Defense Health Care:

Obstacles in Implementing Coordinated Care

T-HRD-92-24: Published: Apr 7, 1992. Publicly Released: Apr 7, 1992.

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GAO discussed the Department of Defense's (DOD) plans for adopting its Coordinated Care Program throughout the military health care services system, focusing on: (1) challenges DOD faces in implementing Coordinated Care; (2) options available to DOD to help it deal with implementation problems; and (3) the use of contracting in Coordinated Care. GAO noted that: (1) DOD faces significant challenges as it tries to restructure its health care system, including budget constraints, difficulty in building a consensus for restructuring changes, and a lack of reliable data upon which to base decisions or key operational aspects of the program; (2) significant implementation issues include beneficiary cost sharing and incentives to participate, and administrative concerns involving data systems needed to support key program elements; (3) the move to managed health care must include, or be accompanied by, a budgeting and resource allocation system that can accurately predict resource needs, distribute resources equitably, and give managers the proper incentives to achieve desired health care and budgetary objectives; and (4) DOD cannot meet all the health care needs of its beneficiaries through its own medical facilities and will need to rely on contracting for health care services in the future.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In June 1992, DOD made several adjustments to its implementation of the coordinated care program industry, eliminating the plan to lock out enrollees from military facilities.

    Recommendation: DOD should, along with adjusting its program feature design, postpone its plans to lock out nonenrollees from military health care facilities. This would give voluntary enrollment a chance to succeed. If it does not, DOD could reinstitute its lock out plan for nonenrolled beneficiaries.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD has completed a comprehensive study of the structure of the military medical care system, which stresses the need for DOD to develop a staffing plan for medical personnel. DOD, along with the military departments, is now working on staffing models that should address the areas cited in the recommendation.

    Recommendation: DOD will need to decide how to allocate its medical personnel and where it makes the most economic sense to contract for services. In making these decisions, DOD should consider a number of factors, in addition to cost and quality of care considerations, including: (1) the availability of high-quality civilian health care providers in areas where beneficiaries are located; (2) military facilities' capabilities to deliver needed services; (3) wartime preparedness and training requirements, including arrangements to meet beneficiary needs during call-ups and deployments; and (4) the extent and variability of military expertise and continuity in administering managed health care programs.

    Agency Affected: Department of Defense


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