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 develop plans that incorporate desired characteristics of results-oriented management practices for each of its 11 initiatives, as GAO recommended in April 2012, but has not yet completed this process. 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 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. In response to a congressional mandate, DOD presented a plan for implementing the seven objectives of the DHA. However, in November 2013, GAO found that DOD’s plan for implementation of the DHA did not fully incorporate several key management practices, including attributes of successful performance measures such as measurable targets and baseline data. In addition, DOD did not provide separate cost estimates for the business lines of each shared service, obscuring the size and cost of each business line’s planned efficiencies. In its ongoing review of the implementation of DHA, GAO plans to assess DOD’s progress in addressing these and other concerns with the implementation of the DHA’s seven objectives. Without fully developing performance metrics and cost estimates, decision makers will continue to 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