Military Health System Transformation

1. Military Health System Transformation Futureof MilitaryMedicine

2. MHS is at a transformational “tipping point” ALL have a stake in its future BLUF

3. DoD TRANSFORMATION • Transforming how we fight • Transforming how we work with others • Transforming how we do business Hon. Donald H. Rumsfeld Secretary of Defense

4. DoD TRANSFORMATION “… This generation is not familiar with three words that we come across far too often: ‘we used to’. They are focused on the new enemies that face us. There is no going back to the way we used to be. Transforming is not about doing the same things better, but doing better things.” General Lance Smith Commander, JFCOM

5. Current geopolitical realities and GWOT Implications beyond combat service support MTF as a Force Projection Platform Staffed for contingency, but executing sustainment operations “Peacetime” healthcare operations PBD 753 Improve overall operational culture Better business practices in a resource constrained environment Military Health System, or a health plan for the military (Warfighting Capability vs Commodity) CHALLENGES FOR THE MHS

6. INTEGRATING THE “TECTONIC PLATES” QDR MRR LAWG JT/UNIFIED BRAC ET AL MEDCOM

7. INTEGRATING THE “TECTONIC PLATES” MHS-OT LAWG MRR QDR • Better aligned personnel, • business processes, and • infrastructure • Improved metrics • More joint • Better training JT/UNIFIED BRAC “ET AL” MEDCOM

8. Project Office, chartered by the Deputy Secretary of Defense, to “accelerate and enhance the quality of organizational change” in the MHS Jointly staffed office Under authority of USD (Personnel and Readiness) Delegation to the ASD (Health Affairs) Work and recommendations reviewed for approval by the MHS Executive Review Committee (MHSER) Within the existing governance and organizational structure Sunset date – 30 Sep 07 MHS Office of Transformation (MHS-OT)

9. Achieve measurable improvement in MHS performance Develop integrated implementation plan Coordinate the development of directives to implement approved initiatives Monitor, coordinate, and integrate the implementation of plan initiatives Institutionalize MHS transformation activities MHS-OT Objectives

10. Institutionalizing Transformation MHS-OT Change Activity “Sunset” for the MHS Office of Transformation Offices of Primary Responsibility Time 30 Sep 07

11. MHS Transformation Agenda • Provide the Joint Force with best-in-the world Operational Medicine/Force Health Protection (FHP), and high-quality, cost efficient health care for beneficiaries, four things are being done: • Transforming the Force • Transforming the Infrastructure • Transforming the Business • Transforming the Benefit

12. 1. Medical Readiness Review - Determine size and mix of military medical force needed to support Joint force operations 2. Interoperability and agility of operational medicine capabilities - Ensure capabilities are “born Joint” and that medical forces are organized, trained and equipped to best support Joint force 3. Homeland defense and medical civil-military operations - Address role of DoD in providing medical support for Homeland Defense and other operations, such as disaster assistance 4. Healthy, enhanced and protected force - Develop Joint standards for health, performance and protection of military personnel, tailored to Service and occupational requirements Transform the Force

13. Joint medical education and training focused on performance-based management - Develop common curriculum for joint medical education and training to support performance-based management initiatives Shaping future Joint medical force - Provide enhanced bonuses to attract previously trained physicians in shortage specialties - Enhance medical force management, recruitment and retention Integrate graduate medical education - Provide joint management for Health Professions Education programs Transform the Force (Cont.)

14. 8. Transform the infrastructure - Develop standard methods and measures for evaluating facility condition; streamline military construction (MILCON) timelines; raise allowable thresholds for approval of minor construction within DoD Implement Base Realignment and Closing (BRAC) - Ensure that BRAC legislation and timelines are met, and that all enabling processes and changes are in place Transform the Infrastructure

15. Process Improvement - Provide standard process improvement methodology and training, process changes, incentives and other needed support Performance-based planning - Provide common framework, language, and performance measures for both readiness and health care, based on private sector best practices Performance-based financing - Develop DoD model for predicting health care costs, improved, stable funding mechanism, and Innovation Investment Process that will provide resources based on validated business case Eliminate utilization barriers - Maintain clinical proficiency by placing medical personnel in other government agencies and private sector care settings Transform the Business

16. Management of Jointly-operated facilities - Provide governance structures and processes for operation of Jointly-staffed treatment facilities IM/IT alignment - Ensure that business processes are transformed prior to IM/IT initiatives being implemented, and that IM/IT initiatives are aligned with operational priorities Contracting for professional services - Provide for market-level contracting for health care personnel, to reduce competition between DoD entities and lower costs Contracting for health care services - Provide for opportunities to contract out medical and ancillary services in cases where readiness is not affected Transform the Business (Cont.)

17. 17. Effective patient partnerships - Promote partnerships with beneficiaries, so that they participate in their health care Sustain the benefit - Updating the TRICARE Benefit Design Transform the Benefit

18. 2. Interoperability and agility of operational medicine capabilities - Joint Health Surveillance, Intelligence, and Preventive Medicine - Joint Casualty Management - Joint Patient Movement - Interoperable and interdependent data capture systems EMR PDHA/PRDHA 4. Healthy, enhanced and protected force - Revision to operational screening requirements and surveillance PAD Related Initiatives

19. 10. Performance-based planning - Capture uniformed provider workload performed in MTFs Private sector (external RSA) VA 11. Performance-based financing - Separation of professional and institutional workload - RVU scale for readiness and military-unique services 12. Eliminate utilization barriers - Capture and coding of non-MTF care provided by uniformed providers in civilian settings PAD Related Initiatives (Cont.)

20. Accurately measure and value the cost of maintaining readiness - Currently commingled with the cost of providing beneficiary health care - Inhibits the management of both readiness and health care costs Coordination above the services - Operational, administrative and tactical control Patient volume and illness burden required to maintain a military medical force trained and ready - Properly size the direct care system Identify a complete episode of care for an individual patient - Critical enabler for implementing evidence-based medicine Transformation Roadblocks

21. Summary • MHS Transformation is structured process to improve performance of MHS • MHS Office of Transformation is focal point for coordinating and integrating transformation initiatives– in collaborative process with major stakeholders • When implemented, transformation initiatives will allow MHS to — • Provide medically-ready joint force, capable of performing across full range of military operations • Maintain ready medical force capable of supporting joint force operations– during combat operations, stability operations, Homeland Defense, disaster relief and other 21st Century challenges • Deliver high quality beneficiary health care for 9.2 million TRICARE beneficiaries • ….and ensure that these capabilities can be sustained within a constrained Defense budget

22. DESIRED END STATE Credible medical force to support the joint warfighter in any situation at any time along the full range of military operations.

23. Questions?

24. Back-up slides

25. Objective: $3.6 B infrastructure re-engineering completed by 2011 Major restructuring in San Antonio and NCA Creation of joint medical, education and research and development venues Transition organization and culture to joint operations $687 M shortfall despite efforts to reduce cost Integrated implementation consistent with goal of Medical Joint Cross Service Group and essential to achieve full benefit of joint facilities BRACImplementation

26. Objective: Ensure right number and skill mix for future military operations Execute current MRR by converting MIL to CIV Implement on-going process to continue to define the active duty operational requirement for MHS personnel Conversions create opportunity to optimize staff mix and capabilities Execution (rate and speed) of conversions cannot harm mission effectiveness Ability to convert may depend on market conditions With expanding role of MHS in Homeland Defense and Civil Military operations, requirements may change Medical Readiness Review

27. Objective: Pass legislation and implement rule changes for implementation beginning in 2007 to allow the Department to manage the benefit more effectively for the long term Save significant dollars ($11+ B) for the Department over the POM Original STB proposal met opposition but potential ways ahead identified Revised approach: Retain cost share adjustment flexibility within the Department Obtain appropriate indexing rates for future fee increases Expedite GAO Study of MHS Costs Maintain TRICARE Reserve Select program as currently structured Obtain federal pricing for use in retail pharmacy Allow DoD to implement phased-in premium adjustments in FY2007 Sustain the Benefit Campaign

28. Reduce Death, Disease& Injury. Restore Function Improve Beneficiary Satisfaction With Health Plan Maintain Costs Shape & Sustain Benefit Create Healthy Communities Deploy A Medically Ready Force QDR Initiatives: 4-Healthy Force 5-Joint Medical Education 9-Process Improvement 14-IM/IT 16-Contract For Professional Services 17-Patient Partnership MHS Strategic Objectives And TheirLink To QDR Initiatives Key Strategic Objectives QDR Initiatives: 1- MRR 2-Interoperability 4-Healthy Force 9-Process Improvement 14-IM/IT QDR Initiatives: 3-Homeland Defense 4-Healthy Force 5-Joint Medical Education 6-Shaping Medical Force 9-Process Improvement 12-Utilization Barriers 14-IM/IT 17-Patient Partnership QDR Initiatives: 4-Healthy Force 5-Joint Medical Education 6-Shaping Medical Force 8-Infrastructure 9-Process Improvement 14-IM/IT 16-Contract For Professional Services 17-Patient Partnership QDR Initiatives: 5-Joint Medical Education 9-Process Improvement 10-Performanced Based Planning 11-Performance Based Financing 14-IM/IT 15-Contracting For Health Care Services 16-Contract For Professional Services 17-Patient Partnership 19 -BRAC

29. QDR MHS Transformation Implementation Plan MHS Strategic Plan Transforms the-- Business Force Infrastructure Benefit Through 18 QDR Initiatives in Four Focus Areas Sustainable, improved performance From Plans to Performance

30. MedicalTransformationProcess The Military Health System Office of Transformation (MHS-OT) is charting the course for change implementation in the MHS Planning Informed by the MHS Strategic plan, The QDR provides the “what” and “why” The MHS-OT provides the “how,” “when,” and “by whom.” Execution Sustainment Transformation integrated into the institutional processes 2005 2006 2007 2008 2009 2010 2011 Current Status