defense icon, source: [West Covina, California] Progressive Management, 2008

Defense: Military Health Care Costs

To help achieve significant projected cost savings and other performance goals, the Department of Defense needs to complete, implement, and monitor detailed plans for each of its approved health care initiatives.

Action:

To enhance its efforts to manage rising health care costs and demonstrate sustained leadership commitment for achieving the performance goals of the Military Health System's strategic initiatives, the Department of Defense (DOD) should complete and fully implement the dashboards and detailed implementation plans for each of the approved health care initiatives in a manner consistent with results-oriented management practices, such as the inclusion of upfront investment costs and cost savings estimates.

This action was revised in GAO's April 2012 report, Defense Health Care: Applying Key Management Practices Should Help Achieve Efficiencies within the Military Health System. (GAO-12-224). Specifically, in this report, GAO recommended that the Under Secretary of Defense for Personnel and Readiness direct the Assistant Secretary of Defense for Health Affairs, in conjunction with the service surgeons general, to complete and fully implement, within an established time frame, the dashboards and detailed implementation plans for each of the approved health care initiatives in a manner that incorporates the desired characteristics of results-oriented management practices, such as the inclusion of performance metrics, investment costs, and cost savings estimates.

Progress:

As of December 2013, DOD had not fully completed or implemented plans that incorporate desired characteristics of results-oriented management practices for each of its 11 initiatives, as GAO recommended in April 2012. GAO previously reported that DOD had developed an 11-step project plan for its initiatives and had completed 3 of 11 such project plans as of January 2013. However, in light of the establishment of the Defense Health Agency (DHA) in October 2013, DOD has identified a link from each of the 11 initiatives to the new agency’s seven objectives and identified an organization within DHA responsible for oversight of each initiative. According to a senior official in Health Affairs, DOD plans to develop a dashboard for each of these seven objectives, which will include measures and targets for the 11 initiatives. However, DOD could not provide specific information to clarify whether it will complete and implement plans that incorporate the desired characteristics of results-oriented management practices for the 11 initiatives within the framework of its new dashboards for the seven objectives of DHA. Without such plans, DOD may not be able to achieve its goal of a more cost-efficient health care system.

Action:

To enhance its efforts to manage rising health care costs and demonstrate sustained leadership commitment for achieving the performance goals of the Military Health System’s strategic initiatives, the Department of Defense (DOD) should complete the implementation of an overall monitoring process across its portfolio of initiatives for overseeing the initiatives’ progress and identifying accountable officials and their roles and responsibilities for all of its initiatives.

Progress:

DOD completed the implementation of its overall monitoring process of its health care initiatives consistent with GAO’s April 2012 recommendation by identifying accountable officials and their roles and responsibilities and approving a standardized process that implements an 11-step project plan. Specifically, DOD has assigned each initiative a working group, an initiative leader, and executive sponsor, who work together to help ensure that their initiative stays on schedule, on budget, and achieves performance goals. Additionally, the Review and Analysis group, consisting of the Assistant Secretary of Defense (Health Affairs) and the Service Surgeons General, approves the initiatives and reviews their status on a quarterly basis. DOD information notes that the executive sponsors review initiative status or progress at each quarterly meeting of the Review and Analysis group. DOD’s efforts to apply a standardized process should help it better monitor the initiatives’ progress, improve collaboration across the organizational boundaries of the Military Health System, and achieve the goal of more cost-efficient health care.

  • portrait of
    • Brenda S. Farrell
    • Director, Defense Capabilities and Management
    • farrellb@gao.gov
    • (202) 512-3604