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New Defense Health Agency taking shape

Initial phase of consolidation could save billions

Jul. 9, 2013 - 01:26PM   |  
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The clock is ticking on the Tricare Management Activity, the Joint Task Force National Capital Region Medical Command and other military health offices slated for aggregation into the new Defense Health Agency.

Starting Oct. 1, the Defense Health Agency will oversee about half of the common health services used by the military medical commands, such as Tricare and pharmacy benefits, health information technology, medical logistics and facilities planning.

It will assume responsibility for an additional five “shared services” — public health, medical acquisition, budget and resource management, medical education and training, and medical research and development — by Oct. 1, 2015.

“This is the biggest structural organizational change in the military health system’s history. We want to be more relevant, stronger, in the future, and that’s what we aim to do,” acting Tricare Deputy Director Allen Middleton told the Defense Health Board June 27.

The initial phase could save the government $1.5 billion to $2.9 billion over the next six years, according to Pentagon estimates provided to Congress on June 27.

Management activities made up just $312 million of the roughly $50 billion military health budget in 2011. But the Defense Department hopes that by restructuring the administrative services, it will drive change throughout the military health system, particularly in Tricare’s private-sector and direct-care costs, which total nearly $25 billion a year, Middleton said.

The Defense Health Agency will be led by a three-star general or flag officer and consist of six directorates:

■A two-star health care operations directorate responsible for public health, pharmacy, Tricare and warrior care.

■A one-star research and development directorate.

■An information and technology directorate overseen by a civilian senior executive service officer.

■A one-star education and training directorate.

■A business support directorate also led by a senior executive service officer.

■The two-star National Capital Region Directorate, responsible for the Walter Reed National Military Medical Center, Fort Belvoir Community Hospital and the Joint Pathology Center.

The DHA also will function as a combat support agency, reporting to the chairman of the Joint Chiefs to ensure it meets combatant commanders’ needs.

The services will retain their own medical commands, each led by their respective surgeon general.

In a letter to be published in the July/August Armed Forces Journal, Assistant Secretary of Defense for Health Affairs Dr. Jonathan Woodson said preserving each service’s medical commands is important for delivering health care to service members on land, at sea and in the air.

“We should not throw the baby out with the bath water,” he said of previous proposals to fully merge the services’ medical functions. “The Army, Navy and Air Force each have unique contributions. Under our plan, what is good about the unique service traditions is preserved while we deliver on the promise of a more efficient military health care system.”

In October 2012, the Government Accountability Office criticized the Pentagon’s cost and savings estimates for the agency, saying DoD lacked a complete business analysis and implementation plan and charging that its estimates on personnel savings were based on “potentially flawed assumptions.”

DoD has since developed detailed business projections and savings estimates. Air Force Lt. Gen. Douglas Robb will serve as the agency’s first director.

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