Merging the Military Health System and the Veterans Health Administration

Merging the Military Health System (MHS) and the Veterans Health

Administration (VHA) into a Single Governance Structure

The views expressed in this academic research presentation are those of the author and do not necessarily reflect the official policy or position of the

U.S. Government, the Department of Veterans Affairs, the Department of Defense, or any of its agencies.

Colonel William B. Grimes, MHA, FACHE USA, RET

“Heretics Are Not All Bad!”

Be Persistent!

Paul K. Carlton, Jr., MD, FACSLt. Gen, USAF, Ret

Introduction - Argument Premise

Bottom Line: Until a single management or governance structure is clearly established from a national authority, the extent and success of collaboration efforts between DoD and VA health systems will remain limited by existing public laws and subject to the inherent bureaucracy of the two organizations.

Large scale change has happened….creating the Department of Homeland Security required realigning assets from 22 Federal Agencies. It was accomplished in six months but it took a national emergency and direct Presidential involvement.

None of UsWant to Face

What Lies Ahead of Us

It’s Never as Bad as it Seems

Introduction - Argument Logic

• If:- Increased DoD/VA collaboration improves access to care- Increased DoD/VA collaboration reduces cost - Increased DoD/VA collaboration improves quality

• and- Single governance improves DoD/VA collaboration

• Then:- Single governance improves access, cost, and quality

Cost

Access Quality

…but at what risk?...is the juice worth the squeeze?…but at what risk?...is the juice worth the squeeze?

Intro - Argument Parameters

Healthcare CommandHealthcare Command

Medical Education and Training Command


Force Health Protection Command


TRICARE ContractsTRICARE Contracts

DoD Medical Treatment Facilities and Clinics

DoD Medical Treatment Facilities and Clinics

Marine Corps Medical Component


Unified Medical Command


Joint Regional OfficesJoint Regional Offices

Army Medical ComponentArmy Medical Component

Navy Medical ComponentNavy Medical Component

Deployable CapabilitiesDeployable Capabilities

Joint Regional Commands


Army Medical ForcesArmy Medical Forces

Operational Medical Command


Air Force Medical ForcesAir Force Medical Forces

Air Force Medical Component


Secretary of DefenseSecretary of Defense

Modernization CommandModernization Command

Under Secretary of Defense for Personnel

and Readiness

Under Secretary of Defense for Personnel

and Readiness

Assistant Secretary of Defense (Health Affairs)


Navy Medical ForcesNavy Medical Forces

Marine Corps Medical Forces


Although this proposed MHS structure was not implemented, it does validate the concept that the “benefits mission” (circled in red above) can be separated from the readiness mission of the MHS. For the purposes of this briefing, any proposed single DoD/VA governance structure involves merging only the benefits mission of the Military Healthcare System (MHS) with the Veterans Health Administration (VHA).

Although this proposed MHS structure was not implemented, it does validate the concept that the “benefits mission” (circled in red above) can be separated from the readiness mission of the MHS. For the purposes of this briefing, any proposed single DoD/VA governance structure involves merging only the benefits mission of the Military Healthcare System (MHS) with the Veterans Health Administration (VHA).

In an April 2006 response to Presidential Budget Decision (PBD) 753, the Under Secretary of Defense (Personnel and Readiness) proposed a MHS structure with a “Unified Medical Command” and a separate “Healthcare Command.”

In an April 2006 response to Presidential Budget Decision (PBD) 753, the Under Secretary of Defense (Personnel and Readiness) proposed a MHS structure with a “Unified Medical Command” and a separate “Healthcare Command.”

Background

• DoD and VA - two huge healthcare systems– Combined budget of $76 billion– 300,000 personnel– 13.5 million beneficiaries– 1,600 locations world-wide– Over 20 years of legislative directives to

increase collaboration• Similar Systems

Similar Systems

Similar requirements = unique opportunity to explore a “seamless” approach to the delivery of health careSimilar requirements = unique opportunity to explore a “seamless” approach to the delivery of health care

Battlefield Domiciliary

VADoD

Healthcare Venues

VADoD

Healthcare Specialties

Acute Care Hospitals&

Medical Centers

Most Healthcare Specialties

A Few Specialties

e.g.,Pediatrics

A Few Specialties

e.g.,Geriatrics

Source: Dr. Jones & Dr. Tibbits Briefing for 18/19 Mar 08 Trip

Why Now?

• OEF/OIF patient population– This has changed the “politics” of the equation

• Estimated cost to deliver DoD and VA health care are becoming unsustainable

• Current approach to improving DoD/VA collaboration is not strategic– Redundant DoD/VA services and programs

OEF/OIF Patient Population

• “As of March 2007, Veterans Health Administration (VHA) coordinated the transfer of over 6,800 severely injured or ill active duty service members and veterans from DoD to the VA.”

Testimony of Dr. Michael J. Kussman, Acting Undersecretary for Health, Department of Veterans Affairs, U.S. House of Representatives, Subcommittee of Oversight and Investigations, March 8, 2007.

• “As of the first half of FY 2007, approximately 263,900 returning veterans have sought care from VA medical centers and clinics.”

Testimony of the Honorable Patrick W. Dunne, Assistant Secretary for Policy and Planning, U.S. Department of Veterans Affairs, U.S. Senate, Committee on Veterans Affairs, October 17, 2007.

• The Congressional Budget Office (CBO) estimates the total cost to provide health care to OEF/OIF veterans with service connected conditions to be between $7 and $9 billion over the next ten years.

DoD Healthcare Costs

($Billions - 2005 constant dollars)

Source: www.defenselink.mil/news/Feb2006/d20060206slides.pdf

TRICARE for L

ife

VA Healthcare Costs

Source: http://www.whitehouse.gov/omb/budget/fy2008/veterans.html

Other VA Benefit Programs

DoD/VA Collaboration

• Lots of help and tremendous effort…– Multiple DoD/VA Executive Councils,

Coordination Offices, and Working Groups – Multiple site visits and formal studies to

improve collaboration– Hundreds of National and Local Sharing

Agreements

…but are these permanent and temporary organizations really necessary? Is there a better way? …but are these permanent and temporary organizations really necessary? Is there a better way?

Joint Committees

SECRETARY DEPARTMENT OF VETERANS AFFAIRS (VA)

SECRETARY DEPARTMENT OF DEFENSE (DoD)

VA/DoD JOINT EXECUTIVE COUNCIL (JEC)

Joint Strategic Planning Committee (JSPC)

Construction Planning Committee (CPC)

VA/DoD BENEFITS EXECUTIVE COUNCIL (BEC)

VA/DoD HEALTH EXECUTIVE COUNCIL(HEC)

Contingency Response Working Group

Deployment Health Working GroupBenefits Delivery at Discharge Working Group

Graduate Medical Education Working Group

Information Management Information Technology Working Group

Joint Facility Utilization and Resource Sharing Working Group

Acquisition & Medical Materiel Management Working Group

Patient Safety Working Group

Pharmacy Working Group

Information SharingInformation Technology

Working Group

Benefits & Services Working Group

Medical Records Working Group

Coordinated Transition Working Group*

Continuing Education & Training Working Group

Mental Health Working Group

Evidence-Based Clinical Practice Guidelines Working Group

Financial Management Working Group

Joint Health Care Facility Operations Steering Group (JFSG)

Communications Working Group

Are there too many DoD/VA Working Groups and Executive Councils to remain effective? Is this strategic?Are there too many DoD/VA Working Groups and Executive Councils to remain effective? Is this strategic?

Senior Oversight Committee

Overarching Integrated Product Team

(OIPT)

Full-time staff and VA Detail

Incoming from other

commissions

Press Releases

Congress &Media

Senior Oversight Committee (SOC)Co-Chairs:

DEPSECDEF and DEPSECVA

1 2 3 5 6 7 84DoD/ VA Data

SharingTraumatic Brain Injury / PTSD

Case Management

Facilities

Clean Sheet

Legislation & Public Affairs

Personnel/ Pay Support

Disability System

Lines of Action (LOAs)

Again, more teams, groups, and action offices…when will there be enough?Again, more teams, groups, and action offices…when will there be enough?

Resource Sharing Agreements

• Three types of sharing: National Initiatives, Joint Venture, and Local Sharing Agreements

“In FY 2007, 100 VA Medical Centers were involved in

direct sharing agreements with 124 DoD medical facilities for a total of 280 direct sharing agreements that covered 148 unique services.”

Separating the sub-agreement from the 280 master agreement results in a total of 613 active sharing agreements. This seems impressive, but how do we know the true value-added? How have they improved healthcare?

Separating the sub-agreement from the 280 master agreement results in a total of 613 active sharing agreements. This seems impressive, but how do we know the true value-added? How have they improved healthcare?

Source: VA/DoD Joint Executive Council FY 2007 Annual Report

Agreements by Unique

Large number of agreements but what is the real value added?Large number of agreements but what is the real value added?

Agreements by Service

Examples of Service Branch Category “noise” potentially inflating the true value added

Examples of Service Branch Category “noise” potentially inflating the true value added

2007 Sharing Agreements

3 5

28

108

138

28

37 37

15

510

3430

26

42 43

14 15

69

9

53

6

0

20

40

60

80

100

120

0 1 2 3 4 5 6 7 8 9 10 11 12 15 16 17 18 19 20 21 22 23 25

Veterans Integrated Service Network (VISN)

Nu

mb

er o

f A

gre

emen

ts

Agreements by VISN

85 Agreements with NY Army NG85 Agreements with NY Army NG

Reimbursement

Large variation between Fee and CMAC early in the sharing programLarge variation between Fee and CMAC early in the sharing program

Provider

VA is the “provider” of the service in over 70% of the agreements…understandable because the VA is bigger…

VA is the “provider” of the service in over 70% of the agreements…understandable because the VA is bigger…

New Agreements by Year

The number of new agreements may not be a good indicator of the level of effort…

The number of new agreements may not be a good indicator of the level of effort…

Challenges and Concerns

• Single Governance Challenges:– Cabinet-level departments– Very politically sensitive – Two well established healthcare systems– Requires DoD to create some form of an Unified Medical

Command

• VA and DoD Concerns:– VA’s concern is an unified system will “squeeze out” the veteran– DoD’s concerns are inability to separate the TRICARE mission

and lack of direct control will negatively affect readiness

• Fear of Change

Fear of Change

• DoD experienced beneficiary “fear of change” when they excluded MEDICARE eligible beneficiaries

– Resulted in TRICARE for Life (TFL) Program

• Veteran’s advocacy groups fear any merger will “squeeze them out” of guaranteed access

– Reasonable to predict that merger will improve access for all beneficiary populations

Manage Beneficiary Care

TRICARE


TRICARE

Deploy a Healthy Force

9

Patient Care, Sustain Skillsand Training

Promote & Protect Health of the Force

Deploy toSupport the Combatant

Commanders

to and


TRICARE


Deploy Medical Support

The MHS Mission


TRICARE


TRICARE



TRICARE


Deploy Medical Support

The “New” MHS Mission - Focused on the Deployable Mission

...can we remove the benefits mission (i.e. TRICARE) from DoD’s responsibility without negatively affecting readiness?...can we remove the benefits mission (i.e. TRICARE) from DoD’s responsibility without negatively affecting readiness?

Close to Single Governance

North Chicago VAMC – Great Lakes Naval Health Clinic

Clear chain of command? This “hybrid” shows the limitations and restrictions of current DoD/VA collaboration public law.

Clear chain of command? This “hybrid” shows the limitations and restrictions of current DoD/VA collaboration public law.

Courses of Action

• COA 1: Form a Federal Military Health Command by merging the brick and mortar assets of the MHS and the VHA under the direction of DoD

• COA 2: Form a Federal Military Health Command by merging the brick and mortar assets of the MHS and the VHA under the direction of the VA

• COA 3: Form a Federal Health Command by merging the brick and mortar assets of the MHS and the VHA under the direction of the HHS

Screen/Evaluation Criteria

• Criteria for a System Merger– DoD Screening Criteria - Military readiness– VA Screening Criteria - Protect the benefit– Unity of effort – Improved Responsiveness– Reduce redundancies– Cost savings– Viability - Ease of implementation– Ability to concentrate on core mission– Number of Departments involved

• Criteria for a Well-Functioning System – Capacity to Innovate and Improve – Equity – Efficiency – Access – Quality – Long, Healthy, and Productive Lives

Source: Commonwealth Fund Commission Key Indicators for Measuring Performance

System Evaluation Criteria

COA 1: Combine under DoD Leadership

Federal Military Healthcare Command



TRICARE/HERO Contracts

DoD Medical Treatment Facilities

and Clinics



Joint Regional Offices

Army Medical Component

Navy Medical Component

Deployable Capabilities


Army Medical Forces


Air Force Medical Forces


Secretary of Defense

Modernization Command

Under Secretary of Defense for Personnel and Readiness


Navy Medical Forces


VA Medical Treatment Facilities

and Clinics

Existing DoD and VA facilities will be combined where possible and grouped geographically using the existing TRO structure

Is running such a large healthcare system a core mission for DoD? Is running such a large healthcare system a core mission for DoD?

Federal Military Healthcare

Administration







and Clinics














Army Medical ForcesArmy Medical Forces









Under Secretary of Defense for Personnel and

Readiness

Under Secretary of Defense for Personnel and

Readiness



Navy Medical ForcesNavy Medical Forces




and Clinics

Under Secretary for Heath, Veterans Health Administration

Secretary of Veterans Affairs

Deputy Secretary

Existing DoD and VA facilities will be combined where possible and grouped geographically using the existing VISN structure

Secretary of Defense

COA 2: Combine under VA Leadership

RecommendedRunning a healthcare system is the core mission for VHA Running a healthcare system is the core mission for VHA

COA 2 Includes a “Don’t Sell the Farm” Clause

Large Medical Facilities run by the VHA but with a heavy military presence. These facilities would serve as military casualty reception Centers of Excellence.

COA 3: Combine under HHS Leadership

Assistant Secretary for Health, HHS

Assistant Secretary for Health, HHS

National Coordinator for Health

Information Technology

National Coordinator for Health

Information Technology

Director, Office of Global Health Affairs

Director, Office of Global Health Affairs




and Clinics


and Clinics

Director, Indian Health Service (HIS)

Director, Indian Health Service (HIS)



Assistant Secretary for Preparedness

and Response

Assistant Secretary for Preparedness

and Response

Director, Agency for Healthcare Research

and Quality

Director, Agency for Healthcare Research

and Quality

Commissioner, Food and Drug

Administration (FDA)

Commissioner, Food and Drug

Administration (FDA)

Director, National Institutes of Health

(NIH)

Director, National Institutes of Health

(NIH)

Assistant Secretary for Resources &

Technology

Assistant Secretary for Resources &

Technology

Secretary of Health and Human Services

Secretary of Health and Human Services

Director Centers for Disease Control and

Prevention (CDC)

Director Centers for Disease Control and

Prevention (CDC)

Deputy SecretaryDeputy Secretary

Chief of StaffChief of Staff

Administrator, Centers for Medicare

& Medicaid

Administrator, Centers for Medicare

& Medicaid

USPHS PersonnelUSPHS Personnel

Director, Federal Military Healthcare

System

Director, Federal Military Healthcare

System


and Clinics


and Clinics

Existing DoD, VA, and HHS facilities and personnel will be combined where possible and geographically grouped using the existing HHS system of ten regional offices.

Most Innovative

This option creates the most “synergy” among federal healthcare entities. This option creates the most “synergy” among federal healthcare entities.

COA Comparisons

Unity of effort

Reduce redundancies

Cost savings

Viability - Ease of implementation

Ability to concentrate on core mission

Number of Departments involved

Capacity to Innovate and Improve

Long, Healthy, and Productive Lives

Operational Experience Running a

Large Healthcare System

COA 1 DoD

COA 2 VA

COA 3 HHSHybrid of Criteria

Recommended

Recommended Option COA 2 Phased Implementation

• Phase Zero – Get senior DoD, VA, Legislative leaderships’ buy-in. Contract or have an independent governmental agency (i.e. CBO, GAO) conduct a detailed analysis of the financial and organizational implications of the recommended COA. This study would be very similar to the Center for Naval Analysis (CNA) study on the cost implications of a Unified Medical Command conducted in May 2006. Focus on resolving the issues identified executing the single VA/DoD governance structure at the North Chicago VAMC/Great Lakes Naval Clinic location.

• Phase One – Determine the DoD/VA system requirements and conduct “Best of Breed” competitions among administrative, managed care, logistics, and HER systems. Begin complete merger of selected clinical programs (i.e. PM&R, Behavioral Health).

• Phase Two - Merge leadership at the current Joint Venture locations or other “North Chicago-like” locations. Retain or create a position for a DoD “Deputy Commander/Associate Director for Military Readiness.”

• Phase Three - Merge VHA and MHS senior leadership.

Issues to be Resolved

• Requires DoD to create a Unified Medical Command

• Merging VA/DoD beneficiary priorities will be difficult…who gets the one open appointment?

• The “best of breed” competitions among DoD/VA/HHS for IM/IT, logistics, personnel, and other admin and clinical systems will meet resistance

• Must carve-out funding streams for military medicine

• Active Duty healthcare - DoD must maintain its system of troop medical clinics, shipboard, and flight line medicine

Top Ten Reasons to Execute

1. Provides a definitive answer to Congressional mandates

2. Addresses unsustainable costs of both VA and DoD Healthcare

3. Addresses VA/DoD aging medical infrastructure

4. Enhances care for all veterans - especially OEF/OIF

5. Enhances VA and DoD physician retention

6. Improves Undergraduate and Graduate Medical Education

7. Improves ability to respond to a national emergency

8. Allows both Departments to focus on their “core” mission

9. Prevents future redundancies - How many more AHLTA and VISTa will there be?

10. Establishes the framework for a National Healthcare System

Synergy

Imagine how the ability to respond to national emergencies and the ability to gather medical surveillance data will be improved if all these Federal medical facilities were electronically connected using the same IM/IT system.

Imagine how the ability to respond to national emergencies and the ability to gather medical surveillance data will be improved if all these Federal medical facilities were electronically connected using the same IM/IT system.

Even if it is just DoD and VA healthcare facilities in the same system…could be the basis for a national healthcare system

Even if it is just DoD and VA healthcare facilities in the same system…could be the basis for a national healthcare system

Conclusion

• “Heretics Are Not All Bad!”

• We are at a “tipping point” for change

• Any DoD/VA single governance structure must be directed from a national authority

• The VA running the merged Federal Health System is the most viable and is recommended

• Incorporating other assets from the HHS can be explored later

Merging the Military Health System and the Veterans Health Administration

Health & Medicine

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