Tuesday, April 21, 2009

Gates: DoD health system harmed by frozen fees, old hospitals

Gates: DoD health system harmed by frozen fees, old hospitals

By Tom Philpott
April 21, 2009
Defense Secretary Robert Gates' prescription for what ails military health care includes replacing aging hospitals and raising TRICARE fees for working-age retirees, which Congress has kept frozen since 1995.

"Health care is eating the (Defense) department alive," Gates told officers attending the Air War College at Maxwell-Gunter Air Force Base in Montgomery, Ala., after a Wednesday speech there on the budget.

The defense chief is visiting each service war college to take questions on plans for "rebalancing" defense spending, starting with the fiscal 2010 budget request to be sent to Congress soon. Goals are to take care of warriors and their families, enhance U.S. capabilities to fight wars, and reform weapons procurement, acquisition and contracting.

One question came from a lieutenant colonel in the Louisiana Air National Guard, who complained active-duty health services were "worse" than those given "Medicaid recipients." He told Gates, "TRICARE does not even require professional-board certification for its physicians."

The officer asked Gates what initiatives might be in the works to make "uniformed health care providers" the "norm" again or at least to raise standards for TRICARE providers that would be deemed acceptable for civilian government employees.

Gates conceded that reports he received on TRICARE seemed to run in "parallel universes." In one, department health officials present him survey data showing "how well TRICARE is doing and how popular it is and how well it compares with private HMOs. ... And I leave the room feeling gratified."

Then he gets a "very different story from every soldier, sailor, Marine and airman that I talk to" and from military spouses, Gates said. Common complaints range from delays in getting appointments to routine bureaucratic hassles to difficulties getting referred to medical specialists.

Meanwhile, Gates said, the department will spend $47 billion on health care in 2010, costs that are "eating the department alive."

The economic stimulus package passed in February includes money for new hospitals at Fort Hood, Texas, and Camp Pendleton, Calif. "But I also want the services to try and find the money ... to upgrade the hospitals at other posts," Gates said, because more "world-class hospitals" on base will relieve pressure on the TRICARE network of civilian physicians.

It also might persuade more retirees "to come back on post or base" for quality care, he said.

Many retirees likely would tell the secretary that they've been denied access to base care and forced to use TRICARE.

"Another part of the problem," Gates said, "is we cannot get any relief from the Congress, in terms of increasing either (TRICARE) co-pays or the premiums. TRICARE is now about a dozen years old. There has not been a single premium increase allowed since the program was founded. What medical plan in the nation has not had a single increase in the premium or co-pays in the last dozen years?"

Gates said the department didn't seek fee increases for active-duty members or their families — or retiree beneficiaries old enough for Medicare.

Targeted, he said, are fees for younger retirees, "mostly working another job. And employers will influence them to stay on TRICARE because it saves the employer money."

But the department also has learned a lesson, Gates said. For 2010, the defense health budget will not assume again $1.2 billion in savings from Congress approving TRICARE fee increases. Bush administration budgets did so the past three years to force Congress either to approve higher fees or to find ways to fill the financial hole. Those tactics only made lawmakers angry.

Congressional staffers on key committees are divided on whether the Obama 2010 budget request will call for any TRICARE fee increases. With wars being fought on two fronts, some argue that the politics of such a move remain unacceptable.

Even some retiree associations have said they wouldn't protest some fee increases — as long as they didn't exceed the annual percentage increase in retiree cost-of-living adjustments and that Defense officials first exhausted all other reasonable ways of curbing health care costs.

"Our main objection," a senior congressional staffer said, "is that the department hasn't done any thoughtful analysis of what fees should be. They've just gone with that massive 10 years worth of inflation adjustment" to bring relative out-of-pocket costs for retirees back to 1995 levels quickly.

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