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:

DOD has taken steps to address GAO’s April 2012 recommendation but has not yet completed the process. In previous updates on this action, GAO reported that DOD had developed an 11-step project plan for its 11 approved health care initiatives and had completed 3 of 11 such project plans as of January 2013. However, in 2015, a senior DOD official stated that DOD has since ended this approach and merged its 11 initiatives into its new strategic plan, known as the MHS [Military Health System] Health Benefit Delivery Concept of Operations. The official stated that DOD has identified a link between the 11 initiatives and the 22 objectives of the new strategic plan. The official stated that DOD's management approach is to develop metrics for achievement of Military Health System-wide goals and include an analysis of these metrics in the strategic plan. However, as of October 2015, the official was unable to provide an estimated issuance date, and as the plan is not yet published, GAO is unable to verify the steps that DOD may have taken. Without fully developed performance metrics and cost estimates, decision makers lack key information for assessing the status and progress of DOD’s efforts to reform its health 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