Healthcare Business News

GAO notes Defense Dept.'s lack of progress on health-cost initiatives

By Jessica Zigmond
Posted: April 14, 2012 - 12:01 am ET

Of the 11 goals the U.S. Defense Department has identified to slow its rising healthcare costs, the department has made progress in just one area, the Government Accountability Office concluded in a new report (PDF).

The department's healthcare costs have risen significantly in the past decade—to a budget request of $48.7 billion in fiscal 2013 from $19 billion in 2001—and are expected to increase to $92 billion by 2030.

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But while the Senior Military Medical Advisory Council, an executive-level discussion and advisory group, approved 11 initiatives to help reduce costs, the department by mid-January 2012 had completed and approved a specific implementation plan only on a strategy to establish a patient-centered medical home model of care. That objective also came with an estimated cost savings of $39.3 million through fiscal 2016.

Other initiatives include integrating psychological health programs to improve outcomes; implementing alternative payment mechanisms to reward value in healthcare services; improving both the measurement and management of the department’s population health by focusing on prevention and wellness; and implementing modernized electronic health records.

Meanwhile, the GAO found that the department has implemented some of the objectives the department established in 2006 to change elements of its medical governance structure. But it has not “consistently employed several key management practices that would have helped it achieve its stated goals and sustain its efforts,” the study noted.

The GAO recommends the department complete and fully implement plans for all of its initiatives; establish a monitoring process to assess those goals and identify accountable officials and their roles and responsibilities; and complete the governance initiatives the department has already started to implement.

“In written comments on a draft of this report, DOD concurred with each of these three recommendations,” the report said.

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