1

2

IntroductionMilitary health care management is in trouble�and

the trouble is not with the quality of the care but with costand accessibility for all beneficiaries of the militaryhealth care system.

General Henry H. Shelton, USA, Chairman of the JointChiefs of Staff, stated in his testimony to the Senate ArmedServices Committee in February 2000, �While servicemem-bers and their families are normally very pleased with thecare that they receive once they enter into the system . . .they are very frustrated with TRICARE as a system. It isquite frankly immensely complex, administrativelyconfusing and not very customer friendly. Our service-members and their families deserve better.� Concerningretirees, General Shelton stated, �I think that the first thingwe need to do is make sure that we acknowledge ourcommitment to the retirees for their years of service, andfor what we basically committed to at the time they wererecruited into the armed forces.�

Contents

Introduction ........................ 2

The Promise ........................ 5

The Reality .......................... 8

What Is Needed ................. 11

What Must Be Done .......... 17

Torchbearer Message........ 19

Source: Department of the Army

3

The general also told the members of thecommittee that the Department of Defense(DoD) has recruiting posters that vividlystate that not only would the servicesprovide medical care upon retirement, �butthat families would be taken care of. In their[retirees�] minds, we have broken thatcommitment. And I think we have.�

Military health care�an important andcomplex issue in itself�is also part of amuch larger issue: health care in general.Spending on health care in the United Statesrose 5.6 percent in 1998, according to anannual report by the Health Care FinancingAdministration. This increase�both bygovernment and in the private sector�wasthe largest since an 8.7 percent jump in1993. Health care spending averaged $4,094

per person�the nation spent $1.1 trillion.The report said spending on prescriptiondrugs grew more in the United States thanin any other country, climbing by 15.4 percent to$90.6 billion. Costs for military health careand pharmaceuticals are also rising�butnot as quickly.

Americans, in and out of uniform, areinterested in health care. America�s soldiersexpect that our nation will provide healthcare for them and their families. Highoperating tempo within all components ofthe Army during the past decade hasheightened soldiers� awareness of criticalmedical needs for their families and hashighlighted inequities among health careoptions for active and reserve componentpersonnel, retirees and family members.

Source: Department of the Army

4

The dramatic loss of military health careproviders and hospital/clinics (approxi-mately 40 percent reduction since the endof the Cold War) without a parallel drop inthe number of patients has constrained theability of the military health care system toprovide uninhibited access to its qualitycare. At the same time, the number ofretirees in the military community isgrowing. This, coupled with years ofunderfunded defense budgets that includehealth care, has created serious concernsamong beneficiaries that the medicalbenefit may be deteriorating. What oncewas largely free now comes at a cost.

Concern over health care benefits hasaffected recruiting and retention. The lossof trained servicemembers increases annualdefense costs. In sum, underfunded health

Source: Army Reserve

Source: Army National Guard

5

care budgets�viewed by some as apparent�savings��actually result in greater overallcost to DoD. This also frustrates the effortsof military medical professionals to providequality care efficiently and effectively toeach beneficiary they treat.

Here�s the dilemma for military healthcare professionals: We require the militarymedical corps primarily to support thewartime mission. Yet because the activeduty soldier is a relatively healthyindividual, military medical professionalsmust look elsewhere to remain proficient intheir skills. In the past, doctors enhancedtheir knowledge and skills by practicing attop-flight military teaching hospitals. Butthese have been eliminated or severelyreduced. Funding the Defense HealthProgram (DHP) therefore facilitatesrecapturing workload into military hospitalsand clinics and allows military doctors tosee additional categories of patients(retirees, for example) who are beneficialfor military health care professionals inmaintaining currency and retaining a highlevel of medical proficiency.

The Promise Soldiering in peace or war is dangerous

business. Historically, responsible nationshave always considered it their obligation tocare for their sick and wounded warriors.Responsible nations also understand thatcare and support for families are matters ofgreat concern to soldiers. If properlyprovided and administered, this allowssoldiers to concentrate on the duties andresponsibilities of defending the nation. OurArmy understands that it has the importantmission of maintaining the health of the

Army. That includes serving soldiers andtheir families, and also those who haveserved and their families, as well as thesurvivors of soldiers who have lost theirlives in the service of their country. Theseare the beneficiaries of the military medicalsystem: active duty soldiers of all threecomponents (active Army and activatedArmy National Guard and Army Reserve),drilling Army National Guard and ArmyReserve soldiers injured in the line of duty,retirees and families.

In support of these beneficiaries, theArmy Medical Department (of whichreserve components make up 70 percent)has developed a corps of quality health careproviders. All Army hospitals are accreditedby the Joint Commission on Accreditationof Healthcare Organizations. Average scoresfor the past six years for Army hospitalscontinue to exceed the national average.More than 90 percent of all Army physi-cians who have completed their residencytraining have passed examinations to beboard-certified. This is a higher rate than incivilian health systems. More Army dentalofficers are board-certified than in thecivilian sector. The quality of the military

6

medical professional is not at issue. It is aquality force. This report recognizes thatmanaging medical care in wartime is a keyaspect of military health care overall;however, the report focuses primarily onmanaging the peacetime care of alleligible military beneficiaries throughTRICARE. It will also address health careoptions for Medicare eligible beneficiaries.

History

The United States Army was over 100years old when medical care for militaryfamilies was recognized in law. The ArmyAppropriations Act of 1884 for the firsttime provided authorization for thetreatment of family members, with thefollowing caveat:

�Medical officers of the Army andContract Surgeons shall wheneverpracticable attend the families of theofficers and soldiers free of charge.�(Emphasis added.)

That act formally recognized a practicethat had actually existed for years at remoteposts throughout the West.

As our Army grew in the 20th century, sodid the number of family members requiringhealth care. To help meet these burgeoningrequirements, Congress responded with theDependents Medical Care Act of 1956. Thisact authorized selected inpatient medicaltreatment at civilian hospitals, on a cost-sharing basis, for the spouses and childrenof active duty military personnel. It alsoprovided direct care entitlement prioritiesand inpatient charges for family membersand retired enlisted personnel. Entitlementto outpatient care under this program waslimited to treatment of accidental injury andprenatal and postpartum care.

During the Cold War, military medicalrequirements for a war in Europe wereknown to be great. Consequently, DoDmaintained a large infrastructure of medicalpersonnel and facilities. What were thesedoctors to do until the war came? From themilitary point of view, providing health careto servicemembers, and to families andretirees, was simply a matter of maintainingmilitary readiness; providing care foreligible family members and retirees on aspace-available basis also enabled medicalpersonnel to maintain their professionalskills.

Medical care for soldiers and theirfamilies, as well as for retirees and theirfamilies, was generally available in Armyhospitals and clinics during the Cold War.Priority of care in military medical facilitieswent to the soldier on active duty. Next wasto the soldier�s family, on a space-availablebasis. Retirees and their families were alsoauthorized care on a space-available�butlower-priority�basis. Recognizing that caremight not always be accessible or available,

7

Congress changed health care in thearmed forces in 1966 (and in 1967 forretirees). A number of obvious short-comings of the 1956 act, together with thepassage of Medicare legislation in 1965,resulted in amendments that:

¨ created the Civilian Health and MedicalProgram of the Uniformed Services(CHAMPUS)�the use of civilian doctorsto treat active duty families and retireesand their families�for uniformed servicespersonnel under age 65;

¨ provided authority for retired members toreceive care at Veterans Administrationfacilities for nonservice-connectedconditions;

¨ included spouses and children of activeand retired members, retired membersthemselves, and spouses and children ofmembers who died in retired status.

In limiting CHAMPUS to those youngerthan age 65, the House Armed ServicesCommittee reasoned, �[M]ilitary retireeswould continue to have two medicalprograms upon reaching age 65�the use ofthe military medical facilities on a space-available basis and the Social SecurityMedicare program.� CHAMPUS provideda safety net of some degree of care by thecivilian medical system. A significant majormilitary operation or war would necessarilyrequire that servicemembers receive priorityfor military medical care. Unless DoD tookother actions, families and retirees wouldhave to rely exclusively on CHAMPUS.

Ironically, the first real test of this war-time scenario was Operation Desert Shield/Desert Storm. Whether in recognition of thecommitment made to family members and

retirees or because of the enormous expenseand impact on the CHAMPUS system, DoDdecided not to rely on CHAMPUS whenmilitary doctors went to Desert Storm.Instead, DoD called reserve componentdoctors to active duty, in many cases not toserve with their reserve units but to backfillat the active duty military treatmentfacilities.

In 1988, the CHAMPUS ReformInitiative (the most direct forerunner ofTRICARE) was established; it introducedthe concept of managed care�health carefor all beneficiaries within defined budgetlimitations�into the military system. Thedemonstration program was centered inCalifornia and Hawaii. Lessons from thispopular initiative�such as cutting thepaperwork burden placed on beneficiaries�were incorporated in later programs.

The CHAMPUS Reform Initiativeimproved access for active duty familymembers and many retirees and theirfamilies; however, its cost to the govern-ment was about 19 percent higher than

8

traditional CHAMPUS. In part, the reasonfor the higher costs came through thesurfacing of a �ghost population� ofbeneficiaries who had stopped using themilitary health care system for a variety ofreasons. DoD discovered that most of these�ghost� beneficiaries left more costly healthcare plans offered by their employers totake advantage of the savings to individualsand families under the CHAMPUS ReformInitiative. When DoD proposed expandingthe reform initiative during the early 1990s,Congress refused because the cost to thegovernment was rising faster in thatprogram than in any other CHAMPUSprogram.

In the Defense Authorization Act ofFiscal Year 1994, Congress required a newhealth plan with options for militarybeneficiaries that improved access but didnot cost the government more than existingCHAMPUS. Its intent was a �uniformbenefit� for all beneficiaries. Thatauthorization bill led to the TRICAREsystem.

The RealityTRICARE is a population-based

managed health care plan.

Key features of TRICARE are:

¨ triservice coordination to provide for thetotality of health needs for DoDbeneficiaries within 40 miles of militaryhospitals and clinics;

¨ coordination of care by DoD lead agentsfor 13 geographic DoD health care regionsunder the control of the Office of theAssistant Secretary of Defense for HealthAffairs;

¨ a choice of three health care plans foractive duty and CHAMPUS-eligible (i.e.,families of active duty and non-Medicare-eligible) beneficiaries:

1. a primary care-based, managed careplan�TRICARE Prime, the centeraround which the other plansoperate�patterned after healthmaintenance organizations (HMOs);

2. a preferred provider health care plan�TRICARE Extra�that purchasesdiscounted care in the civiliannetwork;

3. a standard fee-for-service health careinsurance plan�TRICAREStandard�much like the oldCHAMPUS plan.

¨ health care not provided by militaryhospitals and clinics to be delivered bya local network of civilian health careproviders (i.e., doctors, psychologists,nurse practitioners, physicians� assistants,etc.) and hospitals subcontracted by largeprivate health care companies.

9

¨ uniform access, waiting time and qualitystandards for all military hospitals andclinics and civilian hospitals in TRICARE,irrespective of site, military service orprivate contractor.

As Dr. Sue Bailey, Assistant Secretaryof Defense for Health Affairs, stated in hertestimony before Congress in 1999, �TheMilitary Health Care System is a vast andextraordinary health system. There is noother like it in the world. We ensure thehealth of our forces, care for them when illor injured anywhere around the globe, andwe provide comprehensive health coverageto the families of our servicemembers, ourretirees, and their families, and the survivingfamily members of those who have died inservice to their country.�

If you were a young noncommissionedofficer (NCO) with a family at Fort Bragg,North Carolina in 1975, here is what youmight have encountered that would haveshaped your expectations: a �direct care�system (i.e., on-post military health carefacilities and care by uniformed personnelfor most of your health needs); and cost-freeaccess for yourself and family members.

If you were retired after 20 years ofservice in 1995 and are now (year 2000)living in Fayetteville, North Carolina, here�swhat you encounter today: a �managingcare� system, as the U.S. Army SurgeonGeneral refers to it, consisting of acombination of military hospitals andclinics and network civilian health careproviders, providing quality care for retireesand family members under 65 (assumingaccess) at some cost, followed by theMedicare system once the servicemember/family member reaches age 65. (If Fort

Bragg was a TRICARE Senior Primedemonstration site, then the soldier and hisspouse would be eligible for TRICARE atage 65 and over.)

In 1999, DoD forwarded to Congress areport outlining reserve component healthcare issues and recommending Congressbring the reserve components in line withthe active component regarding health carebenefits. In sum, the criterion is that healthcare benefits should be based on perfor-mance of duty rather than length of duty.

* Data based on Defense manpower statistics** (1) Data not maintained

(2) HQDA policy until April 1971- Pregnant enlisted females were

involuntarily separated- Enlisted females who married

could apply for discharge- All sole parents given option to apply for hardship discharge

Army Family Demographics

Source:Department of the Army

10

How is military health care doing?

TRICARE has 8.2 million beneficiariesacross 13 DoD regions. Implementation hastaken four years from the first to the lastcontracts, and while challenges withtimeliness (of claims and payments) andportability (moving from one area toanother) have occurred repeatedly, everyregion to date has reportedly seen improve-ments within the first 6 to 12 months. Thevast majority of TRICARE Prime enrolleeselect to remain enrolled after the first year.At present, TRICARE Prime is the onlyHMO-like alternative from which bene-ficiaries may choose.

TRICARE Prime facilitates a mostimportant feature of military care ingeneral: health promotion and disease andinjury prevention. Military health careleaders and providers are directing attentionand resources toward preventing avoidableillness and injury, thereby easing thedemand for services. It is an importantfeature of force health protection ondeployments, and an important means tocorrectly apply limited resources to those ingreatest need.

The TRICARE Management Agency hasconducted hospital-by-hospital and clinic-by-clinic surveys of patients using theMilitary Health Care System and publishedthese monthly for use by hospitals/clinicsand senior commanders. Patient satisfactionis among the most important performancemeasures in use. They are consistently nearor above satisfaction with benchmark HMOdata. Yet there remains dissatisfactionamong beneficiaries.

In the Spring 1999 Sample Survey ofMilitary Personnel, the Army PersonnelSurvey Office found that officers said theywere only 40.1 percent satisfied with theavailability of family medical care and only37.8 percent satisfied with the availabilityof family dental care. Enlisted personnelsaid they were 66.8 percent satisfied withaccess to and cost of dental care for familymembers.

In the January 2000 Center for Strategicand International Studies (CSIS) report on�American Military Culture in the 21st

Century,� CSIS found that junior-gradeofficers and enlisted personnel believe thereare major concerns about the adequacy offamily medical care. The report recom-mends that Congress and DoD providecompensation at necessary levels to ensuresuitable medical care for families.

The Chief of Staff, U.S. Army (CSA)Retiree Council, in its 39th annual meetingin April 1999, reported that restoration ofpromised health care for all military bene-ficiaries continues to be the greatest issueaffecting the welfare of the 675,000 Armyretirees. In its report to the CSA, the councilwrote, �Given that TRICARE is the linch-pin of the Military Health System, the CSA

11

Retiree Council is especially disappointedat the slow, incremental pace in implement-ing improvements requisite to makingTRICARE an accessible, quality, and valuedhealth care program for all military benefi-ciaries.� Location, age and status determineto a large extent what the medical benefit is.Lieutenant General Ellis D. Parker, USARetired,the council�s cochairman, stated,�Whatever unrest and anxiety are existingout in the retiree community�most of itconcerns medical care.�

What Is NeededWhat our armed forces need is military

health care which, from the law thatenacts it to the system that supports it,provides a uniform benefit and enables thebeneficiary access to quality health carewith minimal or no cost.

If TRICARE is:

1) an umbrella program providing a uniformbenefit for all beneficiaries and encom-passing the capabilities of the services,CHAMPUS, and �civilian contractorpreferred provider� networks;

2) funded through the Defense HealthProgram (DHP);

and responds to a congressional mandate forDoD to develop a health care deliverysystem that uses managed care conceptswhile maintaining readiness, containingcosts, and improving access to health care,then access, quality of service to thebeneficiary, and cost are three criteria toassess whether it is meeting the needs ofbeneficiaries.

Access

Access consists of eligibility and avail-ability. TRICARE offers most beneficiariesthree options�HMO (TRICARE Prime);Preferred Provider (TRICARE Extra); orstandard CHAMPUS (TRICARE Standard).However, not all beneficiaries are eligible tochoose from the options, creating a seriousinequity.

Active duty soldiers and their familymembers are enrolled in TRICARE Prime atno cost. Retirees and their family membersunder the age of 65 choose among the threeoptions based on their needs and/or desires,each entailing some degree of cost. How-ever, once a beneficiary becomes eligiblefor Medicare (usually at age 65), thatperson is no longer eligible for TRICARE.

To improve access for beneficiaries age65 and over, the Defense Department hasseveral candidate programs. DoD is testinga plan that enrolls Medicare-eligible bene-ficiaries in the Federal Employees HealthBenefits Program (FEHBP).

12

FEHBP would recognize the DefenseDepartment�s commitment as an employerand provide health care to retirees 65 yearsof age and older and their families. FEHBPoffers hundreds of health plans, including achoice of �fee-for-service� plans and lessexpensive prepaid plans, some featuringhigh- and low-coverage options. Many arenational plans. FEHBP has no preexistingcondition penalties, allows participants toswitch plans, and requires the federalgovernment to subsidize 72 percent of thepremium. The beneficiary pays a monthlypremium. FEHBP is available to all othergovernment employees.

Another DoD candidate plan will offer,at two test sites, the opportunity for retireesage 65 and older to purchase TRICARE as a

supplement to Medicare coverage. In mostcases, it would cover what Medicare doesnot pay and provide broad prescription drugcoverage with normal TRICARE copay-ments. DoD envisions that the TRICAREsupplemental coverage will have a premiumof $576 per person per year�significantlylower than the commercial supplements orFEHBP.

In a third plan, DoD is testing theTRICARE Senior Prime program (alsoknown as Medicare Subvention) permittingMedicare-eligible beneficiaries to enroll inTRICARE Prime. Pending legislation wouldmake the program permanent on a phasedbasis, expanding first to ten additional sitesand then to remaining areas after FiscalYear 2002.

�Big Five� Civilian Medicare vs. Uniformed Services Coverage

Source: Department of Defense

13

1 Under FEHBP, BC/BS standard would cost $1,470 for a family and Kaiser $1,380 for a family.2 There is a lifetime limit of 60 reserve days.3 The annual Medicare deductible is $100, whether care is inpatient, outpatient, or both.4 Providers who do not accept Medicare assignment may charge no more than 115% of Medicare�s allowable charge. Some FEHBP planscover up to the entire 115%. Others cover up to 100% of the charge, and the patient pays the balance. Coverage varies by plan andprocedure.5 Supplemental coverage not needed to cover costs; however, it may be desired to avoid preexisting condition limitations if individualdrops Tricare Prime coverage. Source: The Retired Officers Association

HMO Plans Fee for Service Plans

14

Assuming eligibility, availability of themedical care itself (e.g., appointmentsystem, referrals, etc.) varies from region toregion, state to state, post to post, and insome cases (for recruiters, Reserve OfficerTraining Corps instructors at remote loca-tions, and families of activated reservecomponent soldiers) may not be available atall. Eligible beneficiaries have difficultyconnecting with TRICARE when awayfrom their home region due to lack ofportability among regions. A TRICAREPrime beneficiary must obtain a preauthor-ization for routine (nonemergency) medicalcare in another region. While in the homeregion, if using a civilian health careprovider, the beneficiary must obtain priorauthorization for preventive services suchas obstetrical-gynecological (OB-GYN)exams, mammograms for women over age 35,and urological exams for men over age 60.

We must make these services barrier-freeand cease placing additional burdens onbeneficiaries.

As a partial solution, in October 1999DoD initiated TRICARE Prime Remote toprovide primary medical care to active dutymembers who live in the United States butfar from military hospitals and clinics.Unfortunately, at this time, only familymembers of active duty personnel inselected regions are eligible for TRICAREPrime Remote. Most families of ROTCinstructors, students, recruiters, ActiveGuard and Reserve (AGR) soldiers andothers living more than 50 miles from amilitary hospital or clinic are denied aTRICARE Prime benefit that is afforded tofamily members of other active dutypersonnel. This inequity must be remedied.

Quality of Service to the Beneficiary

As stated earlier, quality of health careprovided by military medical personnel isnot at issue. Certain aspects of �qualitycare��in either the form of a benefit or theadministration of a benefit�do concernbeneficiaries. Two examples are pharmacybenefits and claims processing.

Through a combination of increasedhealth care costs, the dramatic increase innew pharmaceuticals, the closing of militarytreatment facilities and hospitals and ofVeterans Administration (VA) hospitals, anda sharp rise in the number of retired militarypersonnel, the pharmacy benefit system is inhigh demand, according to RepresentativeJim Ryun (R-KS) (AUSA News, �Voice ofCongress: Military health care�s importance,�October 1999).

15

Prescription drug costs are expected tocontinue to rise at the rate of 15�20 percentper year over the next five years. DoD spentapproximately $1.3 billion in FY 1999 onpharmaceuticals, of which the majority�$900 million�was spent in military hospital/clinic pharmacies. DoD increases inspending on prescription drugs parallelthose of the civilian sector; however,funding levels have not kept pace with theneed for expanded drug formularies andimproved access to drugs for militarybeneficiaries.

The over-65 population is the highestuser of drugs with multiple prescriptions.Newsweek, in its cover story �HMO Hell�(November 8, 1999), documents thatapproximately 84 percent of Americansconsider affordable and readily accessibleprescription drugs the most important partof their overall health care coverage. Thistrend is no different for the military Medicare-eligible retiree who rates access to and costof pharmaceuticals as the largest singlequality issue, as reported to Congress by theGeneral Accounting Office. Congress hasdirected that DoD completely redesign itspharmacy benefit to implement an integratedpharmacy information system that willmove existing legacy systems into onecommon database. This database wouldimprove DoD�s ability to better managepatients� medications, prevent dangerousdrug interactions and reduce overall cost.

In the future, innovative improvementsto the pharmacy benefit within DoD includethe concept of telepharmacy and the �ATM-like� automated remote dispensingtechnologies that will improve beneficiaryaccess to pharmaceuticals. Off-the-shelf

technologies such as bar-coding and roboticswill further prevent and reduce medicationerrors and improve operational efficiencies.Pharmaceuticals will continue to have acritical role in health care for the future dueto a progressively aging population, revolu-tionary new drugs, increased consumerawareness and the growing reliance on drugs asthe primary means of treating and preventingdisease. What is needed is an appropriatelyfunded, expanded pharmacy benefit for allbeneficiaries (soldiers, retirees and familymembers). It is imperative that the DefenseDepartment incorporate into policy the bestbusiness practices of private industry torevamp the pharmacy system and expandthe pharmacy benefit program to include allDoD Medicare-eligible beneficiaries.

Delays in processing TRICARE claimshave frustrated beneficiaries and providersalike. As a result, late TRICARE paymentsjeopardize the credit ratings of soldiers,retirees and families, forcing them to facecollection agencies because of late pay-ments not within their control. Likewise,many private health care providers leaveTRICARE, or refuse to join TRICAREnetworks at all, due to administrative delays

16

and late or nonexistent payments. Electronicprocessing may be one business processimprovement on which to capitalize. Morethan 90 percent of Medicare�s claims areprocessed electronically. Electronic claimsprocessing has the potential to providefaster reimbursements to providers and toreduce cost. DoD�s intent is to adoptcommercial business practices whereverpossible.

Cost

There are two aspects regarding cost:the defense budget and beneficiary cost.

Military health costs are running inexcess of $16 billion annually. Accordingto DoD�s Future Years Defense Program(7 February 2000), the DoD health carebudget is underfunded by approximately$6.1 billion over the next five years. Forexample, as part of the $291 billion defensebudget request for FY 2001, DoD hasrequested $80 million to improve healthcare benefits for family members in remotelocations and eliminate copayments for off-base treatment. Another $348 million isrequested to cover faster-than-expected costincreases in various areas, including in-house

Department of Defense Budgetas a Percentage of GDP

(1940-2005)

Sources:� National Defense Budget Estimates for FY 1999� The Economic and Budget Outlook: An Update, Congressional Budget Office, Aug 1998� POM 200-2005 FYDP (includes DoD plus-up)

17

pharmacies, support contract costs, and anew Medicaid �custodial care� benefit thatrequires DoD to be the first payer for Medicaid.This, unfortunately, does not cover the initia-tives that are in development to overcomeaccess and quality-of-service issues. To makethese initiatives possible, DoD must receivea greater share of the federal budget. Thecurrent 2.8 percent of gross domestic pro-duct (GDP) is simply not enough; somethingapproaching 3.5 to 4.0 percent is required.This increase would begin the process ofending the constant battle between quality oflife/well-being issues and equipment needs.

TRICARE also requires some form ofpayment from most beneficiaries. TRICAREPrime is free only to active duty soldiersand active duty family members who usemilitary hospitals and clinics. Active dutyfamily members using civilian medicalfacilities, retirees and their family memberspay copayments, deductibles and/or enroll-ment fees (as well as optional supplementalinsurance premiums and deductibles)depending on the choice of TRICARE plan.Per-visit copayments in particular are budget-busters for many military families. Also,military families see it as an equality issue.Family members sent to civilian providersunder TRICARE Prime have copayments,while those treated at military hospitals andclinics do not.

The DoD dental plan requires active dutyfamily members to pay a monthly premiumand copayments to receive care. Retireesand their family members pay premiumsand copayments for a basic dental plan thatdoes not cover most of the procedures neededby an aging population. Dental plans forArmy National Guard and Army Reservepersonnel do not include family members.

What Must Be DoneThe Association of the United States Army

(AUSA) is committed to achieving unrestrictedaccess to quality health care for everycategory of military beneficiary, establish-ment of a top-quality pharmacy benefit, andcreation of a �user-friendly� Military HealthCare System that is customer-oriented andexists to serve soldiers, retirees and familymembers.

Congress and the Department ofDefense must force improvement to thehealth care system, fund the program theycreated, and increase accessibility forthose to whom health care was promised.

AUSA strongly recommends thatCongress and DoD:

¨ provide adequate funding to ensure qualityhealth care for all beneficiaries andpreclude the imposition of user fees.Specifically, fully fund the DefenseHealth Program (DHP).

(The human and material infrastructure ofthe direct care system must be restored.

18

For example, military doctors nowattempt to handle the same workload astheir civilian counterparts with an averageof one support staff per provider comparedwith an industry standard of three supportstaff per civilian doctor, guaranteeinginefficient care and doctor burnout. Lackof support staff is the greatest concerncited by departing military physicians astheir reason for leaving. Chronic under-funding of the DHP also makes it difficultto sustain high-quality care in poorlymaintained facilities with outdatedequipment.)

For active duty soldiers and their familymembers, enact legislation and fundTRICARE Prime Remote in the continentalUnited States to approximately $30 millionper year (require changes to NationalDefense Authorization Act). EliminateTRICARE Prime copayments for activeduty family members receiving care inthe civilian network ($35 million�$50 million per year).

¨ Implement business practice improvementsin the Military Health Care System tomake it effective and efficient. Pharmacydesign and claims processing are twoareas requiring immediate fixes. Fund anexpanded pharmacy benefit for all bene-ficiaries. Establish a universal enrollmentmechanism that can be rapidly accessed atany time for verification of eligibility/enrollment, no matter where the beneficiaryis located.

¨ Expand and fund currently authorizeddemonstration programs for MedicareSubvention (TRICARE Senior Prime),FEHBP-65, and mail-order and retailpharmacy programs nationwide, do theanalysis, select the best, and make thempermanent.

¨ Expand the DoD Retiree Dental Programto cover procedures required by an agingpopulation.

¨ Fix inequities between reserve componentand active component health care.

Finally, Congress and DoD must lookbeyond TRICARE to transform militaryhealth care and explore broader and moreresponsive approaches to delivering thehealth benefit. Health promotion anddisease and injury prevention are keys tothe future of health care. They currentlyare an important feature of force healthprotection on deployments and reduce thedemand for services of peacetime care byavoiding illness and injury. This alsoenables many more patients with chronicdisease and injury to be served, especiallyamong the elderly retired population.

19

Torchbearer Message

Quality of life and well-being, especially health care, have a direct bearingon the readiness of the force and on the ability to attract and keep quality youngmen and women to serve this great nation. Soldiers, sailors, airmen and marinescontinue to list concerns about health care for their families as an issue thatweighs heavily on their decision to stay in or leave military service.

Today�s active duty members are tomorrow�s retirees. Retirees� number-oneconcern remains health care. The lack of full medical care, whether implied oractually promised, leaves manyretirees with the impression thatthey have been abandoned intheir time of need. This, in turn,impacts on recruiting and retention,since retirees are among the bestambassadors in local communities.Young people and their parentslook to retired soldiers for infor-mation and counseling concerningmilitary service.

The military health system,TRICARE, has quality profes-sionals, dedicated to providingquality care to each beneficiarythey see. The system must beaccessible and properly funded,and it must provide a uniformbenefit.

Accessible, cost-effective, efficient, quality health carefor servicemembers from all components (active Army, Army National

Guard and Army Reserve), retirees of all ages, and their families isNONNEGOTIABLE.

Remember�broken healthcare promises to one

generation take a toll on thecareer decisions of the next.

20