The New Doctor Is In

Jan. 1, 1999

Many American military personnel are nostalgic for the way their health care used to be delivered, admits the Pentagon’s top doctor. They remember the halcyon days of easy access to base hospitals and clinics. Paperwork was minimal, at least compared to today.

Despite pleasant memories, argues Dr. Sue Bailey, today’s Department of Defense medicine is not worse than it was in those good old days. Bailey, assistant secretary of defense for health affairs, noted that today’s military health network includes disease prevention services, a wide choice of health plans, and access to specialists and techniques undreamed of only a few years ago.

“So I think in fact our system is better,” said Bailey, who was sworn in at her current position June 17. “In many ways, it is better than it was before.”

In many ways, the job of top DoD health official is one of the most difficult management posts in the Pentagon, if not the whole US government. That is because health care in general and military health care in particular are at a crossroads. None of the pathways lead outward to a certain future.

The population served by military health services is becoming markedly older, as is the nation’s general population. At the same time, the rush of technological development is creating exciting–and expensive–new health care equipment and treatments.

Costs are exploding, with the money the US spends on health care predicted to double in the next decade. Beneficiaries have both greater expectations for and more knowledge about their problems and care.

Given all these forces, the Defense Department is having to restructure its health care system, just as the general US health care system is struggling to adapt to the new realities. Both systems are moving in the direction of much greater reliance on managed care.

“How do we meet our readiness mission and still provide the same quality peacetime health care we’ve always provided?” asked Bailey.


The military is probably ahead of the civilian world in terms of its adaptation to the new forces. DoD also provides more health care choices than many civilian employers, insists Bailey.

The majority of Americans now receive their health care through their private sector job, and many of them have a choice of only a basic Health Maintenance Organization or a Preferred Provider Organization, which offers somewhat more flexibility in choosing doctors in exchange for somewhat higher cost-sharing and fees.

The Defense Department, by contrast, offers Tricare Prime, the HMO-like option; Tricare Extra, a PPO plan; and Tricare Standard, a fee-for-service option that costs enrollees more and is similar to the old-style, choose-any-doctor-you-want system.

“There is less choice in some parts of the private sector than there is in our system,” said Bailey. “In the military, you may say you want to go to Johns Hopkins [University medical facilities] because there is a particular specialist there whom you think may be beneficial for your child, and we want to assure that that kind of access continues.”

Bailey is a Navy veteran whose active duty assignments included stints at the National Naval Medical Center, Bethesda, Md., and Philadelphia Naval Hospital. She rose to the rank of lieutenant commander in the Navy Reserve prior to her being appointed as deputy assistant secretary of defense for health affairs (clinical services), a post she filled from 1994 to 1995. A board-certified psychiatrist, she also served as the spokesperson for the President’s health care reform campaign in 1993.

The previous assistant secretary for health affairs, Dr. Stephen C. Joseph, left the Pentagon job in early 1997. Thus, DoD’s top health post had been officially vacant for more than a year prior to Bailey’s spring Senate confirmation.

As to her priorities, Bailey said that her primary responsibility is to active duty forces and their families. Among other things, that means urging health protection for troops via such procedures as vaccinations against anthrax and wellness programs urging proper diet and exercise.

Bailey added that, secondarily, she is “very in tune to our retiree population” and the problem of providing health care services to Medicare-eligible military retirees. DoD has several programs under way to explore innovative means of delivering and financing health care options for older retirees.

“I’m pleased with the demonstration projects that are under way that allow us to explore our options to continue to provide care for them,” she said.

Thirdly, there is the continuing challenge of Tricare. The final contracts providing for a complete nationwide system had just been completed when Bailey assumed her current job. One of her focuses, she said, will be to stabilize the current Tricare system, to simplify it so it is more easily understood, and to satisfy Tricare customers.

“Wonderful” Health Care

“Tricare, by the way, is a new name for the same military health care

system that we’ve all known,” said Bailey. “Yes, it’s been reorganized, but we are still treating the entire military family with wonderful health care that is delivered in many ways … and on bases and on posts around the country and the world.”

The need for stabilization applies not to the health care itself but to the business practices of some of the contractors who provide the care in regions around the US, according to Bailey. Answering phones, making appointments, delivering bills, and other administrative aspects of Tricare have been problematic in many places.

“We find that in our mature regions on the West Coast-California, Oregon, Washington–with systems that have been in place for a while, we work out those initial bugs and people are very pleased with the Tricare system,” she said.

This does not mean that the military will just wait for the other regions to pass beyond the stage of growing pains. According to Bailey, it means picking lessons learned and applying them to the regions that have just started up.

Some of stabilization is as simple as hiring the right number of employees to answer phones in a reasonable period of time, she said.

“We’ve found that assuring [patients] have access to urgent care within a day, routine care within a week, and special referral care within a month, has worked remarkably well and that we’ve been able to meet those standards,” said Bailey.

The need for Tricare simplification, meanwhile, stems from the fact that many military personnel do not understand their benefits and options. Bailey maintains that this is not a problem limited to just the military’s managed care health plan.

“If you read the fine print of almost any health care plan, it is incredibly confusing and not user friendly,” said the Pentagon’s top doc.

Many Tricare beneficiaries probably do not have even a basic understanding of the difference in the plan’s three levels–HMO, PPO, and fee-for-service.

“The more that we can help people understand our program, the better choices they will make,” said Bailey.

In bygone days, providing health care for retirees age 65 and older did not strain the military system. There were plenty of space-available slots at base hospitals and clinics and lots more bases, period. Doctors could easily squeeze Medicare-eligible retirees in amongst their other patients.

Anxious, Resentful

Those days are long gone. Sharply reduced numbers of both military medical facilities and providers have left many of the nation’s military retirees anxious about their future and resentful about the nation’s reneging on a promise of lifetime medical care to those who spent a full career in uniform.

In response to their concerns, Congress has authorized the Pentagon to oversee several tests of ways of bolstering care for the retirees 65 and over. Tricare Senior Prime is a demonstration program that will allow enrollees to use Medicare to pay for treatment at military facilities. FEHBP-65 will explore opening the Federal Employees Health Benefits Program to these older retirees.

“I am looking to all the demonstration projects to glean information about the best way to provide health care for those who are over 65,” said Bailey.

Senior Prime is already up and running. The first site to begin operations, Madigan Army Medical Center, Ft. Lewis, Wash., began providing health care under the plan on Sept. 1, 1998. Five other sites, some with more than one facility participating, will follow. The demonstration runs through Dec. 31, 2000.

Bailey cut the ribbon opening Senior Prime–also known as “Medicare Subvention”–at Madigan. She said it was an exciting day. “People were clearly ready for the program to begin,” she said.

Earlier this year Bailey won plaudits from retiree groups by quickly changing some of the co-payment rules of Senior Prime. Initial plans called for Tricare Senior enrollees to pay steep co-payments if they needed skilled nursing care for more than 20 days or if they needed durable medical equipment such as dialysis machines.

Whether the prospective costs were at first hidden or not is still debatable. In any case, Bailey quickly ordered the nursing care co-pay decision reversed, as it represented the largest potential financial strain.

“One of the highlights of a job like this is to be able to listen to an advocacy group, hear a problem, see a solution, and implement it,” she said.

It is difficult to compare Tricare Senior co-payments with those that face retirees in the civilian world.

In general, concludes an analysis provided by Bailey’s staff, “We anticipate that out-of-pocket costs for enrollees in Tricare Prime will be dramatically lower than in fee-for-service Medicare and considerably lower than in most Medicare HMOs.”

In years past, Pentagon officials have been less welcoming of the concept of opening the generous Federal Employees Health Benefits Program to military retirees age 65 and over. It is true, they have said, that FEHBP-65 could bolster the health care of those retirees who live far from any defense health installation, but the system is expensive, to both enrollees and the government.

FEHBP “Possible”

Congress finally approved a modest FEHBP experiment last year. Bailey said she is reserving judgment about this option until she sees what information comes from it. “It’s possible,” she said, that an FEHBP plan could fit in with the military’s approach to its older retirees’ health care.

Still, “I think that we’re going to find that Tricare Senior, in terms of our retiree health care needs, will probably provide us with the best answer that will be most affordable,” she said.

The Pentagon is running yet another test that is looking at ways to expand space-available slots at military hospitals. This demonstration, at MacDill AFB, Fla., addresses the fact that many retirees generally want to come back to military treatment facilities, according to Bailey.

Some military facilities have already been successful at finding ways to squeeze in more openings for retirees. Bailey said she was fascinated by a trip to NAS Jacksonville, Fla., where officials told her they were “overwhelmingly able to provide space-available care” for the area’s large retiree population, even while continuing to meet their primary mission of peacetime health care delivery to active duty folks.

Jacksonville’s techniques included everything from expanded hours to new ways of parceling out physician services.

“That’s what we’re looking at the MacDill test for,” said the Pentagon’s health chief. “Let’s try to understand what those variables are, what is different about any place that is able to do that.”

As to prevention, Bailey said she is very interested in making it a real part of military medicine. She specifically cites the example of the Air Force for already having moved in this direction, emphasizing changes in diet, exercise, and management of stress.

Simply convincing more people to stop smoking and reduce drinking of alcohol could save the Pentagon big dollars and head off untold personal suffering. In 1996, the Department of Defense paid $2.9 billion on the direct and indirect costs of tobacco and alcohol-related health problems, Bailey said.

By spring, all military health care facilities will be surveying patients to understand each person’s health history, lifestyle behaviors, and risk factors.

“There is so much that people can do about their activities of daily living … that is so important to their health and longevity,” said Bailey.

The Pentagon-wide move to vaccinate personnel against the biological warfare agent anthrax is another prevention effort.

The first phase of the anthrax program focuses on immunizing forces that have been or will soon be deployed to the high-threat areas of Korea and Southwest Asia. Phase two will focus on units that would be planned as early deployers in the event of conflict in those areas. The final phase, scheduled to begin in 2003, will include the remainder of the force.

Well over 50,000 people have now begun the multishot immunization process. Bailey herself has had three of the basic six shots already.

There have been a few high-profile cases of personnel refusing the shots on grounds that the immunization itself could pose a danger. In fact, adverse reactions numbered only 10 through mid-October, according to Bailey.

“It’s proceeding very, very smoothly so far,” she said.

The Pentagon’s top health official recalled that, not long into her tenure, she traveled to Germany and met with Air Force and Army medical teams that cared for people injured in the twin bombings of US embassies in Africa in August. These teams, from the people who flew the airplanes, to those who worked on patients en route, to those who manned the intensive care units back in Europe, should be a source of pride for Americans, said Bailey.

“I want to commend the Air Force and all the services that took part,” she said. “It was military medicine at its very best. When you see an American team in uniform carrying the gurney, you know that patient is in good hands.”

Another View of Tricare

The following letter was written by Brig. Gen. Thomas E. Carpenter III, USA (Ret.), following a particularly annoying encounter with the Tricare system.

July 26, 1998

Health Benefits Advisor

US Army Medical Department Activity

West Point, NY 10996-1197

Thank you for your letter of March 13th in response to my letter of Feb. 8, 1998, regarding my CHAMPUS and Tricare situation. I also appreciate your call back to help clarify a number of points regarding CHAMPUS and Tricare services for military retirees. …

Here is my understanding of the medical benefit available to my wife and me:

1. Because a corner of the zip code in which we live (06880) is within 50 miles, as the crow flies, of West Point, a Non-Availability Statement is required, even though we are 90 road miles and 80 minutes away from West Point. …

2. Since my wife and I are enrolled in the Defense Enrollment Eligibility Reporting System, I understand that I can get an NAS by a telephone discussion with you regarding the type of treatment required.

3. However, even if I did not need an NAS based on the distance criterion, in effect, I would be required to get one, as a condition of CHAMPUS and/or Tricare Standard coverage, because:

a. The NAS is valid for only 30 days.

b. The 14 outpatient procedures on pages 81 and 82 of the Tricare Standard Handbook, dated September 1997, the advance authorization requirement for the three procedures on p. 83, and all elective inpatient care require an NAS.

c. Each time I call West Point, a “determination of the moment” will be made as to whether medical services are available there and, if that is the determination, I would be required to use those services, even though we are 90 miles away.

d. You strongly advise me to call each and every time we need medical services because the foregoing list of procedures is a dynamic one and the government will deny coverage if a change has been made to the procedure list unbeknownst to me or the provider.

4. While your letter indicates that the requirement for the provider to submit claims was rescinded after only one year, that change is, in reality, not a major one as regards Tricare because:

a. Providers under Tricare Prime and Extra still must file claims.

b. Under Tricare Standard, the provider decides, on a case-by-case basis, whether he or the patient must file claims.

5. Here is the provider situation for me in Westport, Conn., and surrounding areas, based on the “Health Care Finder List,” dated January 1998, provided to me by CHAMPUS:

• 910 doctors of all types and locations (some a full day’s drive away) are on the list.

  • • 12 doctors have offices within 45 minutes of my home (Westport, Southport, and Fairfield). Of these 12:

    ­ – One of the 669 doctors who practice medicine in Westport is listed, but he is a dermatologist.

    ­ – One is a pediatrician (we have no dependent children).

    ­ – Six are in OB/GYN.

    ­ – Three are in family medicine.

    ­ – One is in internal medicine.

  • • Of the three in family medicine:

    –Two are not accepting new patients.

    –One has moved and is no longer accepting CHAMPUS.

  • • The one in internal medicine … moved about 12 months ago and left no forwarding address. …

    In any case, even if a current and accurate list of providers were made available, it would be of limited value, since the Tricare Standard Handbook advises on p. 91 that doctors “participate on a case-by-case basis. That is, they may participate one time, and not the next time.”

    6. Of the several doctors I know personally in this area, none will agree to participate in CHAMPUS because, in their view, the government has imposed cumbersome and burdensome procedures that are unacceptable to them.

    7. Tricare is, in your words, “scheduled” for implementation in our region on June 1, 1998, after previously announced implementation dates of Oct. 1, 1997, Jan. 1, 1998, and April 1, 1998 have been delayed.

    I conclude from the foregoing that, as a military retiree, my wife and I are effectively without government-sponsored medical care in any form until we reach age 65. This letter may help explain why so many military retirees feel that the government they have served faithfully over the years has broken faith with them.

  • Peter Grier, the Washington bureau chief of the Christian Science Monitor, is a longtime defense correspondent and regular contributor to Air Force Magazine. His most recent article, “Readiness on the Line,” appeared in the December 1998 issue.