A new study has added to the controversy surrounding the 10 non-government hospitals that treat military personnel.
At issue are 10 privately owned hospitals known as Uniformed Services Treatment Facilities. A recently released study by the Congressional Budget Office found that in areas where there are a Defense Department hospital and a USTF hospital, the USTF hospital was 4% less costly.
The report is good news for the USTF hospitals, many of which rely on the funds from treating military patients to stay in business. However, it may do little to change the attitude of the Defense Department, which has been critical of the program since Congress passed the law in 1981 allowing the 10 former Public Health Service facilities to begin accepting Defense Department patients.
The hospitals are paid by the Defense Department on a capitated basis even though USTF patients have the option of receiving care at Defense Department facilities. The department has long argued that the nearly $300 million spent on the program each year would be better spent elsewhere.
But advocates of the USTF hospitals, including military beneficiary groups, say the Pentagon is against any program it doesn't completely control.
"It is interesting that of the many military health plans around, the only two that are really up and running, the (Civilian Health and Medical Program of the Uniformed Services reform initiative) in California and Hawaii and the USTF plans, are run by private contractors. There is a lesson in this," said Dorsey Chescavage, senior issue specialist for the National Military Family Association.
Ms. Chescavage also argued that the USTFs are needed because they perform more primary-care functions than military facilities and are often located in areas where there is no Defense Department hospital.
Thomas Schwark, M.D., who is retired from the United States Air Force and is the chairman of the USTF Conference Group, which represents the 10 USTF facilities, said the USTF program "presents a philosophic risk to the (Defense Department).
"They have a real angst about `civilianizing' any of their medical care because they are concerned about war readiness."
The CBO report found that in areas where there was a Defense Department and USTF hospital, it cost an average of $1,850 per beneficiary to provide care for all beneficiaries under age 65 at Defense Department facilities while USTF hospitals cost an average of 4% less. In areas where there was no military facility nearby, the USTF program was an average of 17% more costly.
However, the CBO noted that the lower military cost, $1,600 per beneficiary, resulted not because of the cost of the USTF program but because the inaccessibility of military care made beneficiaries less likely to seek care.
The CBO study was required by the National Defense Authorization Act for fiscal 1994. It was the second report in recent weeks that was supportive of the USTF program.
The General Accounting Office found in a report released earlier this month that "despite the significant number and size of military facilities located nearby two USTFs (in Baltimore and Seattle), more than $20 million in (Defense Department-funded) medical care is provided (by the USTF hospitals), indicating that the military direct-care system is not providing that care, and some portion of it is not available in military facilities."
The two reports followed a study earlier this year by Lewin-VHI that was critical of USTF hospitals (May 16, p. 10).