"I am struggling to not increase costs to the beneficiary above what they are today," said Dr. Sue Bailey, new Assistant Secretary of Defense for Health Affairs. "Note the word 'struggle,' though," she added.
Bailey, a doctor of osteopathic medicine, became the Pentagon's top health official on 17 June. In an interview, she was asked about the Defense Department's decision, made only weeks before her swearing in, to request authority from Congress to impose co-payments on users of base pharmacies.
"I'm not saying we may not have to do [co-pays] at some point," said Bailey. "Costs go up; we have new drugs we want to make available, and it may be that the only way to provide that is to require [patients] to share in the cost."
But Bailey promised not to push for co-payments without first trying to control pharmacy costs in other ways, such as joint drug purchases with the Department of Veterans Affairs.
A former Naval Reserve lieutenant commander, Bailey entered service during medical school. In 1990-91, she was a general medical officer at Bethesda Naval Medical Center, Maryland. She holds degrees from University of Maryland and the Philadelphia College of Osteopathic Medicine.
Bailey said she feels "a tremendous responsibility" to retirees and "will do everything in my power to assure [them] as much health care delivery as is possible in our system."
During a recent visit to the naval hospital in Jacksonville, Florida, Bailey said she was told they "never turned anybody away over 65." That's not what elderly experience at a growing number of service hospitals where space-available care has declined sharply with the transition to managed care.
But Bailey said the Jacksonville experience left her hopeful such success might be duplicated across the services, perhaps by shifting resources to areas where demands from the retiree population are high. Bailey also said she was "open-minded" to legislation that—on a test basis—would give older military beneficiaries access to the Federal Employees Health Benefit Plan for federal civilians. Defense health officials before Bailey strongly opposed such a move.
Bailey was spokesperson for the Clinton's health reform initiative in 1993 and served as deputy co-chair of the 1996 Clinton-Gore reelection campaign. Between those political assignments, from 1994 to 1995, she served as Deputy Assistant Secretary of Defense for Clinical Services.
Quick Reversal: Bailey scored points with military retiree groups in early August by ordering a swift change to co-payment rules under TRICARE Senior Prime. The long-awaited demonstration to establish Medicare HMOs in military hospitals and restore access to care for the elderly came under sharp attack in late July from service associations that helped bring it to life. The focus of their ire was unexpected co-payments that TRICARE Senior enrollees face if they need skilled nursing care for more than 20 days or durable medical equipment like wheelchairs or dialysis machines.
Service associations warned the co-payments, particularly those for skilled nursing care, would result in hundreds or thousands of dollars in out-of-pocket costs for some elderly. They said not only were the charges not levied by most other Medicare HMOs, they were not disclosed during earlier briefings on TRICARE Senior by Pentagon health officials.
"For months we've been telling our folks `You won't need supplemental insurance' with Medicare subvention," said Paul Arcari, government relations director for The Retired Officers Association (TROA). Now enrollees not only need supplemental insurance, he said in late July, but "they're going to say the people trying to correct this health care breach of faith are once more breaking faith."
A senior TRICARE official argued the co-payments were not hidden but appeared in "a large attachment" to an agreement signed in February between the Defense Department and the Health Care Financing Administration, which manages Medicare. "There has been absolutely no effort on the department's part not to make this [information] as widely available as possible," he said.
But association leaders, who worked shoulder-to-shoulder with Defense in convincing Congress to approve a Medicare subvention test, felt they had been duped—and said so.
"They can blame us for not reading the fine print if they want to," said Chuck Partridge, interim president of the National Association for Uniformed Services. "But they knew damn well if they brought it up, we'd argue about it."
About 27,000 beneficiaries age 65 and older will be allowed to enroll in TRICARE Senior, the Medicare subvention test, across ten sites. Enrollment began 15 July at the first site, Madigan Army Medical Center, Fort Lewis, Washington.
Most Medicare HMOs provide 100% coverage for durable medical equipment; under TRICARE Senior, patients will pay 20% of the cost. Most Medicare HMOs also cover the full cost of skilled nursing care for up to 100 days. TRICARE Senior planned to charge patients $95 per day after the first 20 days, the same formula used under basic Medicare.
Dr. Bailey met with representatives of retiree groups on 31 July. A few days later she waived the skilled nursing care co-pays, saying the move "will go far in reducing the out-of-pocket costs for [TRICARE Senior] beneficiaries." She encouraged association support for TRICARE Senior, which had deteriorated, and reassured these groups she is committed to expanding access to care for the elderly.
"Dr. Bailey put a capital 'P' back into people-oriented leadership," said TROA's Paul Arcari.