air Force, Coast Guard, and Commissioned Corps of the Public Health Service (often referred to as direct care) and supplements this capability with network and non-network civilian health professionals, hospitals, pharmacies, and suppliers (referred to as purchased care) to provide better access and quality service while maintaining the capability to support military operations. In essence, TRICARE can be considered a group of health plans within the MHS.
On the direct care side, the MHS, worldwide, oversees over 50 military hospitals and medical centers, 364 medical clinics, and 282 dental clinics at the time of publication. The MHS also operates a fully accredited medical school, graduate programs, and 36 medical research laboratories. It also offers scholarships at a number of major universities as well as broad programs in medical research and development. Each service’s medical department is headed by a Surgeon General who is the senior of�icer, meaning general of�icers in the Army and Air Force and an admiral in the Navy.* (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26fn1) Each military Surgeon General is responsible for the care provided in his or her respective service’s military treatment facilities (MTFs). MTFs are analogous to civilian medical centers, hospitals, and health clinics.
In the purchased care side, there are over 380,000 network providers and over 60,000 retail pharmacies. In a typical week, the MHS does more than 23,000 inpatient admissions; 1.8 million professional encounters (outpatient); 2,400 births; 230,000 behavioral health outpatient services; and �ills 2.6 million prescriptions. In addition, over 3.5 million claims are processed and 12.6 million electronic health record messages are completed.1 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en1)
TRICARE offers a range of primary, secondary, and tertiary care health services to almost 10 million eligible bene�iciaries with an annual cost of over $49 billion. Approximately 3.7 million are enrolled in the direct care system, 1.6 million are enrolled in TRICARE’s purchased care contractor networks, and the remainder are in other TRICARE programs. A unique aspect of military managed care is the MHS’s readiness mission. Readiness is de�ined as the ability of forces, units, technical systems, and equipment to deliver the output for which they were designed.2 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en2) Readiness is also associated with maintaining the health status of active duty personnel well above the health standing associated with nonmilitary personnel. Furthermore, readiness is synonymous with ensuring ef�icient supplies are available for national disasters and war, and ensuring that appropriate processes are in place to support mobilizations. This means that readiness is associated with the ability of certain elements of brick-and-mortar health care facilities to become mobile and deploy worldwide when necessary. Finally, readiness is concerned with operations management processes and the ef�icient and effective use associated with the transformation of inputs into outputs. No other managed care plan in the United States—or the world—has a similar focus and responsibility. Former Assistant Secretary of Defense for Health Affairs Dr. Sue Bailey once said that the military health system operates the only health maintenance organization (HMO) that goes to war.3 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en3)
To understand the current structure and process of military managed care, it is �irst necessary to review the seminal events in military managed care evolution. Factors affecting military managed care evolution stem from issues in war, directives from Congress, bene�iciary demands, and adoption of civilian best practices over 200 years. In contrast, some civilian managed care practices may have antecedent roots in earlier military health programs. The end result is a civilian managed care system with undeniable ties to military initiatives and a military managed care system that is similar to civilian managed care in many ways while still maintaining distinctiveness in mission and purpose. In essence, the MHS can be considered:
• A provider of health care; • An employer of health care professionals; • An insurer of bene�iciaries; • An educator of clinical and nonclinical personnel, unique within the U.S. health care industry; • A military component prepared to go anywhere, anytime in defense of our nation.
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26.1 BRIEF HISTORY OF THE MILITARY HEALTH SYSTEM
Military health care began when the country did, and has undergone considerable and continual change. The history of the military health system is brie�ly described next.
The Revolutionary War through Post World War II
The history of military health care traces its origins to the establishment of the Army Medical Department on July 27, 1775. During the American Revolution, military health care was delivered in the �ield, often in churches and barns. After 1777, several �ixed facility hospitals were established in various northern states. On March 2, 1799, Congress established An Act to Regulate the Medical Establishment. This legislation gave the Physician General (renamed from the Director General and Chief Physician) the authority and responsibility of overseeing the development of (primarily) Army hospitals. That same year, General George Washington approved the construction of one of the �irst military hospitals in the Colonies, in Morristown, New Jersey. Although the act did not provide for dependants of one service to be treated in the hospital of another branch of service, both the Army and the Navy routinely took care of members from their sister service.4 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en4) , 5 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en5)
One of the other unique features of the 1779 Act was a directive to collect prospective payments for health care services. The 1779 Act also directed the Secretary of the Navy to deduct 20 cents a month from the pay of sailors and marines for their care in civilian treatment facilities. Proceedings suggest that the practice of collecting money for health care services not received—but promised at some future time and place—may represent the �irst time in U.S. managed care history that prospective health services were established in the United States health system.6 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en6)
From the Revolutionary War through the Civil War, the military attempted to differentiate between care for dependants and active duty access. However, the westward growth of the nation required Army posts to be located in remote areas with no alternative access to health care. As military posts expanded west, families accompanied soldiers. Although departmental regulations prohibited military surgeons from treating civilians, some exceptions were granted. Finally, in 1834, the Adjutant General ruled that military surgeons had permission to treat civilians when it did not interfere with their required military duties.7 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en7) This policy established the bene�it—and later entitlement—to free health care for authorized dependants of the military that currently exists. More important, this may also be the �irst instance in U.S. health care that nonmonetary bene�its, speci�ically health care bene�its, were granted by an organization to family members of the employed person. The preponderance of the civilian sector did not adopt a similar provision for providing free health care to an employed person’s family on a regular basis until the next century, as described in Chapter 1 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i9#ch01) .
CHAMPUS and the Modern Military Health Care Era
In 1956, in an effort to keep up with a growing civilian trend to offer health care bene�its and entitlements to retired persons, Congress enacted the Dependants Medical Care Act. This act provided that “medical and dental care in any medical facility of the uniformed services may, under regulations prescribed jointly by the Secretaries of Defense and Health, Education and Welfare, be furnished upon request and subject to the availability of space, facilities, and capabilities of the medical staff, to retired members of uniformed services.” The act additionally applied to dependants of uniformed retirees. The signi�icance of the Act was that it legitimized standing policies already in widespread application throughout the military health system.8 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en8) In 1965, Congress created Medicare and Medicaid. One of the original goals of Medicare was to provide health care for retired workers who were no longer covered by a health plan after retirement. However, a problem existed for many military personnel who often retired from a military career in their mid- to late 40s. As a result of the space availability clause of the Dependants Medical Care Act, a problem arose where some military retired members could not gain access to MTF—and were too young to participate in Medicare. As a result, some service members found themselves paying for medical care in civilian institutions out of pocket.
In an effort to address the inability to gain access to health care for some categories of bene�iciaries, Congress amended the Dependants Medical Care Act and created the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). CHAMPUS was created under Public Law 89-614, the Military Medical Bene�its Amendments Act of 1966. Modeled after the Blue Cross and Blue Shield options of the time, CHAMPUS was a fee-for-service bene�it that provided for comprehensive medical care when there was no space available in the MTF.9 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en9) For the �irst time in the history of the military, two different systems existed to provide care to bene�iciaries. The resulting composite organization was composed of a direct military care system for active duty personnel that used all available military hospitals and clinics, and a second system monitored through CHAMPUS that acted as a gatekeeper to the civilian care system.10 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en10) Although CHAMPUS did not require a monthly premium like Medicare did (for Part B only; see Chapter 24 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i283#ch24) ), CHAMPUS had an annual deductible and a cost share for care received outside of the MTF.
Through the late 1980s, CHAMPUS bene�its remained relatively stable and unchanged. However, spiraling health care costs in the 1980s affecting civilian health care organizations also began affecting CHAMPUS. As a result, the Department of Defense (DOD) began to explore options and alternatives to control costs, monitor access, and maintain health care quality. One option centered on closing inef�icient military hospitals. The second option focused on reengineering military health care.
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The �irst option implemented by Congress to control military health care costs was the Base Realignment and Closure (BRAC) initiative. From 1987 through 1997, Congress mandated a 35% reduction of military health care assets.11 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en11) The second option focused on quality and access and resulted in a series of �ive notable demonstration projects initiated from 1986 through 1993. These demonstration projects were conducted to validate the ability to use de�ined civilian networks effectively to treat military bene�iciaries as well as to conduct a cost-bene�it analysis between purchased civilian health care services and CHAMPUS expenditures. These demonstrations included the CHAMPUS Reform Initiative (CRI), the New Orleans managed care demonstration, Catchment Area Management (CAM) projects, the Southeast Region Preferred Provider Organization (PPO) demonstration, and the Contracted Provider Arrangement (CPA) in Norfolk, Virginia.12 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en12) –14 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en14) For a more detailed review and historical presentation of these projects, readers are referred to the third edition of The Managed Health Care Handbook.15 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en15)
CHAMPUS Demonstration Project Outcomes and the Creation of TRICARE
In 1993, the CHAMPUS demonstration projects suggested a reorganization of military health care by providing some evidence that civilian managed care techniques could help the military contain costs, improve quality, increase access, and advance patient satisfaction. In 1994, Congress enacted the National Defense Authorization Act (NDAA). The NDAA directed the DOD to prescribe and implement a health bene�it option for bene�iciaries eligible for health care under Chapter 55 of Title 10, United States Code (USC). The NDAA also directed the military health system to implement health programs modeled on managed care plans in the private sector.
In response to the DOD and Congress, the military health system developed the military managed care plan called TRICARE. TRICARE’s name was coined to represent the three primary military services involved in providing health care to DOD bene�iciaries (Army, Navy, and Air Force). The name also represents the three managed care options originally developed to administer care, called TRICARE Prime, TRICARE Extra, and TRICARE Standard (Table 26-1 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26tab1) ). Although several others have been added since TRICARE’s inception, most MHS bene�iciaries are enrolled in these three options. Overall, TRICARE adopted several successful managed care features, such as primary care managers, gatekeeper access, enrolled bene�iciaries, and empanelled providers. The program also includes case, disease, risk, and utilization management principles.
Enhanced TRICARE Bene�its
TRICARE continually seeks to enhance the bene�it offered to uniformed service members, their families, and retirees and their families. As a result, in addition to the managed care options of Prime, Standard, and Extra, several niche-speci�ic programs and adaptations have evolved to provide bene�its to a larger population of bene�iciaries. The preponderance of these programs resulted from initiatives in Congress to improve health care access and quality of care. One of the most signi�icant changes to TRICARE came about with the signing of Public Law 106-398 as part of the 2001 NDAA. Dr. J. Jarrett Clinton, the acting Assistant Secretary of Defense for Health Affairs in 2001, said, “Collectively, this act represents the most signi�icant change to military healthcare bene�its since the implementation of the CHAMPUS in 1966.”16 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en16) The 2001 NDAA authorized several key TRICARE improvements, including the following:
1. Established TRICARE as the secondary payer for Medicare-eligible military retirees (MEMR); 2. Established a pharmacy bene�it for MEMR called TRICARE Senior Pharmacy Program (TSPP); 3. Established a MEMR Healthcare Trust Fund (HCTF); 4. Eliminated copayments for TRICARE Prime active duty family members; 5. Expanded TRICARE Prime Remote; 6. Introduced chiropractic care for active duty soldiers; 7. Established the Individual Case Management Program (ICMP) for persons with extraordinary conditions; and 8. Reduced the catastrophic cap from $7,500 to $1,000 for active duty families and $3,000 for all others.17
(http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en17)
Other mentionable bene�its included in this Act were permanent health bene�its for Medal of Honor recipients and their families, extension of medical and dental bene�its for survivors of deceased active duty soldiers, and authorization of payment for school physicals. The 2001 NDAA also authorized the DOD to expand TRICARE health bene�its to niche-speci�ic programs. The signi�icant programs that were eventually enacted as a result of the original 2001 NDAA—and subsequent amendments—included TRICARE for Life, TRICARE Reserve Select, and the TRICARE Dental Program.
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26.2 THE TRICARE PROGRAM
The components of the TRICARE program are discussed next.
TRICARE and the Patient Protection and Affordable Care Act
TRICARE is an entitlement program, meaning anyone who quali�ies as eligible can enroll in TRICARE (eligibility is discussed next). Because it is an entitlement program, it is not affected by the Patient Protection and Affordable Care Act (ACA). The two other major entitlement programs, Medicare (Chapter 24 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i283#ch24) ) and Medicaid (Chapter 25 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i298#ch25) ), are addressed speci�ically in the ACA, but as separate Titles within the Act, not by inclusion with the new nonentitlement health bene�its coverage requirements; TRICARE, however, is not addressed in the ACA at all.
Long before passage of the ACA, TRICARE already met all but one of the major coverage requirements, bene�its, and prohibition on various limitations that the ACA now requires for commercial coverage by 2014. The only one it didn’t meet, extending coverage to children of covered individuals up to age 26 if those children do not have access to coverage through their own work, was resolved when the NDAA of �iscal 2011 authorized the premium-based Young Adult Program that provides for this type of coverage extension. The ACA is not addressed further in the chapter.
TABLE 26-1 TRICARE Bene�iciary Costs, 2010
Source: TRICARE: Summary of Bene�iciary Costs, www.tricare.mil/mybene�it/Download/Forms/Bene_Cost_Br_L_011510.pdf (http://www.tricare.mil/mybene�it/Download/Forms/Bene_Cost_Br_L_011510.pdf) . Accessed November 2, 2010.
TRICARE Eligibility
TRICARE is the health care program serving active duty uniformed service members, National Guard and Reserve members, retirees, their families, survivors, and certain former spouses worldwide of the U.S. Army, U.S. Navy, U.S. Air Force, U.S. Marine Corps, U.S. Coast Guard, as well as the Commissioned Corps of the U.S. Public Health Service and the National Oceanic and Atmospheric Administration. Family members include spouses, unmarried children under age 26, and stepchildren adopted by the sponsor. National Guard and Reservists become eligible for TRICARE when called to active duty for more than 30 days. All who are eligible for TRICARE must be listed in the Defense Department’s worldwide, computerized database, the Defense Enrollment Eligibility Reporting System (DEERS). The following are not
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eligible for TRICARE bene�its: parents and parents-in-law of active duty service members, or retirees and people who are eligible for health bene�its under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). Out-of-pocket costs for each TRICARE option are provided in Table 26-1 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26tab1) .
TRICARE Governance
To implement and administer TRICARE, in 1994, the DOD originally reorganized the military health system into 12 joint-service regions. All 12 regions were subordinate to the TRICARE Management Agency (TMA). The decision to separate contracts for different TRICARE regions was made in an effort to prevent any one contractor from having too much control over the care delivered to DOD bene�iciaries.
In 2004, the Assistant Secretary of Defense (Health Affairs) and the services’ Surgeons General established a governance structure consisting of three TRICARE regions. The new governance structure is designed to monitor performance and resolve problems at the lowest possible level for managing the military health bene�it with force readiness as the �irst priority, followed closely by bene�iciary satisfaction. Each of the three TRICARE regions in the United States has a regional contractor to coordinate medical services available at the MTF and the civilian network. The regional contractors work with the TRICARE regional of�ices (TROs) to manage TRICARE at a regional level. Both the regional contractors and the TROs receive overall guidance from the TMA. The three TRICARE regions are organized geographically into a North, South, and West region, as depicted in Figure 26-1 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26�ig1) .
Governance of the three TRICARE service regions remains complex. The TRICARE regional of�ices are responsible for planning, coordinating, and monitoring all health care delivered throughout their region. Additionally, each region establishes contracts with civilian health care organizations to provide medical care to bene�iciaries. However, both military commanders and civilian contractors struggle with dual missions to maintain wartime readiness requirements and peace time bene�iciary health care with limited budgets in a not-for-pro�it environment.
TRICARE Program Options
The TRICARE program has three main options: TRICARE Prime, TRICARE Standard, and TRICARE Extra. There are also three additional options available under certain circumstances: TRICARE for Life, TRICARE Reserve Select, and TRICARE Retired Reserve.
TRICARE Prime
TRICARE Prime is the HMO-like plan in which bene�iciaries enroll in this bene�it option where it is offered. Each enrollee chooses, or is assigned, a primary care manager (PCM), a health care professional who is responsible for helping the patient manage his or her health, promoting preventive health services (e.g., routine exams, immunizations), and arranging for specialty provider services as appropriate. Prime offers enrollees additional bene�its such as access standards in terms of maximum allowable waiting times to obtain an appointment, emergency services (24 hours per day, 7 days per week), and waiting times in doctors’ of�ices, as well as preventive and wellness services (routine eye exams, immunizations, hearing tests, mammograms, Pap tests, prostate examinations). A point-of-service (POS) option permits enrollees to seek care from non-network providers, but with signi�icantly higher cost-sharing.
Active duty service members must enroll in TRICARE Prime and must receive all health care bene�its at an MTF unless otherwise authorized. All health care bene�its are free, and there are no out-of-pocket costs to service members. TRICARE Prime is also available to other eligible bene�iciaries, such as family members of active duty service members and retirees under age 65. If enrolled in TRICARE Prime, active duty family members must also receive health care at an MTF unless otherwise directed. Retirees not eligible for Medicare can enroll in TRICARE Prime; however, they must pay an annual enrollment fee as well as copayments for care received in civilian facilities. TRICARE Prime enrollees must follow well-de�ined rules and procedures. Failure to follow strict TRICARE Prime guidelines may result in refusal of care, refusal of payment, and costly POS option charges.
FIGURE 26-1 TRICARE Regions Source: TRICARE Choices: Your Guide to Selecting the TRICARE Program Option That’s Best for You. Available at: www.tricare.mil/mybene�it/Download/Forms/Choices_Handbook.pdf (http://www.tricare.mil/mybene�it/Download/Forms/Choices_Handbook.pdf) . Accessed
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November 2, 2010.
In addition to low to no out-of-pocket costs, an advantage of being enrolled in TRICARE Prime is the policy-directed access to care standards for appointments. Access to care standards differ by the level of care sought. For emergency care, MHS bene�iciaries have the right to access emergency health care services when and where the need arises. For urgent (acute) care, the standard is an appointment within 24 hours and within 30 minutes travel time; routine care within 7 calendar days and within 30 minutes drive time; for wellness and specialty care, the appointment must be within 28 days and within 1 hour drive time from the bene�iciary’s residence. If these access standards cannot be met, TRICARE offers the bene�iciary a referral and authorization to seek care in the civilian network. Moreover, TRICARE access standards state that of�ice waiting times in nonemergency circumstances shall not exceed 30 minutes for Prime enrollees.
For service members and their families who do not live near an MTF, TRICARE offers TRICARE Prime Remote (TPR). TPR is speci�ic to certain geographic locations, and eligibility is based on residence and/or work address. To be eligible for TPR, active duty members and their families must live and work more than 50 miles—or approximately 1 hour drive time—from the nearest MTF. TPR offers the same access standards and low out-of-pocket costs as TRICARE Prime. Like TRICARE Prime, enrollment in TPR is required.
Another TRICARE Prime option is the Uniformed Services Family Health Plan (USFHP) and is available to active duty family members, retirees, and their eligible family members (including those age 65 and older regardless if they are enrolled in Medicare Part B). The USFHP is available through networks of community-based, not-for-pro�it health care systems in six areas of the United States. Enrollment in USFHP is required and enrollment fees apply for retirees and their eligible family members. If enrolled in USFHP, access to care at an MTF or use of MTF pharmacies is excluded. This managed care option has the same coverage and costs as Prime, but also offers additional services at the local level.
TRICARE Standard
TRICARE Standard is the traditional indemnity bene�it, also known as fee-for-service (FFS), and formerly known as CHAMPUS. It is open to all eligible Department of Defense bene�iciaries, except active duty service members and, until recently, Medicare eligibles. No enrollment is required to obtain care from civilian providers. TRICARE Standard gives bene�iciaries the option to see any provider. Advantages include a wider selection of providers and health care facilities and the option to participate in TRICARE Extra. There is no required annual enrollment, and the option offers comprehensive health care coverage for bene�iciaries not enrolled in TRICARE Prime.
While Standard offers the greatest �lexibility in choosing a provider, the plan also has the most out-of-pocket cost-sharing by the bene�iciary; for example, TRICARE Standard requires that the bene�iciary satisfy a yearly deductible before TRICARE cost-sharing begins. Furthermore, the plan requires bene�iciaries to pay copayments or cost shares for outpatient care, medications, and inpatient care. Another disadvantage is that the patient may also be required to �ile his or her own claims. Finally, the option also does not provide a PCM bene�it.
TRICARE Extra
TRICARE Extra is based on a civilian PPO model in which bene�iciaries eligible for TRICARE Standard may decide to use preferred civilian network providers on a case-by-case basis (they may switch between the Standard and Extra bene�its). TRICARE Extra is open to any TRICARE-eligible bene�iciary who is not active duty, not otherwise enrolled in Prime, and not eligible for TRICARE for Life (discussed next). TRICARE Extra requires no enrollment and there is no enrollment fee. Under this option, bene�iciaries can see civilian providers and go to civilian health care organizations that are on an approved list of TRICARE providers called the TRICARE Provider Directory.
TRICARE Extra is essentially an option for TRICARE Standard bene�iciaries who want to save on out-of-pocket expenses by making an appointment with a TRICARE Prime network provider. TRICARE Extra requires the same deductible as TRICARE Standard; however, by using network providers, bene�iciaries reduce their cost-sharing by 5%. An advantage of TRICARE Extra is that the Extra option user can expect that the network provider will �ile all claims forms—similar to TRICARE Prime. An additional advantage is that the access to the authorized provider may be more geographically convenient to the Extra user. However, disadvantages include extra fees associated with deductibles and copayments, the loss of a PCM, some restrictions on specialty care access, and limited provider choice.
TRICARE for Life
Over the years, military recruiters marketed “free health care for life” to potential recruits, promising this bene�it for the recruit and certain family members if they served a certain amount of time in uniform.18 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en18) However, in 1956, Public Law 569 changed the century-old, quasi–health care for life entitlement to a bene�it. PL 569, Section 301, changed from: “Hospital space SHALL be made available” to “Hospital space MAY be made available [sic].”19 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en19) Despite the change in law, retirees and family members continued to receive bene�its well into the early 1990s. However, in the mid-1990s, under congressional and presidential guidance, these bene�iciaries were required to use a civilian health care provider, use a civilian organization, and rely on Medicare or other health insurance (OHI) as payers.20 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en20)
The Pentagon estimated that approximately 1.5 million personnel, approximately 20% of the bene�iciary base, were locked out of the military health system in the late 1990s.21 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en21) Based partially on the grassroots response to restricted access to health care options, TRICARE for Life (TFL) was signed into public law (PL 106-398) as part of the 2001 NDAA.
TFL effectively ful�ills the promise of lifetime health care made to older retirees for a career in uniform. TFL restores TRICARE coverage for all Medicare-eligible retired bene�iciaries regardless of age or place of residence who are enrolled in Medicare Parts A and B.22 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en22) Congress established TFL as a “fully funded entitlement program” by means of a new
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Medicare-Eligible Retiree Health Care Trust Fund.23 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en23) To qualify for TFL, a retiree must have served at least 20 years in the uniformed services (including retired members of the National Guard and the Reserves). There are no enrollment fees, premiums, or deductibles for TFL. Bene�iciaries receive most of their care from civilian providers and Medicare is the �irst payer, whereas TRICARE (or other health insurance) serves as the secondary payer. TFL makes TRICARE a secondary payer to Medicare at no cost to a retiree.
Another option available to eligible TFL bene�iciaries is TRICARE Plus. TRICARE Plus affords bene�iciaries the opportunity to receive primary care and specialty care at their local MTF, provided that facility has space available. There are no charges or fees for TRICARE Plus, if offered by the MTF. Another bene�it of TRICARE Plus is that bene�iciaries are entitled to the same primary care access standards as bene�iciaries in TRICARE Prime. For example, the bene�iciary would be assured of a primary care appointment within one week. However, TRICARE Plus is not available at all MTFs due to the availability of care. Also, the MTF commander may limit the program to only certain bene�iciary categories, again based on local staf�ing and other considerations.
Another limitation is that bene�iciaries already enrolled in TRICARE Prime, a purchased care HMO, or a Medicare HMO are not eligible. Basically, TRICARE for Life (bene�its received from civilian providers) and TRICARE Plus (care received at MTFs) give bene�iciaries more coverage while simultaneously allowing the military health system the ability to control costs and access due to local, medically related considerations. The enactment of TFL represents one of the many military managed care outcomes that can be traced to antecedent activist actions by constituents.
TRICARE Reserve Select
The NDAA of 2005 authorized a program called TRICARE Reserve Select (TRS). TRS is a premium-based health plan for eligible Reserve component members. TRS offers comprehensive health care coverage similar to TRICARE Standard and TRICARE Extra. TRS members and covered family members can access care by making an appointment with any TRICARE authorized provider, hospital, or pharmacy or TRICARE network or non-network. TRS members may access care at an MTF on a space-available basis only; however, pharmacy services are available from an MTF pharmacy, the TRICARE Mail Order Pharmacy, or TRICARE network and non-network retail pharmacies. Medical coverage (direct care at the MTF) is available when the member is activated. When ordered to active duty for more than 30 consecutive days, Reserve component members and their families have comprehensive health care coverage under TRICARE.24 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en24)
TRICARE Retired Reserve
TRICARE Retired Reserve (TRR) provides comprehensive coverage for a speci�ied group of bene�iciaries. Eligibility for this program is limited to retired Reserve individuals who are quali�ied for nonregular retirement and their families. Also, they must be under the age of 60 and not eligible for, or enrolled in, the Federal Employees Health Bene�its Program (FEHBP).25 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en25)
In addition, survivors of retired Reserve members may be quali�ied if they meet certain requirements: the Reserve member was covered by TRR at time of death; the survivors must be immediate family members and the spouse must not have remarried; and the coverage would begin before the Reserve member would have turned 60. However, eligibility for FEHBP is not necessary for the survivors.
TRR is a premium-based plan that offers TRICARE bene�its worldwide by TRICARE-authorized providers. Similar to other TRICARE programs, there are annual deductibles and copays. However, unlike some of the other TRICARE plans, the law does not provide any government subsidy, therefore, enrollees pay the full cost of the program. Nevertheless, the cost is less if the providers are in the TRICARE network.
Other advantages of the program include bene�iciaries being authorized to receive care in military hospitals on a space-available basis. Also, the bene�iciary may visit any TRICARE-authorized provider whether or not that provider is in the network. However, if the provider is in the network, the bene�iciary will pay less and the provider will �ile the claim on behalf of the bene�iciary. There is no referral, although some medical services may require preauthorization by TRICARE. Finally, continuity of care may be enhanced because there is no requirement for eligible Reserve personnel to change providers if they already have one. A description of all of the TRICARE program options is provided in Table 26-2 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26tab2) .
TABLE 26-2 TRICARE Program Descriptions
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Source: TRICARE Choices: At a Glance. Available at: www.tricare.mil/tricaresmart�iles/Prod_539/TRICARE_Choices_At_a_Glance_Br_10_LoRes.pdf (http://www.tricare.mil/tricaresmart�iles/Prod_539/TRICARE_Choices_At_a_Glance_Br_10_LoRes.pdf) . Accessed November 2, 2010.
TRICARE Pharmacy Program
The MHS provides comprehensive prescription drug coverage to all its bene�iciaries including active duty service members and their families, retirees and their families, and bene�iciaries who are over age 65. Also, this coverage is the same regardless of the TRICARE program in which the bene�iciary is enrolled. Pharmaceuticals may be obtained at MTFs or through the TRICARE Pharmacy program (TPharm), which includes home delivery, retail network pharmacies, and non-network pharmacies.
TPharm is a contractor-provided bene�it, which provides convenience and low cost to bene�iciaries. TPharm has the combined features of a home delivery (by mail order) service and a retail pharmacy. In addition to not requiring enrollment, there are several other advantages to bene�iciaries:
• A single call center and a help desk are available for convenience; • Prescriptions are easily transferred between pharmacies regardless of whether they are retail, military, or mail order; and • Although the prescription drug coverage is the same regardless of health plan, there are �inancial incentives for bene�iciaries to utilize
home delivery (mail order) rather than retail pharmacies.26 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en26)
TRICARE Dental Programs
The TRICARE Dental Program (TDP) is a voluntary dental insurance program that is available to eligible active duty family members, select reserve component personnel, Individual Ready Reserve (IRR) members, select retirees, and other eligible bene�iciaries. This premium- based program has annual costs and deductibles for both family members of active duty personnel as well as other classes of bene�iciaries.27 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en27) The plan covers ordinary dental procedures such as annual screenings, preventive care, and standard dental treatments.
Another dental program exists solely for active duty and activated Reserve and National Guard service members. This program, the Active Duty Dental Program (ADDP), is administered by a civilian contractor who provides care for service members who live and work more than 50 miles from a military dental clinic as well as service members in the U.S. Virgin Islands, Puerto Rico, as well as the Paci�ic islands of Guam,
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American Samoa, and the Northern Mariana Islands. Although there is no enrollment feature, treatment must be provided by the contractor’s network provider.
Other TRICARE Programs
Beyond the programs that have already been discussed, other TRICARE programs include TRICARE Overseas, transitional health care bene�its such as the Transitional Assistance Management Program and the Continued Healthcare Bene�it Program (CHCBP), and programs for special needs bene�iciaries.
TRICARE Overseas
Because there are over 500,000 TRICARE bene�iciaries living overseas, TRICARE contracts exist in three geographical regions: Latin America-Canada, Eurasia-Africa, and the Paci�ic. In these areas, MTFs provide primary care to bene�iciaries but the host nations provide specialty care. The contract vendors are responsible not only for ensuring care is provided to the bene�iciaries, but also for provider relations in the host nations and some medical evacuations. TRICARE Prime Overseas allows service members and their families who live overseas to get their health care under a TRICARE Prime–like option. Active duty service members must enroll in TRICARE Prime Overseas; however, family members can select between two options: TRICARE Overseas Prime and TRICARE Standard Overseas. TRICARE Standard Overseas also extends to military retirees and their families. TRICARE Extra is not available in overseas locations.
Transitional Assistance Management Program and the Continued Healthcare Bene�it Program
Individuals who lose TRICARE eligibility or other coverage under the military health system are eligible for two transitional health care options: the Transitional Assistance Management Program (TAMP) and the Continued Health-care Bene�it Program (CHCBP). TAMP provides 180 days of transitional health bene�its after leaving active duty with the option to enroll in TRICARE Prime or receive coverage under TRICARE Standard and TRICARE Extra. CHCBP is a premium-based health care program administered by a private contractor that provides temporary transitional health coverage (18–36 months) after TRICARE eligibility ends. CHCBP offers similar bene�its and operates under most of the rules of TRICARE Standard. To obtain this coverage, the member must enroll in CHCBP within 60 days after separation from active duty or loss of eligibility for military health care.28 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en28) , 29 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en29)
Extended Care Health Option
TRICARE offers three enhancements to the traditional TRICARE program for active duty family members with special needs: TRICARE Extended Care Health Option (ECHO), ECHO Home Health Care (EHHC), and EHHC Respite Care. ECHO delivers �inancial assistance and additional bene�its, including supplies and services, beyond those available from the basic bene�it in TRICARE Prime, Standard, or Extra. The bene�it increased from $1,000 (through the Program for Persons with Disabilities) to $2,500 per eligible family member in �iscal year 2004 under ECHO. Additionally, bene�iciaries who are homebound may qualify for extended in-home health care through ECHO.
ECHO Home Health Care provides medically necessary skilled services to eligible homebound bene�iciaries who generally require more than 28–35 hours per week of home health services or respite care. This bene�it helps eligible bene�iciaries stay home rather than having to go to an institutional/acute-care facility or skilled nursing home. Similarly, the EHHC Respite Bene�it provides temporary relief or a rest period for the primary caregiver to promote well-being for both the caregiver and the homebound bene�iciary. This bene�it offers 8 hours of respite care per day up to 5 days per calendar week.30 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en30)
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26.3 MONITORING MHS PERFORMANCE
Like all managed health care plans, the performance of the MHS is continually monitored, often using the same metrics and measures used by commercial payers. But the MHS is not exactly the same as all other managed health care plans, so it must monitor performance in some unique ways.
The MHS Quadruple Aim
In 2009, MHS leaders recognized that the MHS strategic plan was consistent with the concept of the Triple Aim proposed by the Institute for Healthcare Improvement (IHI). The Triple Aim describes the results that can be achieved when all the elements of a health care system work together to serve the needs of a population. Because the MHS is a system dedicated to the health of the military family, it was appropriate to adopt the Triple Aim as its strategic vision with the addition of one key element: readiness. Readiness re�lects the core mission of the MHS and its reason for being. Figure 26-2 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i312#ch26�ig2) shows the MHS Quadruple Aim.
The MHS Quadruple Aim is comprised of the following elements:
• Readiness—ensuring that the total military force is medically ready to deploy and that the medical force is ready to deliver health care anytime, anywhere in support of the full range of military operations, including humanitarian missions.
FIGURE 26-2 The MHS Quadruple Aim Source: 2011 MHS Stakeholders’ Report, www.health.mil/About_MHS/StakeholdersReport.aspx (http://www.health.mil/About_MHS/StakeholdersReport.aspx) . Accessed March 2, 2011.
• Population Health—improving the health of a population by encouraging healthy behaviors and reducing the likelihood of illness through focused prevention and the development of increased resilience. • Experience of Care—providing a care experience that is patient and family centered, compassionate, convenient, equitable, safe, and of
high quality. • Per Capita Cost—creating value by focusing on quality, eliminating waste, and reducing unwarranted variation and considering the
total cost of care over time, not just the cost of an individual health care activity.
The MHS monitors a number of metrics to assess its strategic performance. When appropriate, the MHS uses existing measures found in the civilian sector in order to benchmark its performance. Some examples of these measures include those taken from the Healthcare Effectiveness Data and Information Set (HEDIS®), the Consumer Assessment of Health Plans Study (CAHPS®), and the Overall Hospital Quality Index (ORYX®). Emphasis on speci�ic metrics changes as the needs of the population change.* (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26fn2)
Performance Metrics for TRICARE Contractors
TRICARE contractors are charged with providing or arranging for delivery of high-quality, timely health care services and accurate, timely processing of claims received into their custody, whether for network or non-network care. In addition, the contractor must provide courteous, accurate, and timely response to inquiries from bene�iciaries, providers, the TMA, and other legitimately interested parties. TMA has established standards of performance that are monitored by TMA and other government agencies to measure contractor performance. Key performance standards include such measures as preauthorizations/authorizations, referrals, and claims processing timeliness requirements.31 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en31)
Outcomes of the TRICARE Program
Initial results of the TRICARE reengineering initiative, combined with other improvements within the military health system, suggest that cost containment and quality improvement were achieved through (at least) 2004.32 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en32) However, from 2001 through 2010, expenses associated with military health care rose 167%, resulting in an increase of costs from $19
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billion to $51 billion in the same period of time. This increase represents over 10% of the defense budget. Projected costs are estimated to reach $65 billion by 2015. To compound issues, TRICARE fees have not increased since 1995. The result has been a less cost-ef�icient military health system.33 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en33) , 34 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en34)
However, quality indicators suggest that military hospitals have higher Joint Commission scores than civilian organizations. Additionally, military report cards suggest that military hospitals have a higher percentage of board-certi�ied doctors, administrators, and allied health personnel than civilian hospitals.
Bene�iciaries who are enrolled in the purchased care plan are generally more satis�ied than those enrolled in the direct care plan. Issues being addressed include aligning incentives for both bene�iciaries and providers, enhancing continuity of care, and maintaining access standards in both military health care facilities and the civilian network.35 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en35) , 36 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en36)
Although there is mixed research and opinion on whether military health care is more or less cost effective per quality outcomes than civilian health care, Congress, the DOD, TMA, and the bene�iciary base largely consider TRICARE a success. As a result, in an effort to maintain satisfaction with key stakeholders, the military health system is continually developing process improvement initiatives and incorporating progressive management practices to maintain optimal cost, quality, and access. Such examples in recent years have included the adoption of both a balanced scorecard and lean six sigma initiatives.
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26.4 CURRENT AND FUTURE CHALLENGES
Many of the current and future challenges for the MHS parallel those in the commercial sector, but some are unique.
Continually Rising Costs
Like health care bene�its in the commercial sector, and in Medicare and Medicaid, the biggest threat to the military health plan is its cost. Between �iscal year 2007 and 2010 alone, costs increased almost 10%. About half of this increase was in the purchased care part of TRICARE, meaning private sector providers. Major causes of this increase were the retail pharmacy network, the TFL bene�it, and an increased number of bene�iciaries. In response, the pharmacy bene�it has been restructured to encourage home delivery. However, there are limited options to reduce the cost of TFL. Similarly, it can be expected that there will be more bene�iciaries as the population’s life span increases and more National Guard and Reserve bene�iciaries enroll.
In 1995, bene�iciaries paid approximately 27% of their health care costs; however, in 2010, bene�iciaries paid only 12% of their own health care costs. The result is a more generous military medical bene�it to bene�iciaries. Unfortunately, in an effort to control health care costs in the civilian market, many employers of military bene�iciaries (including state agencies) have encouraged them to forgo participating in the employee health plan in lieu of extra wages and income. The new employer avoids an increase in the company’s bene�its costs, but only because the burden of providing medical care to the military bene�iciary base remains with TRICARE.
In addition to bene�it enhancements, increased use by an increased number of bene�iciaries and no increases in cost-sharing have resulted in the MHS experiencing the same health care in�lation as all health plans in the nation. The MHS implemented a number of management initiatives designed to reduce the costs of delivery and to enhance performance within its health system. For example, an Out-patient Prospective Payment System has been implemented. This seeks to leverage the Medicare program by aligning hospitals’ outpatient payment rates with the rates approved by Medicare. Similarly, tighter management controls have been implemented to constrain per member per month costs as well as emergency department utilization.
Having the enormous responsibility and accountability to be a good steward of taxpayers’ dollars often makes the MHS a keen concern of Congress. Because the health care industry is the largest service industry in the United States, and health care costs have historically shown a trend of rapid increase, it is little wonder that health care expenditures are a signi�icant issue in terms of the annual military budget and a potential threat to the TRICARE program.
The Next Generation of Tricare Contracts
The military health system is continually adapting the structure of its health care delivery system to meet DOD requirements. The current contracts were awarded in 2010 for a maximum of 5 years. Soon after these contracts were awarded, the DOD began an initiative to assess the requirements for the next generation of TRICARE contracts. To determine the scope of the contracts, this initiative assessed national security, health care, and the economic climate as well as such factors as various health care delivery and �inance models, scope of coverage, leveraging best practices and knowledge management, and individual choice and �inancial implications. Throughout the assessment, key considerations were maintaining the military’s readiness, strengthening continuity of care, and focusing on health vis-à-vis health care.37 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en37)
Caring for Wounded Warriors
In addition to providing health care through the direct care and purchased care TRICARE program, the MHS remains focused on optimizing the health and quality of life of wounded service members and their families. To accomplish this, MHS centers of excellence (CoE) have been established for research and treatment. These CoEs are addressing how to treat the most serious injuries including psychological health and traumatic brain injury, amputations, neuroscience and regenerative medicine, and vision.38 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en38)
Representative of the comprehensive approach to research and treatment is the Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury (DCOE). This center is the focal point for a number of interdisciplinary resources to assist the families in understanding and coping with the injuries of their service members. In addition to providing information on the nature of psychological and traumatic brain injuries, this assistance includes providing state-of-the-art advice regarding issues including preventing suicide, helping children whose mother/father has deployed or just returned, adjusting to changes, taking care of family members, and understanding the stress of service members who are transitioning in their careers (e.g., relocating or returning to civilian life). DCOE also provides a free, 24/7 outreach center, which consists of experts who provide information by telephone, e-mail, or online chat.
Since the beginning of hostilities in Iraq, the MHS has treated substantial numbers of severely wounded, ill, and injured (WII) service members. However, subsequent to the 2007 media coverage regarding the quality and effectiveness of care, management, and support systems for the WII, a number of additional initiatives were implemented. Also, the National Defense Authorization Act of 2008 required the Secretaries of Defense and Veterans Affairs to develop policies regarding the WII’s care, management, and transition into the civilian community.
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Within the Department of Defense, there are several organizational elements to accomplish these goals. The Of�ice of Wounded Warrior Care and Transition Policy (WWCTP) was established in November 2008 and was charged with providing oversight, establishing policy, and collaborating with other agencies to ensure that WII service members receive quality health care while in a patient status and, when appropriate, the necessary support during their transition to either civilian life or return to active duty.
The of�ice has a number of responsibilities, including providing recovery care coordinators, administering the Disability Evaluation System (DES), and maintaining the National Resource Directory as well as the Transition Assistance Program. The DES initiative is administered in coordination with the Department of Veterans Affairs. The intent is to ensure that the WII service member is provided only one medical examination that will ensure a faster, more equitable, and more transparent disability determination.
The Recovery Coordination Program consists of recovery care coordinators who work with the military departments’ recovery care teams to ensure that all nonmedical needs of WII service members are met in a timely and comprehensive manner. The Transition Assistance Program is responsible to ensure that WII service members are connected with a comprehensive range of services and resources. These include counseling and brie�ings in such areas as bene�its, transition to civilian life, post-military employment and career changes, and resources for WII service members with disabilities. The National Resource Directory is a robust website that offers information pertaining to important topics such as bene�its and compensation, employment, family and caregiver support, health care, housing and transportation, and education and training.39 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en39)
In support of the WWCTP and the military services, the MHS provides health care as well as coordination and transition services for its WII service members through the services’ wounded warrior programs. The core attribute of these programs is the comprehensive and personalized health care and nonmedical case management of each WII service member and his or her family.
The largest program is the Army’s Wounded Warrior Program (AW2), with the mission to assist and advocate for its severely wounded, ill, and injured soldiers, veterans, and their families for as long as it takes. It provides individualized services to this population by means of a designated advocate whose responsibility is to provide personal assistance. Although this advocate is a nonmedical manager, he or she is also responsible to ensure that appropriate health care is received as indicated. The second largest program is the Marine Corps Wounded Warrior Regiment. Similar in mission to the AW2, the Wounded Warrior Regiment “provides and facilitates assistance to wounded, ill, and injured Marines, Sailors attached to or in support of Marine units, and their family members in order to assist them as they return to duty or transition to civilian life.”40 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en40)
Although supporting a substantially smaller WII population, the Navy’s Safe Harbor and the Air Force Wounded Warrior programs also provide individualized and enhanced assistance to their service members and families during and after active duty.
The features of AW2 are representative of the other services’ programs, although there may be differences in some operational aspects due to service philosophy, numbers of WII service members, or other service-speci�ic considerations. As noted above, AW2’s key feature is individualized support provided to WII service members, who are de�ined as those Army soldiers who are expected to require at least 6 months of rehabilitation as well as complex medical management. Each soldier is assigned a non-medical case manager who is called an AW2 Advocate. This Advocate is located in an area as close as possible to the soldier. Typically, the Advocate is located where there are large concentrations of WII service members, including military installations, VA facilities and polytrauma centers, and urban areas. The Advocate is required to personally maintain contact with the soldier and assist him or her for the long term, hence the AW2’s philosophy of “for as long as it takes.” The Advocate’s assignment is not limited by the soldier’s recovery or rehabilitation time and, if the soldier moves, another local Advocate will be assigned.41 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en41)
Balancing Stakeholder Priorities
The most signi�icant struggle the military managed care system has grappled with from the inception of TRICARE to the present is the careful balance between elements of the Coppola’s Managed Care Quaternion (MCQ)42 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en42) –44 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en44) and Kissick’s Iron Triangle.45 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en45)
When juxtaposed together, the two models create a new decision-making paradigm Coppola coined, “The Parity of Health Care,”46 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en46) as shown in Figure 26-2 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i312#ch26�ig2) . Coppola developed the Parity of Health Care concept and model to assist in explaining to military health care leaders why consensus on any single aspect of health care is dif�icult. The model has gained popular support within governmental organizations, as well as some state Medicaid agencies, as an aid to health planning and policymaking. It has also been used to forecast future health care needs in many civilian organizations and entities as well.47 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en47)
Managed Care Quaternion
The term Managed Care Quaternion was coined in the Army-Baylor Graduate Program in Health and Business Administration in 2003. The Army-Baylor Program has been responsible for training and educating the next generation of military health care executives since 1953. The Quaternion has been used for several years to help explain the complex interactions among employers, patients, providers, and payers in regard to partisan and competing views about health care.
Understanding the careful balance between stakeholders in military health care policy and strategy formulation is critically important. This reality becomes more important as leaders rise in positions of increased responsibility, from running health care organizations to directing
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policy for entire health systems. Key stakeholders in the military are similar to any civilian health care entity, and are comprised of military and civilian individuals, groups, and associations. While the numbers of stakeholders in health organizations can be numerous, there are four main types of stakeholders to consider in any health care decision making: patients, payers, providers, and employers.
The Iron Triangle
The concept of the Iron Triangle was developed by Kissick in the early 1990s during the managed care revolution in America. Kissick coined the term Iron Triangle to demonstrate the dif�iculty in selecting priorities for health as they relate to health care costs, quality, and access.* (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26fn3) Kissick suggested that an understanding of these resource elements would assist managed care organizations in setting logistical priorities. Kissick’s model is a vital tool to health leaders; however, the model itself fails to take into account outside actors and agents. In this regard it is incomplete by itself for dynamic organizational analysis.
Parity of Health Care
The Parity of Health Care model juxtaposes the Managed Care Quaternion and the Iron Triangle models together in a manner that allows military and civilian leaders to strategically plan and forecast the impact of new policy decisions that may affect the organization, such as patient care, payment arrangements, external costs, outside stake-holder satisfaction, program ef�iciency and effectiveness, quality, and other policies affecting organization survivability. Patients, payers, employers, and providers all play a vital role in the operations of any health organization. With any one of the four major stakeholders of the Managed Care Quaternion omitted in the decision-making process for a health care entity, failure at some level is sure to occur. For example, a military primary care clinic without extended and weekend of�ice hours may be regarded as low quality to the patient because of the inconvenience factor; however, the same clinic may be regarded as high quality to the DOD (i.e., the payers) because of the cost ef�iciency of the clinic. However, if patients continue to perceive lack of extended and weekend of�ice hours as low quality, dissatisfaction with the overall clinic may result regardless of the quality of provided care. As a result, health professionals must be cognizant of the constant struggle between stakeholders to maintain high satisfaction with all elements of the Managed Care Quaternion.
As seen from in Figure 26-3 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i313#ch26�ig3) and Figure 26-4 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i313#ch26�ig4) , even a slight variation in the prioritization of Iron Triangle options results in myriad interrelated and intrarelated competing priorities that can be hard for even the stakeholders to resolve themselves, let alone in tandem with other stakeholders along the continuum of care.
Sword of Damocles
In continuing to understand the dif�icult nature of the relationships between the Iron Triangle and the Managed Care Quaternion, we offer a metaphor from classical literature called the Sword of Damocles. In Greek mythology, the Sword of Damocles represents “ever-present peril.” It is also used as a metaphor to suggest a “frailty in existing relationships.” For example, in the Parity of Health Care, the Sword of Damocles represents an inability of any one stakeholder to reach sustained consensus for priorities of cost, quality, and access.
With health priorities constantly changing due to environmental demands, it is no wonder why agreements on health policy are dif�icult to reach. However, an understanding of the Parity of Health Care can be helpful to health leaders for strategically forecasting threats to relationships amid stakeholders, while also balancing priorities among those stakeholders. If anything is apparent, continuous external and internal assessment and evaluation and relationship building among stakeholders are critical to leadership success.
FIGURE 26-3 Parity of Health Care
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FIGURE 26-4 Parity of Health Care Competing Priorities and Possible Combinations
As a result, both military and civilian health planners must be cognizant that solutions developed to solve health problems in the current environment may not be valid solutions to tomorrow’s new issues. As environmental demands continue to place pressures on the relationships within the Parity of Health Care, health leaders must renegotiate priorities. Health planners and leaders should be aware of this fact and view change as a new opportunity for success and not simply problems of the dynamic environment. Always consider the Sword of Damocles represents the frailty of established relationships among stakeholders, and that constant maintenance and attention is required. An understanding of the Parity of Health Care can be helpful in the military health system for strategically forecasting threats to relationships amid actors—and also balancing priorities among actors.
A Different Health Care Environment
The military health system operates in a unique cost environment. MTFs operate in a typical government �iscal bureaucracy. Under this paradigm, health care dollars are allocated to the MTF at the beginning of the �iscal year on October 1. The hospital commander (similar to a civilian hospital CEO) is then encouraged to spend all the allocated monies prior to September 30 of the following year. Typically, hospital commanders attempt to exhaust all allocated dollars by the end of August—and then request more year-end funds. Under this federal bureaucracy and paradigm, military health leaders have little incentive to conserve resources, seek synergies, or save money. All money not used by September 30 of the �iscal year is lost. Ironically, then, commanders and health leaders failing to spend all their allocated dollars may be considered poor �inancial managers under this paradigm. However, a signi�icant advantage of this philosophy is that MTFs are able to consider aspects of quality and access over costs in some cases.
Until September 11, 2001 (9/11), this placed the military health system in a unique situation where it was able to focus attention and resources on matters of self-interest �irst rather than key stakeholder and actor priorities. Since 9/11 and the Global War on Terror, priorities have changed.
Congress closely monitors military health care budgets and major health care expenditures. Although MTFs still operate on a 12-month exhaustible account, MTFs’ budgets are closely reviewed for super�luous spending. Additionally, under revised �inancing initiatives, MTFs are moving toward a value-based �inancing system whereby facilities are paid based on the quantity and quality of services delivered rather than traditional budget allocations.48 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i314#ch26en48) Additionally, as the retiree and bene�iciary population continues to increase, non–active duty bene�iciaries have found they have a voice in Congress and the power to in�luence military health policy. The passing of the TRICARE for Life and the TRICARE Reserve Select options are only two of the examples of stake-holder in�luence on the modern military health system.
Finally, the local MTF commander now �inds him- or herself in competition with the local TRICARE network. Because certain classi�ications of bene�iciaries have a choice of enrolling in TRICARE Prime (care at the local military treatment facility) or choosing TRICARE Extra or Standard (care rendered through the civilian network), for every one patient that elects not to enroll (or disenroll) in TRICARE Prime, the local MTF commander loses money. As a result, contrary to the friendly relationship that existed between the TRICARE contractor and the local MTF in the 1990s, both the TRICARE contractor and the military hospital are competing more and more for the same health care dollars that are associated with every one DOD bene�iciary.
As a result, if the military health system is to continue to survive, military health leaders must understand the parity of health care. Furthermore, the military health system must, in essence, discontinue thinking “military” and adopt best practices and processes used by civilian peers. Military health leaders must consider aspects of the Managed Care Quaternion when formulating policy. Additionally, federal health care leaders must consider the consequences of cost, quality, and access to care actors. Failing to consider the complex relationships associated with the parity of health care will affect the ef�iciency, effectiveness, and survival of military health care in the future.
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CONCLUSION
The MHS operates the oldest form of organized health care delivery in the United States. Originally founded in 1775, the military health system has more than 235 years of experience in the effective operation and delivery of military medicine and management. The success of the military health system is caused in part by its ability to adapt to changes in the internal and external environments to maintain effectiveness.
Developing initially as colloquial health programs designed to treat speci�ic categories of bene�iciaries and active duty service personnel, the military medical system eventually developed comprehensive direct care and purchased care systems. The purchased care system, called CHAMPUS, provided health care to a large standing military throughout the Cold War era. However, in response to changes in the health care environment, the military developed and implemented TRICARE. TRICARE is the DOD’s managed care model that delivers health care to approximately 10 million bene�iciaries worldwide.
Although it struggled through its initial growing pains during the late 1990s, the TRICARE program has become a viable model of success. Signi�icant advantages of TRICARE include high-quality care and the lowest out-of-pocket costs as compared to civilian managed care models. Threats include costs associated with implementing TRICARE, providing care to an aging retiree population, and the additional mission of providing care to select Reserve members. Additional threats include a loss of stakeholder satisfaction and the stretching of scarce military health assets and dollars. Finally, the military health system is grappling to achieve equi�inality with Coppola’s Parity of Health Care. However, if past success predicts future behavior, the military health system will continue to be a relevant and ready health care entity for the rest of the century.
ACKNOWLEDGMENTS
The authors wish to thank Army-Baylor University Graduate Program in Health and Business Administration (Joint MBA/MHA program) classes of 2005 and 2006 and Army-Baylor students Eric McClung, Joseph Edger, and Joe Phillips for contributions to the chapter version used in the �ifth edition of this book, which is still valuable. Our thanks are also extended to Lieutenant Colonel (Ret) Dawn Erckenbrack, PhD, as an author and contributor to the �ifth edition’s chapter. We kindly appreciate the contributions of Captain Cheryl Anne Borden from the United States Public Health Service, and Michael Dinneen, MD, PhD, from the Of�ice of the Assistant Secretary of Defense (Health Affairs) for their assistance as subject-matter experts in verifying the content of this chapter. Finally, a small portion of this chapter detailing issues with the CHAMPUS Reform Initiative was adapted from Boyer and Sobel’s chapter, “CHAMPUS and the Department of Defense Managed Care Programs.” In: Kongstvedt PR, ed. The Managed Health Care Handbook. 3rd ed. (Gaithersburg, MD: Aspen Publishers; 1996), which is now out of print.
DISCLOSURE
The opinions or assertions contained herein are those of the authors and do not necessarily re�lect the view of the Department of Defense.
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2011 MHS Conference; January 24, 2011; National Harbor, MD. 2 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i309#ch26-en2) Joint Chiefs of Staff. Policy Memorandum of Policy
No. 172. Pentagon, Washington, DC; 1983. 3 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i309#ch26-en3) Bailey S. Keynote address. Presented at: TRICARE
Conference; 1999; Washington, DC. 4 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en4) Holcolm RC. A Century With the Naval Hospital in
Portsmouth. Portsmouth, VA: Printcraft Publishing Company; 1930, p. 543. Cited by: Garrigues RM. The Serendipitous History of Discovery and Development Surrounding the Hospital Point Area and Its Naval Hospital in Portsmouth. Available at: www- nmcp.mar.med.navy.mil/aboutus/nmcphist/nmcphist.asp (http://www-nmcp.mar.med.navy.mil/aboutus/nmcphist/nmcphist.asp) . Accessed December 10, 2010.
5 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en5) Coppola MN. Correlates of military medical treatment facility (MTF) performance: Measuring technical ef�iciency with the structural adaptation to regain �it (SARFIT) model and data envelopment analysis (DEA). Doctoral dissertation; Medical College of Virginia Campus, Virginia Commonwealth University, Richmond, VA; August 2003.
6 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en6) Gillett MC. The Army Medical Department 1775– 1818. Washington, DC: Government Printing Of�ice; 1981.
7 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en7) Ibid. 8 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en8) Military Healthcare Reclamation Group. Detailed
history of healthcare issues. White Paper. Military Grass Roots Group Priorities 2003/4 (Tab E); 2002. Available at: http://rebel.212.net/mhcrg/tabe.htm (http://rebel.212.net/mhcrg/tabe.htm) . Accessed February 15, 2004.
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9 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en9) Burrelli DF. Report for Congress on military healthcare: The issue of “promised” bene�its. 2002. Congressional Research Service Publication No. 98–1006F; Washington, DC: Library of Congress.
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12 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en12) Boyer JF, Sobel LS. CHAMPUS and the Department of Defense managed care programs. In: Kongstvedt PR, ed. The Managed Health Care Handbook. 3rd ed. Gaithersburg, MD: Aspen; 1996. [Editor’s note: This book is out of print.]
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14 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en14) RAND National Defense Research Institute. Evaluation of the CHAMPUS Reform Initiative. Vols. 3 and 6. Santa Monica, CA: RAND National Defense Research Institute; 1993 and 1994. R-4244/3-HA and R-4244/6-HA.
15 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en15) Op cit: Boyer JF and Sobel LS. 16 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i310#ch26-en16) Mientka M. TRICARE for Life in need of
supplemental. US Medicine. 2021 L Street, #400, Washington, DC. April 2001. Available at: www.google.de/search? hl=de&q=%22TRICARE+for+Life+in+need+of+ supplemental%22&btnG=Google-Suche&meta (http://www.google.de/search? hl=de&q=%22TRICARE+for+Life+in+need+of+supplemental%22&btnG=Google-Suche&meta) . Accessed February 22, 2004.
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19 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en19) Public Law 569, The Dependants Medical Care Act (37 USC, Chapter 7 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i79#ch07) ); 1956.
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21 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en21) Op cit.: Coppola MN, Hudak R, Gidwani P. 22 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en22) National Defense Authorization Act of 2001. 23 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en23) US Medicine Institute. TRICARE for Life—
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24 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en24) Op Cit: TRICARE Management Activity Policy Memo.
25 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en25) Army Reserve Non-regular Retirement Information Guide. Compiled by United States Army Reserve Command and Retirement Services, USAR LNO, February 12, 2009. Available at: www.armyg1.army.mil/rso/docs/ARReserveRetirementGuide.doc (http://www.armyg1.army.mil/rso/docs/ARReserveRetirementGuide.doc) . Accessed January 5, 2011.
26 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en26) TRICARE Operations Manual 6010.56-M, February 1, 2008; Chapter 23 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i276#ch23) , Section 1, TRICARE Pharmacy (TPharm), TRICARE Management Activity; Washington, DC.
27 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en27) Op cit.: TRICARE Management Activity Policy Memo.
28 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en28) Op cit.: TRICARE Management Activity Policy Memo, and TRICARE Operations Manual.
29 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i311#ch26-en29) TRICARE Operations Manual 6010.56-M, February 1, 2008; Chapter 23 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i276#ch23) , Section 1, TRICARE Pharmacy (TPharm), TRICARE Management Activity; Washington, DC.
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32 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i312#ch26-en32) Op Cit: TRICARE Management Agency Policy Memo.
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46 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i313#ch26-en46) Op cit.: Coppola MN, Harrison J, Kerr B, Erckenbrack D.
47 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i313#ch26-en47) Op cit.: Ledlow J, Coppola MN; and Coppola MN, Erckenbrack D, Ledlow GR.
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* (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i309#ch26-fn1) The Navy is also responsible for providing medical care to the Marine Corps.
* (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i312#ch26-fn2) HEDIS is maintained by the National Committee on Quality Assurance (NCQA), and CAHPS is maintained by the federal Agency for Healthcare Research and Quality (AHRQ); both are addressed in Chapter 15 (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i199#ch15) . ORYX is maintained by The Joint Commission and is not within the scope of this book.
* (http://content.thuzelearning.com/books/Kongstvedt.2332.17.1/sections/i313#ch26-fn3) A variation of this was used by the consulting �irm Ernst & Young, LLP around the same time: cost, access to all providers, and high level of bene�its coverage.
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