Defense Health Care: Actions Needed to Address Long-Standing Management Challenges with Medical Facilities
Fast Facts
DOD transferred the management of its medical facilities from the military departments to the Defense Health Agency to increase efficiency, lower costs, and improve the quality of medical care. To achieve these goals, DHA created 22 offices to manage over 700 medical facilities in 2022. But DHA didn't have the staff to meet its estimated needs for these offices.
In response, DHA reduced the number of offices from 22 to 9 in 2023. But DHA still doesn't know how many staff it needs for these offices.
We recommended that DHA analyze workloads and document a detailed process to figure out how many people it needs in these offices, and more.
Highlights
What GAO Found
To assume responsibility for the management of medical facilities from the military departments, the Department of Defense's (DOD) Defense Health Agency (DHA) began to implement an organizational structure called the market structure in January 2020. Subsequently, DHA replaced the market structure with the network structure in October 2023 to address challenges identified in the market structure. The similarities and differences in these structures are mainly in whether the structures are organized by military department affiliation, the number of management offices, and the rank of management office leaders.
DHA's Market and Network Structures to Manage Medical Facilities
|
Organizational structure |
Primarily organized by military department affiliation |
Number of management offices |
Number and rank of management office leaders |
|---|---|---|---|
|
Market |
No |
22 |
7 General or Flag Officers 15 Captains or Colonels |
|
Network |
Yes |
9 |
9 General or Flag Officers |
Source: GAO analysis of Department of Defense and Defense Health Agency (DHA) information. | GAO-25-107432
While DHA has started implementing a network structure, it has not fully determined all the resources it needs. Specifically,
- DHA determined it needed nine offices to manage its resources under the network structure. However, DHA has not explained to Congress how this structure meets the intent of a statute. For example, DHA is limited to establishing no more than two regions within the continental United States and no more than two regions outside the continental United States to manage its medical facilities. Until DHA provides such information, Congress risks not having reasonable assurance that DHA is implementing an effective organizational structure that, among other things, fully integrates the military departments' medical capabilities and enhances joint medical operations.
- DHA has not fully determined and validated how many personnel resources are required to manage and support its medical facilities. DHA has not completed these efforts because it has not issued guidance that details the processes needed to determine and validate personnel requirements, including by analyzing workload. Additionally, DHA has not developed a plan to implement such guidance, once issued, for these efforts. Without issuing detailed guidance and developing an implementation plan, DHA lacks the information it needs to establish personnel requirements to accomplish its objectives and track its progress.
- DHA has not determined how it will consolidate business functions (e.g., clinical quality management and information technology) to save on costs because it has not studied them. DHA has also not developed an implementation plan for consolidating these functions. By studying its functions and developing an implementation plan to track progress in consolidating them, DHA will be better positioned to ensure these functions are structured to manage its medical facilities as efficiently and effectively as possible.
Why GAO Did This Study
DOD realigned its medical facilities from the military departments to DHA in response to legislative reforms initiated in 2016. These reforms were intended to create a more efficient oversight structure for these facilities that would lower costs while improving care for military service members and eligible beneficiaries.
Section 714 of the National Defense Authorization Act for Fiscal Year 2024 includes a provision prohibiting DOD from advancing beyond phase one of DHA's plan to establish its network structure until GAO assesses and reports on DHA's transition efforts. Among other objectives, this report 1) describes how plans to manage medical facilities have changed, and 2) assesses the extent to which DHA has determined resources it needs to manage its facilities.
GAO reviewed policies, guidance, and other documentation related to DHA's organizational efforts. GAO interviewed DOD and DHA officials, including those from the network structure's nine management offices. GAO also spoke with officials from a nongeneralizable sample of six medical facilities about current and prior organizational structures.
Recommendations
GAO is making seven recommendations, including that DOD provide information to Congress on how the network structure meets the intent of a statute; issue guidance and develop an implementation plan to validate personnel requirements; and study business functions and develop an implementation plan to consolidate them. DOD concurred with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should ensure that the DHA Director provides information to Congress to clarify how the network structure meets the intent of section 712 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019. (Recommendation 1) |
DOD concurred with this recommendation. In its comments on our report issued in April 2025 and, similarly, in recent recommendation follow-up efforts, DOD stated that DHA has frequently briefed Congress on its restructuring plans. DOD considers DHA's restructuring to be complete and implemented consistent and in compliance with the law. While DOD considers the restructuring to be complete and compliant with the statute, providing information to Congress to clarify how the network structure meets the intent of the statute would provide Congress reasonable assurance that DHA is implementing an effective structure that fully integrates the military departments' medical capabilities and enhances joint military medical operations. As of April 2026, DOD officials have not shared any new actions the department has taken or plans to take since we issued our report in April 2025. Once DOD provides an update on its planned actions, we will assess the extent to which the department's actions support its provision of information to Congress to clarify how the network structure meets the intent of section 712 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019.
|
| Department of Defense |
Priority Rec.
The Secretary of Defense should ensure that the DHA Director issues guidance detailing the processes needed to determine and validate the number of personnel required to manage and support its medical facilities. This guidance should also include processes for conducting workload analyses and address the frequency with which these analyses should be conducted. (Recommendation 2) |
DOD concurred with this recommendation. In its comments on our report issued in April 2025 and, similarly, in recent recommendation follow-up efforts, DOD stated that DHA's restructuring is complete, and that any future work will continue to include guidance informed by requirements, workload, and appropriate timelines and milestones to ensure the continued, successful management and oversight of medical facilities. However, DOD has not issued such guidance detailing the processes needed to determine and validate the number of personnel required at its DHA headquarters and networks to manage and support its medical facilities. Moreover, as of April 2026, DOD officials have not shared any new actions the department plans to take since we issued our report in April 2025. Once DOD provides an update on its planned actions, we will assess the extent to which its actions support the department's issuance of guidance, including on the processes for conducting workload analyses and the frequency of such analyses, to determine and validate the number of personnel required at its DHA headquarters and networks to manage and support its medical facilities.
|
| Department of Defense | The Secretary of Defense should ensure that the DHA Director develops a plan with timelines and key milestones and deliverables to implement its guidance, once issued, to establish personnel requirements and that tracks its progress in determining and validating the number of personnel required, including analyzing workload, to manage and support its medical facilities. (Recommendation 3) |
DOD concurred with this recommendation. In its comments on our report issued in April 2025 and, similarly, in recent recommendation follow-up efforts, DOD stated that DHA's restructuring is complete, and that any future work will continue to include guidance informed by requirements, workload, and appropriate timelines and milestones to ensure the continued, successful management and oversight of medical facilities. However, DOD has not developed a plan with timelines and key milestones and deliverables to implement its guidance, once issued, to establish personnel requirements and which tracks its progress in determining and validating the number of personnel required at its DHA headquarters and networks to manage and support its medical facilities. Moreover, as of April 2026, DOD officials have not shared any new actions the department plans to take since we issued our report in April 2025. Once DOD provides an update on its planned actions, we will assess the extent to which its actions support the department's development of a plan with timelines and key milestones and deliverables to implement its guidance and track its progress in determining and validating the number of personnel required at its DHA headquarters and networks to manage and support its medical facilities.
|
| Department of Defense | The Secretary of Defense should ensure that the DHA Director studies DHA's business functions to determine which ones it will consolidate to manage and support its medical facilities. (Recommendation 4) |
DOD concurred with this recommendation and stated that DHA continues to study and review business functions for potential consolidation through the department's Comprehensive Review and Workforce Acceleration and Recapitalization Initiatives. The department planned to complete this effort by March 31, 2026. As of April 2026, however, DOD officials have not shared any new updates on the status of these efforts. Once DOD provides an update on its planned actions, we will assess the extent to which the actions support the department's studies of business functions to determine which ones it will consolidate at its DHA headquarters and networks to manage and support its medical facilities.
|
| Department of Defense | The Secretary of Defense should ensure that the DHA Director develops an implementation plan with timelines and key milestones and deliverables to track its progress consolidating business functions, once studied, to manage and support its medical facilities. (Recommendation 5) |
DOD concurred with this recommendation and stated that decisions regarding further consolidation of DHA's headquarters functions are being considered as part of DOD's Comprehensive Review and Workforce Acceleration and Recapitalization Initiatives. DOD further added that once such decisions are finalized, a plan of action and milestones will be developed to support implementation of organizational changes. The department planned to complete these efforts by March 31, 2026. As of April 2026, however, DOD officials have not shared any new updates on the status of these efforts. Once DOD provides an update on its planned actions, we will assess the extent to which the actions support the department's development of an implementation plan with timelines and key milestones and deliverables to track its progress consolidating business functions at its DHA headquarters and networks to manage and support its medical facilities.
|
| Department of Defense | The Secretary of Defense should ensure that the DHA Director further leverages collaborative mechanisms to continuously involve all key stakeholders and consider their input as DHA develops and implements the network structure to manage its medical facilities. (Recommendation 6) |
DOD concurred with this recommendation. In its comments on our report issued in April 2025 and, similarly, in recent recommendation follow-up efforts, DOD stated that DHA has established routine engagements with external stakeholders, including through regular meetings. We recognized these aspects of DHA's efforts to engage stakeholders. However, we disagreed that current practices ensured that DHA was fully leveraging collaborative mechanisms to continuously involve all key stakeholders in its organizational reform efforts. For example, DHA did not consistently use formal mechanisms to discuss how the organizational structure for managing its medical facilities affects military department missions. Leveraging collaborative mechanisms further to continuously involve all key stakeholders and consider their input would better position DHA to ensure the network structure effectively maintains both military health readiness requirements and the force health protection of military service members. As of April 2026, DOD officials have not shared any new actions the department plans to take since we issued our report in April 2025. Once DOD provides an update on its planned actions, we will assess the extent to which these efforts support its leveraging of collaborative mechanisms to continuously involve all key stakeholders from the Military Departments, Joint Staff, and Combatant Commands, and consider their input as the department implements the network structure to manage its medical facilities.
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| Department of Defense | The Secretary of Defense should ensure that the DHA Director continuously involves Congress in DHA's development and implementation of the network structure to manage its medical facilities and ensure congressional views are reflected. (Recommendation 7) |
DOD concurred with this recommendation. In its comments on our report issued in April 2025 and, similarly, in recent recommendation follow-up efforts, DOD stated that DHA has established routine engagements with external stakeholders, including through regular meetings. We recognized these aspects of DHA's efforts to engage Congress. However, we disagreed that current practices ensured that DHA was fully leveraging collaborative mechanisms to continuously involve Congress in its organizational reform efforts. For example, DHA did not consistently inform Congress about the accelerated pace of implementing its network structure. Leveraging collaborative mechanisms further to continuously involve Congress would better position DHA to ensure the network structure effectively meets the intent of legislative reforms to better serve the military. As of April 2026, DOD officials have not shared any new actions the department plans to take since we issued our report in April 2025. Once DOD provides an update on its planned actions, we will assess the extent to which these efforts support the department's continuous involvement of Congress in the implementation of the network structure to manage its medical facilities and ensure congressional views are reflected.
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