Health Policy in the U.S & the MHS LCDR John Gardner Uniformed Services University of the Health Sciences
Disclosures Presenter has no financial interest to disclose. This continuing education activity is managed and accredited by Professional Education Services Group in cooperation with the MedXellence Program. PESG, and MedXellence Staff, and accrediting organizations do not support or endorse any product or service mentioned in this activity. Neither PESG nor MedXellence Staff have any financial interest to disclose. 2
Learning Objectives Familiarization with the basics of U.S. health policy Familiarization of health policy and policy-driven strategies within the Military Health System 3
On the Agenda Familiarization with the basics of U.S. health policy Familiarization of health policy within the Military Health System Policy-driven strategy within the MHS 4
What is Health Policy? Health policy refers to decisions, plans, and actions that are undertaken to achieve specific health care goals within a society. An explicit health policy can achieve several things: it defines a vision for the future which in turn helps to establish targets and points of reference for the short and medium term. WHO. www.who.int/topics/health_policy/en/ 5
The fundamental question Is health care (or health) an endowed right or an earned privilege? How a country answers this fundamental question drives the foundation of other health policies related to financing, payment, and delivery (Hsaio & Heller, 2007) In the fragmented U.S. system, you actually see both philosophies Right all (of a defined population) are entitled to guaranteed access to the benefit (Medicare, VA) Privilege not everyone is entitled to the benefit (thus, high uninsured rates persist) 6
Public Interest Theory of Government If health care is a right, government s role is typically to: 1.Facilitate redistribution to assist the poor 2.Improve the economic efficiency of the delivery method of medical services, minimizing the likelihood of monopoly and adjudicating situations where externalities exist What if a privilege? Tools used to accomplish these objectives include: Taxation (& Tax Credits) Expenditures Regulation Feldstein, P. 2007 7
Why is Health Policy Important? Stewardship of Scarce Resources 17.7% GDP 8
Why is Health Policy Important? Silo-breaking 2005 Bradley, Elkins, Herrin & Elbel, 2011 9
Why is Health Policy Important? Value 10
Why is Health Policy Important? Complexity (Good) Health policy addresses complexity - impacting the systems designed to provide health. Systems thinking is necessary Function follows form Will help to find leverage points for improvement Will help coordinate care and remove silos Comparative effectiveness & variation studies can help make sense of complexity We have high quality components: well trained providers & staff, advanced technology, etc. But It s like we took the world s best and most complicated Lego set and let a small child put it together without the instructions. Carroll, A. (Aug 14, 2013) www.theincidentaleconomist.com 11
Longest Model of U.S. Policymaking Longest, B.B. (2009). Health policymaking in the United States. Chicago: HAP. 12
Policy in the MHS 13
Factors Shaping the MHS Policy Environment Affordable Care Act affects both supply and demand Insurance for young adults Reduction in the number of uninsured Source: 2012 MHS Stakeholder s Report
Factors Shaping the MHS Policy Environment Increased individual demand due to increased illness burden Source: 2012 MHS Stakeholder s Report
Factors Shaping the MHS Policy Environment Enduring medical effects of eleven-plus years of war Source: 2012 MHS Stakeholder s Report
Factors Shaping the MHS Policy Environment Rising costs of providing the benefit Source: 2012 MHS Stakeholder s Report
Finite Resources Spur Facility Level Scrutiny Army Army Navy Navy Air Force Air Force NCR Medical NCR Medical OCONUS OCONUS Cost Per RWP Cost Per RWP Source: RDML Bono Town Hall meeting, Oct 2013 18
Who are the MHS stakeholders? Enrollees Beneficiaries Commanders Staff Citizens Congress 19
Who Makes Policy for the MHS Secretary of Defense Ultimate Responsibility Proposes Statutes for action by Congress Proposes Regulations for action within DoD Approves Policy for Active Duty Service Members when we want an expanded benefit Secretary of Defense authorized to delegate his authority Did so to ASD(HA) who works for the USD(P&R) 20
Statutory and Regulatory Program Chapter 55 of Title 10 1072 who gets benefits 1074 benefits available for ADSMs 1076/1077 what benefits are available in an MTF for ADFMs 1079 what benefits can and can not be purchased for ADFMs 1086 what benefits can and can not be purchased for retirees and their family members 1097 - What types of plans we can have 21
TRICARE Currently have a triple-option benefit Standard Fee for service Extra PPO Prime HMO What if we want to change the entire program and adopt some other organizational structure? 22
What makes the MHS different? Medical readiness Deployable medical capability Disaster response Innovations in medical mission support Wounded Warrior care Source: www.health.mil/about_mhs/health_care_in_the_mhs.aspx 23
The Quadruple Aim Source: 24
Why Does the MHS Make Policy? Need (i.e. gap in desired and current situation) identified Keep up with technology, science, medical treatment advances Situational Wounded Warriors need more and different types of care and benefits Lobbyist or others convince Congress we need to provide something, perhaps to someone new National laws also apply to the MHS (ACA, e.g.) (Mandates/directives) Beneficiaries appeal payment denials claiming something is medically necessary 25
Longest Model of U.S. Policymaking Longest, B.B. (2009). Health policymaking in the United States. Chicago: HAP. 26
Implementation: Tricare for Life Problem (Gap) Existed Solution: Identified & Proposed President: Clinton (Democrat) House & Senate: Republican NDAA 2001 27
Modification: Changing Statutes ULB process - Unified Legislation & Budgeting USD (Personnel & Readiness)-specific: Personnel issues Each Service or Field Activity submits requests Board reviews and votes Secretary makes final decision DoD formally submits to Congress legislation it would like to have Lengthy process sometimes cost cycles are skipped Not useful for more urgent needs 28
How Does the MHS Facilitate the Process? Maintain good working relationships with staff for the HASC and SASC They ask for help on items their members want and we provide drafting assistance for them Many times their wants are vague their members want to do something for military members or family Sometimes it is very specific Drafting for HASC and SASC is routine 29
Rule Making When do we do rule making: When Congress gives us a new statutory requirement Examples: The smoking cessation statute Cancer prevention screenings for women When directed (Implementation required by a new or modified regulation) Administrative Procedure Act - Notice and comment to the public about what the government intends to do Lengthy in time (12-24 months) 30
MHS Health Policy s Evolution 1940s-1950s Title 10 Legislated Benefit Space Required for Active Duty Space Available for Families and Retirees 1966 CHAMPUS Legislated Benefit Civilian Health Care where MTFs do not exist. Families and Retirees <65 1993 TRICARE Managed Care Legislation Automatic enrollment for Active Duty Space Required for TRICARE Prime enrollees Space Available for Non-enrollees 1995-1998 TRICARE Triple Option Benefits Prime, Extra and Standard TRICARE Senior Prime Demonstration 1999-2000 Further Expansion: Prime Remote for Active Duty TRICARE provider rates >=Medicare Beneficiary Counseling & Assistance Coordinators 2001 Catastrophic Cap Reduced to $3,000 Enhanced TRICARE Retiree Dental Program TRICARE Senior Pharmacy Elimination of Prime Co-pays for AD Family Members Extension of Medical and Dental Benefits to Survivors School Physicals Entitlement for Medal of Honor Recipients TRICARE Prime Travel Entitlement Chiropractic Care Program 2002 TRICARE Plus TRICARE For Life TRICARE Prime Remote for AD Family Members 2003 TRICARE Online TRICARE implements HIPPA Patient Privacy Standard Elimination of AD Family Member Co-Pays 2004 Transitional Assistance Management Program (TAMP) Expansion Guard/Reserve TRICARE (Early Eligibility, Reserve Family Demo) Elimination of Non-Availability Statements (NAS) 2005 TRICARE Reserve Select Extended Health Care Option/Home Health Care (ECHO / EHHC) TRICARE Maternity Care Options 2006 Extended TRICARE benefits for dependents whose sponsor dies on Active Duty Limit deductibles/co-pays for nursing home residents under the Pharmacy Program Enhancement of TRICARE Reserve Select coverage 2007 Expansion of TRICARE Reserve Select coverage to All Reservists 2011 TRICARE Young Adult (under 26; $186/mo) 31
Policy-Driven Transformation 34
Opportunities There are opportunities to realize savings in the MHS through the adoption of common clinical and business processes and the consolidation and standardization of various shared services. Ashton B. Carter Deputy Secretary of Defense Source: Deputy Secretary of Defense memorandum for the Secretaries of the Military Departments, 11 Mar 2013
Necessity of Transformation Transformation of the MHS is critical for the future What does this transformation look like? Primary Components include: Defense Health Agency Enhanced Multi-Service Markets National Capital Region Directorate
Defense Health Agency (DHA) Consolidation and centralization are occurring at the service level but there is still fragmentation at the MHS enterprise level -Task Force on the Future of Military Health Care Final Report, Dec 2007 DHA is the keystone of the MHS reform, driving action in: Improved enterprise-wide measurement of outcomes Rapid adoption of proven practices Reduction in unwarranted variation Improvement in the coordination of care across time and treatment venues Designated as a Combat Support Agency (CSA) Led by a three-star flag or general officer Source: Response to Congressional Defense Committees; Plan for Reform of the Administration of the Military Health System, 10 Jun 2013
Secretary of Defense DHA Organizational Structure Policy Development CJCS USD(P&R) ASD(HA) Policy Execution Combat Support Agency Responsibilities Defense Health Agency Director Deputy Director Contracting CAE Organization DHSS Equal Employment Opportunity Office Chief of Staff Senior Enlisted Advisor JMIS Communications Administration & Management Comptroller DHA OGC Healthcare Operations Directorate (CMO) Research & Development Directorate Health IT Directorate (CIO) Education & Training Directorate Business Support Directorate NCR Medical Directorate Readiness Innovation (CTO) Facility Planning Walter Reed National Military Medical Center Pharmacy Public Health TRICARE Health Plan Clinical Support Governance, Customer Relations & Management Infrastructure & Operations Solution Delivery Information Delivery Medical Logistics Budget & Resource Management Program Integrity Ft. Belvoir Community Hospital Joint Pathology Center Warrior Care Program Information Security & Privacy Clinical Analytics 40
DHA Responsibilities DHA will assume management responsibility for shared services, functions and activities of the MHS and its common business and clinical processes, starting with the following ten services 1. TRICARE Health Plan 2. Pharmacy programs 3. Medical education and training 4. Medical research and development 5. Health information technology 6. Facility planning 7. Public health 8. Medical logistics 9. Acquisition 10. Budget and resource management
DHA Responsibilities DHA will assume management responsibility for shared services, functions and activities of the MHS and its common business and clinical processes, starting with the following ten services 1. TRICARE Health Plan 2. Pharmacy programs 3. Medical education and training 4. Medical research and development 5. Health information technology 6. Facility planning 7. Public health 8. Medical logistics 9. Acquisition 10. Budget and resource management
Projected Savings FY15-19 TRICARE Health Plan $695M ($456M risk-adjusted) Pharmacy $2.9B ($1.2B risk-adjusted) Medical Logistics $358M ($189M risk-adjusted) Facility Planning $915M ($537M risk-adjusted) Health Information Technology $688M ($265M risk-adjusted) Public Health $768M ($293 risk adjusted) Med Education and Training $5.1M (5.1M risk-adjusted) Contracting $251M ($136 risk-adjusted) Research and Development $213M ($98M risk-adjusted) Budget & Resource Mgmt $279M ($279 risk-adjusted)
Enhanced Multi-Service Markets Building upon the multi-service market concept initially introduced in 2003 Additional authorities and robust governance structure emsm managers will be accountable for performance of MTFs Planning, implementation, and execution of five-year business performance plans Six markets designated as emsm s Hawaii Puget Sound Colorado Springs San Antonio Tidewater National Capital Area
What Makes Them Enhanced? Market Manager Within each emsm, an appointed market manager has the authority to: Manage the allocation of the budget for the market Direct common clinical and business functions for the market Direct the movement of workload and workforce among the medical treatment facilities Develop, execute and monitor the business performance plan Business Performance Plan Within each emsm, business performance plans will be: Fully-integrated across the entire market and will replace current MTF based business plans Based on a 5-year planning cycle, as opposed to the current 3-year plan Aligned with budget execution process to ensure continuity
emsm Manager Responsibilities and Authorities Responsibilities Optimize the readiness to deploy medically ready forces and ready medical forces. Develop a five-year Business Performance Plan for the emsm. Enhanced Authorities Convene monthly meetings with MTF Commanders Monitor recapture of care in the emsm to support clinical currency Monitor MTF readiness metrics (e.g., Individual Medical Readiness (IMR), Integrated Disability Evaluation System (IDES), etc.) Direct short term movement of personnel to support operational effectiveness Coordinate, review and approve resource allocations to support GME requirements Develop Memorandums of Agreement (MOAs) with external organizations (i.e., Veterans Affairs, etc.) Facilitate programmatic changes to enhance specialty programs Develop and execute five-year Business Performance Plan across the emsm Adjust MTF Business Performance Plans to optimize the emsm Represent emsm at the Medical Deputies Action Group (MDAG) Monitor deviations from the emsm five-year Business Performance Plan; vet through MDAG as appropriate Prepare market-specific POM initiatives/variances for enterprise issues
emsm Manager Responsibilities and Authorities Responsibilities Manage and allocate the budget for the emsm; drive cost avoidance and cost reduction at the market level. Ensure workload reporting is standardized and comparable across the emsm where appropriate. Direct common clinical and business practices across the emsm to improve effectiveness, value, and efficiency. Enhanced Authorities Manage the allocation of the budget for the emsm as it relates to DHP funding BAG 1, in accordance with the five-year Business Performance Plan Conduct quarterly execution reviews against the emsm five-year Business Performance Plan and make mid-year allocation adjustments Manage the emsm incentive structure Direct emsm discretionary funds for execution year adjustments and bridge funding to POM initiatives Direct common workflow reporting processes to standardize workload measurement across the emsm Report on emsm workload measures to the MDAG Work with DHA and other emsms in standardizing processes across the emsms, where appropriate Establish and monitor consolidated appointing and referrals Identify and implement clinical best practices and/or functions (e.g., pre-operative patients, etc.) Evaluate shared services where appropriate (e.g., regional and/or local level janitorial contract, transcriptions, coding, etc.) Develop MOAs with the TROs, VA, private sector healthcare organizations and MCSC to optimize healthcare in the emsm Monitor workload and conduct analyses to ensure emsm meets the five-year Business Performance Plan Direct movement of personnel to support emsm performance Report on emsm performance measures to the MDAG
National Capital Region Directorate Creation of the NCR Directorate disestablishes the Joint Task Force National Capital Region Medical Command (JTF CAPMED) Will provide centralized coordination for policy, planning, and oversight to integrate and operate NCR healthcare services In addition to being a emsm manager, the Director will exercise authority, direction, and control over WRNMMC, Fort Belvoir Community Hospital, and all subordinate clinics
MHS Strategic Vision The integrated Military Health System delivers a coordinated continuum of preventive and curative services to eligible beneficiaries and is accountable for health outcomes while supporting the Services warfighter requirements. Source: The Military Health System Strategic Plan: Achieving a Better, Stronger, and More Relevant Military Health System. (Draft). 9/30/14
MHS Integrated Delivery System MHS Draft Strategic Plan (2014). MHS Draft Strategic Plan (2014).
Supporting Strategic Objectives Seven objectives derived to reflect our joint approach to MHS reforms that ensure military readiness by improving the care and health of our beneficiaries with cost-effective strategies 1. Promote more effective and efficient health care operations through enhanced enterprise-wide shared services 2. Deliver more comprehensive primary care and integrated health services using advanced patient-centered medical homes 3. Coordinate care over time and across treatment settings to improve outcomes in the management of chronic illness, particularly for patients with complex medical and social problems. Source: Response to FY13 NDAA Section 731: Plan for Reform of the Administration of the Military Health System
Objectives (cont.) 4. Establish more inter-service standards/metrics and standardize processes to promote learning and continuous improvement 5. Create enhanced value in military medical markets (emsms) using an integrated approach specified in five-year business plans 6. Align incentives with health and readiness outcomes to reward value creation 7. Match personnel, infrastructure and funding to current missions, future missions and population demand Coordination & Integration Source: Response to FY13 NDAA Section 731: Plan for Reform of the Administration of the Military Health System
Summary Health policy is created and implemented in numerous ways and for many reasons, but it reflects consensus on values and guides decision-making The Military Health System is policy driven, and TRICARE is one of the more visible policies within the MHS, which has evolved over time Dynamics of both purchased & direct care continue to change in ways similar to & different from those in the U.S. Supply and demand The MHS is in the beginning stages of the biggest transformation in its history Opportunities to improve efficiency and reduce costs, in large part through greater/improved integration Focus on Jointness 58