Defense Health Care:

New Managed Care Plan Progressing, but Cost and Performance Issues Remain

HEHS-96-128: Published: Jun 14, 1996. Publicly Released: Jun 14, 1996.

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Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) implementation of its TRICARE managed health care program, focusing on: (1) whether early implementation produced the expected results; (2) how early outcomes may affect costs; and (3) whether DOD is capturing data needed to manage and assess TRICARE performance.

GAO found that: (1) early implementation of TRICARE has resulted in large numbers of beneficiaries enrolling in TRICARE Prime, which DOD believes is cost-effective; (2) DOD has encountered many start-up problems, such as a delay in the TRICARE benefits package, higher than expected early enrollment, and computer systems' incompatibility; (3) DOD and TRICARE contractors have diligently addressed their start-up problems and have disseminated lessons learned from those problems; (4) DOD efforts to contain TRICARE costs may be hindered by uncertainties regarding resource-sharing arrangements and utilization management problems; (5) DOD is exploring the use of task order resource support as an alternative to resource sharing arrangements and giving hospital commanders more control over dependent-care funds to give military hospitals more flexibility in obtaining support services from TRICARE contractors; (6) DOD delayed implementing utilization management because it was not ready to perform this function in the northwest and southwest regions as planned; and (7) although DOD is defining TRICARE performance measures, it is not collecting key data on beneficiaries' access to care or the enrollment of former nonusers who are eligible to use the military health care system.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD reported progress in implementing this recommendation and GAO has initiated an assignment to address the access issue in depth, including the recommended measuring performance against standards. Therefore, GAO believes that assignment will encompass and complete the recommended action.

    Recommendation: The Secretary of Defense should direct the Assistant Secretary of Defense for Health Affairs to collect data on the timeliness of appointments in order to measure TRICARE performance in improving beneficiary access against DOD standards.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD has incorporated TRICARE questions about third-party insurance payers into its ongoing user surveys. This provides DOD the computerized data to identify the impact of beneficiaries choosing TRICARE over other health care options and to complete the recommended action.

    Recommendation: The Secretary of Defense should direct the Assistant Secretary of Defense for Health Affairs to assess the impact of new beneficiaries who would not be using military health care if not for TRICARE, by defining these new users, identifying them, and estimating the cost implications of their use of military health care.

    Agency Affected: Department of Defense


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