With concerns about the quality and rising costs of military health care, the non-partisan Congressional Budget Office (CBO) is offering several alternatives that could fix the system.
In a report issued this month, CBO released its findings after a top-to-bottom review of military health care. Below are the proposed solutions. CBO did not provide cost estimates for the first three.
* Focus the direct-care system on operational readiness. This would amount to a change in focus among military treatment facilities (MTFs) toward care for active-duty service members, and training clinicians and other providers for that task. Care for families and other beneficiaries would be outsourced to private providers.
* Pay fixed amounts per person to Tricare contractors. This would give contractors greater latitude in setting up networks, reimbursing providers, and setting costs for patients. For this plan to generate savings, “MTFs would probably have to be restructured or closed,” CBO stated. “Patients would probably need to pay a larger share of their costs.”
* Change the way the services pay for care at military treatment facilities. This would involve one of two possibilities. One would be to pay a fixed amount to an MTF per beneficiary. The other would entail setting up an internal pricing mechanism known as a working capital fund. Military services, which generally manage their own health-care systems anyway, would use the fund to purchase care for beneficiaries at MTFs. The idea is to draw a more clear distinction between health care costs and so-called ancillary activities — training, veterinary services and operational expense, for example.
* Increase cost sharing for most Tricare beneficiaries. The existing system would remain intact, with both MTFs and Tricare providers giving care to beneficiaries. However, out-of-pocket expenses would rise for active-duty members who want coverage for their families, and retirees who are not yet eligible for Medicare. Costs would go down, presumably, because beneficiaries would use fewer services. As such, this plan would affect demand for rather than supply of health care services.
* Offer most beneficiaries with a choice of commercial insurance providers, instead of Tricare. This option would follow suggestions put forth by the Military Compensation and Retirement Modernization Commission. If adopted, it would incorporate MTFs as one provider among a network of commercial insurers. Military families would receive new cash allowances to use for health care, while retirees still young enough to work would see their coverage costs rise.