Reforming defense healthcare

The secretary of Defense has sounded the alarm about rising healthcare costs across the Department of Defense. The expected reflex has been to raise the cost of insurance to the beneficiaries. That will help some, but only marginally. The military healthcare system — TRICARE — can only achieve savings and effectiveness with fundamental reform.

The military suffers from rising healthcare costs and problems much like the rest of the nation. Improvement and reform must go beyond fixing the financing of care across the insurance programs. Twenty years ago, a small group of us proposed an alternative to the plan that still prevails today. We were unsuccessful and flying in the face of strong winds supporting for-profit health insurance companies. Nonetheless, we conducted pilot programs — Gateway to Care — that showed that we could provide managed healthcare services more effectively and efficiently as physician leaders. We argued that shifting more treatment and provision of care to private insurers would significantly increase the administrative costs and would not achieve the goals that we desired. Our data unequivocally supported our argument. Nonetheless, the effort was fruitless, as political decisions had already been made. At one point, a respected congressman visited the hospital I was commanding to challenge our proposition. After a full day’s visit, he agreed that we had a better program, but had decided to support the insurers no matter what the facts showed.

{mosads}The principles of the programs were simple. We organized our hospitals and clinics on (1) providing value to our customers — fellow soldiers, retirees and families; (2) functionally and organizationally integrating all levels of services; and (3) using the latest information systems to have the best visibility and exchange of relevant clinical, financial and administrative information. We developed and operated a functionally integrated healthcare system that is uncommon even today.

Many factors enabled us to accomplish our goals. In a nutshell, we were able to do our jobs better because our organization centralized command and control, enabled creativity and flexibility, and demanded accountability. As a hospital commander, I was clearly responsible for delivering all necessary healthcare to the entire military’s eligible population in my region. I knew who they were, could figure what they needed, and was committed to giving it to them. I was accountable to the military leadership and the concerned voices of the people whom I served. My staff had the ability to build teams and coordinate programs according to the needs of the patients, and not worry about others making a profit from their services. I could inspire and motivate them with “service to the nation,” and not just making their lifestyle more comfortable. If we needed to contract for services to supplement military providers, then we could write those contracts as we needed them.

In contrast, military healthcare currently suffers from split responsibilities between military providers, the services, and insurance carriers; obstacles in sharing data between the provider groups; and complicated financial arrangements. It is cumbersome, complicated and directly contributes to the exorbitant increases in cost.

I can hear the objections to my assertions — that pulling out anecdotal data from 20 years ago is wild and far-fetched. And certainly no one wants to bear my hubris that “we told you so.” But, if the buzz about providing value in healthcare and having accountable organizations has any credibility, then we showed that it could be done in military communities with integrated services back then. I have heard senior government leaders defend themselves as “fast followers,” not willing to step out front. That attitude can’t cut it today in a universe of huge deficits, uncontrolled healthcare costs, and too many disenfranchised citizens. It is time for “mission first” — better health and health services for our military, retirees and their families.

Xenakis is a child and adolescent psychiatrist, and founder of a nonprofit conducting research on brain-related diseases.