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GAO-17-791R 1 (2017-09-29)

handle is hein.gao/gaobaaley0001 and id is 1 raw text is: G A O U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 September 29, 2017 The Honorable John McCain Chairman The Honorable Jack Reed Ranking Member Committee on Armed Services United States Senate The Honorable Mac Thornberry Chairman The Honorable Adam Smith Ranking Member Committee on Armed Services House of Representatives Defense Health Reform: Steps Taken to Plan the Transfer of the Administration of the Military Treatment Facilities to the Defense Health Agency, but Work Remains to Finalize the Plan The Department of Defense's (DOD) Military Health System (MHS) provides health care to more than 9 million beneficiaries, including service members, retirees, and their family members, through the direct and purchased care systems. Military treatment facilities (MTFs) are part of the direct care system.1 In September 2013, DOD established the Defense Health Agency (DHA) to assume management responsibility for numerous functions of the MHS, among other things.2 DHA also exercises authority, direction, and control over the MTFs in the National Capital Region-the Walter Reed National Military Medical Center, the Fort Belvoir 1The direct care system, which represents health care facilities and medical support organizations owned by DOD and managed by the Services' respective Surgeons General, includes military hospitals, ambulatory care clinics, and dental clinics (i.e., MTFs), among other facilities. Through regional contracts, TRICARE administers the purchased care system, which comprises a civilian network of hospitals and providers. 2As part of our continuing assessment of opportunities to reduce duplication and achieve cost savings across the federal government, we recommended in 2012, prior to the creation of the DHA, that DOD (1) develop an overall monitoring process across its portfolio of health care initiatives for overseeing progress and identifying accountable officials, and (2) fully implement management dashboards and detailed implementation plans for its health care initiatives. DOD implemented the first recommendation but, as of March 2017, had not yet fully implemented the second. Specifically, DOD has not fully developed performance metrics and cost estimates for each of the initiatives. See 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12=342SP (Washington, D.C.: Feb 28, 2012) and Defense Health Care: Applying Key Management Practices Should Help Achieve Efficiencies within the Military Health System, GAO-1 2-224 (Washington, D.C.: Apr 12, 2012). Further, we have issued multiple reports on defense health care reform specific to DHA. For example, in fiscal year 2014 we recommended that-in order to provide decision makers with more complete information on the planned implementation, management, and oversight of DOD's newly created DHA- DOD should monitor implementation costs to assess whether the shared services projects are on track to achieve projected net cost savings. DOD concurred with this recommendation and has taken steps to implement some of the changes; as a result, we have identified financial savings. See Defense Health Care Reform: Additional Implementation Details Would Increase Transparency of DOD's Plans and Enhance Accountability, GAO-1 4-49 (Washington D.C.: Nov 6, 2013). GAO-1 7-791 R Defense Health Reform Page 1

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