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New Defense Health Agency opens for business

Oct. 1, 2013 - 05:51PM   |  
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With no fanfare, the Pentagon marked a major milestone in reorganizing the military health system on Tuesday, formally establishing the Defense Health Agency and dissolving the Tricare Management Activity.

In the largest restructuring of the military health system since World War II, the Defense Health Agency assumes responsibility for many of the common health services that support operational forces, such as Tricare health programs, pharmacy benefits, information technology, facilities planning, education and research.

The new management organization is expected to save the Defense Department money by eliminating duplicative services and streamlining business operations, Pentagon officials say.

But just how much savings will be realized is unclear. Assistant Secretary of Defense for Health Affairs Dr. Jonathan Woodson has estimated the change will conserve at least $50 million a year, and according to Pentagon estimates furnished to Congress in June, the initial phase could save between $1.5 billion to $2.9 billion over the next six years.

But as part of the transition process, the number of full-time employees in Woodon’s office increased to 128 from 43, according to data supplied by Association of the United States Navy. The nonpartisan Government Accountability Office has said that DoD’s cost analysis for potential savings was “limited and based on some potentially flawed assumptions,” including issues with estimating personnel costs and savings.

Congress ordered DoD last year to provide a full accounting of anticipated cost savings by Sept. 30; DoD has supplied some data but missed the final deadline.

The standup Tuesday of the new joint agency was to be marked by a ceremony at the organization’s Falls Church, Va., headquarters, an event that would have included closeting the Tricare Management Activity flag. But the event was postponed by the government shutdown, Tricare officials said.

Still, the active-duty personnel and contractors unaffected by the shutdown moved ahead with the business of the new agency, which includes providing support for the military medical commands, overseeing the Tricare program and managing “multi-service market areas” in six areas of the country that have high concentrations of military medical facilities.

Military treatment facility users in the market areas of Washington, D.C., Tidewater, Va., Puget Sound, Wash., Colorado Springs. Colo., Oahu, Hawaii, and San Antonio are likely to see consolidation of services and shared clinical staff among each area’s military treatment facilities, an effort designed to maximize use of military medical medical facilities.

According to some reports, some military treatment facilities are underutilized between 27 percent and 75 percent. One of Woodson’s goals is to increase use of military treatment facilities, which cost less than private care under Tricare.

Air Force Lt. Gen. Douglas Robb will serve as the Defense Health Agency’s first director. He was promoted Friday to assume his new duties, which include not only serving as director, but as advisor to the assistant secretary of defense for health affairs and adviser to the undersecretary of defense for personnel and readiness on military health issues.

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