Defense Secretary Donald Rumsfeld and his senior staff have rejected a push by the Joint Chiefs to create a joint medical command or some other military-led entity to control what uniformed leaders worry are runaway TriCare costs.
Not only did Secretary Rumsfeld and staff reject the notion of greater military control of healthcare resources, but they also plan to dissolve the advisory panel that backed the idea, the twoyear-old Defense Medical Oversight Council (DMOC), sources said.
Whether it was weak civilian leadership, hidden medical costs, or some other conditions that led to formation of DMOC, those conditions no longer exist, Secretary Rumsfeld's staff has suggested. DMOC no longer will be the dominant voice in Pentagon debates over the future of military medicine.
Cochaired by one of the services' vice chiefs on a rotating basis, and supported administratively by the Joint Staff, DMOC has been a powerful tool of the Joint Chiefs of Staff in driving medical reforms since 1999. Under the auspices of Rudy de Leon, former Under Secretary of Defense for Personnel and Readiness, DMOC pressed the office of the Assistant Secretary of Defense for Health Affairs to accelerate TriCare reforms for patients and providers alike, and to document chronic underfunding of military medical budgets during the Clinton administration.
DMOC, with de Leon as its other cochair, also educated senior line officers—the war fighters—on the importance of health care for troop morale and readiness and on factors driving up costs, including waves of new drugs and critical medical technologies.
But even as TriCare services improve, the Joint Chiefs and the military surgeons general, who oversee military medical staffs and facilities, have become increasingly alarmed and frustrated by the rising cost of TriCare support contracts, which, in turn, squeeze dollars available for the direct-care system.
Most informed observers blame the sharp rise in contractor costs to poor fiscal management during the Clinton era. Year after year, military clinics and hospitals were left short of funds, forcing patients to use far more costly TriCare provider networks. Major General Paul K. Carlton, Surgeon General of the Air Force, calls it a medical budget "death spiral."
In a blunt memo to Secretary Rumsfeld in April 2001, Army General Henry "Hugh" Shelton, Chairman of the Joint Chiefs, warned that a "critical fiscal situation" for military health care "is exacerbated by a diluted organizational structure" struggling to provide "essential medical benefits to dependents and retirees while ensuring the availability of contingency medical capabilities for our active duty troops."
General Shelton credited DMOC with stopping "a potentially disastrous multibillion dollar contract" that TriCare had negotiated with companies running its civilian provider networks. He urged Secretary Rumsfeld to consider DMOC recommendations for improving the contracts and reorganizing the healthcare system.
Whether Secretary Rumsfeld ever sat for a brief on the DMOC recommendations is unclear. But the recommendations angered some senior defense officials who, in recent weeks, decided "the line" was seeking too prominent a role in managing military medicine. Some criticized DMOC for faulty logic in trying to reorganize TriCare out of a money problem.
In a 28 June interview, Dr. David Chu, the new Under Secretary of Defense for Personnel and Readiness, avoided discussing DMOC and reports that it has held its last meeting. He only praised DMOC's role in sensitizing uniformed leaders to the impact of timely, quality health care on morale and readiness.
Under Secretary Chu did reject the idea of reorganizing military medicine, at least from the top down.
"It's a little early for the administration to decide exactly what the governance of this system needs to be. . . . It may be different, I acknowledge that," he said. But he leans toward giving regional TriCare managers more control rather than the "Stalinist model [where] we do everything from the center."
As far as controlling future TriCare costs, Under Secretary Chu said the TriCare Management Activity, as established under the office of Assistant Secretary of Defense for Health Affairs, already has that authority and it has been clarified through a newly signed directive.
"I'm looking to them to make sure we begin to achieve what Secretary Rumsfeld has set as the goal here: a world-class medical system," Under Secretary Chu said.
But the Joint Chiefs remain concerned that the current organizational structure will not be able to control medical costs, said an official familiar with their views on the issue. They worry that military medicine is "the Pac Man of future defense budgets," swallowing resources of other programs at an alarming pace.
There is "terrible inefficiency," Under Secretary Chu said. "DMOC has been used to provide some level of oversight and efficiency that was lacking. The bottom line is you have this large budget number in medical [$18 billion a year] that is basically managed by a staff, instead of a command, and through three separate services.
"If they are going to get these costs under control, it's not going to happen as the system is organized now," he said.