Health agency online in October

A new Defense Health Agency (DHA) comes to life this month, armed with new authorities to control health costs by cutting waste and duplication across the separate medical departments of Army, Navy and Air Force.

DHA is tasked to streamline delivery of care, recapture thousands of patients for the direct care system from purchased care contractors, combine common support functions and standardize health care business practices.

Its power and effectiveness will evolve over time, said Dr. Jonathan Woodson, assistant secretary of defense for health affairs, in a phone interview to explain how this first major restructuring of the military health care system in decades will impact its 9.7 million beneficiaries.

One impact will be greater access to military facilities, particularly in areas where beneficiaries are most concentrated.

Usage of base hospitals has dropped to about 33 percent of capacity, a trend aggravated by years of war when medical staffs routinely deployed to care for wounded in theater.

Meanwhile, many more beneficiaries came to rely on TRICARE networks of civilian providers or on private sector doctors who would accept patients using TRICARE Standard, the fee-for-service option.

Under DHA, the goal is to increase base hospital usage to reach at least 70 percent of capacity, Woodson said, because care in the military system costs about a third less than TRICARE purchased care.

Woodson stressed that the goal is to “optimize dollars invested into the direct care system.”

It is not to deny beneficiaries access to care “when they need it from the purchased care market.”

Perhaps the greater potential for cost-savings under DHA will be its control of 10 “shared services” of military health care.

It will start with five.

It also will control medical facilities planning, medical logistics and health information technology.

Ultimately it also will assume responsibility from the services for: medical education and training; research and development; acquisition and contracting; budgeting and resourcing; public health.

“In the future, we will build our hospitals and clinics using the same analytics,” said DHA’s first director, Air Force Lt. Gen. (Dr.) Douglas J. Robb.

“We’ll buy supplies, equipment and services from common contracts. We’ll train in even more common ways. Army, Navy and Air Force personnel will be able to work in any medical facility in the world without needing to learn a whole new way of doing business.”

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: