Explores merging the military healthsystem and the Veterans Health Administration into one unifed federal entity. Go to war medici

1. Merging the Military Health System
(MHS) and the Veterans Health
Administration (VHA) into a Single
Governance Structure
Colonel William B. Grimes, MHA, FACHE
USA, RET
The views expressed in this academic research presentation are those of the
author and do not necessarily reflect the official policy or position of the
U.S. Government, the Department of Veterans Affairs,
the Department of Defense, or any of its agencies.

2. Be Persistent!
“Heretics Are Not All Bad!”
Paul K. Carlton, Jr., MD, FACS
Lt. Gen, USAF, Ret

3. Introduction - Argument Premise
Bottom Line: Until a single management or governance
structure is clearly established from a national authority, the
extent and success of collaboration efforts between DoD
and VA health systems will remain limited by existing public
laws and subject to the inherent bureaucracy of the two
organizations.
Large scale change has happened….creating the
Department of Homeland Security required realigning
assets from 22 Federal Agencies. It was accomplished in
six months but it took a national emergency and direct
Presidential involvement.

4. It’s Never as Bad as it Seems
None of Us
Want to Face
What Lies
Ahead of Us

5. Introduction - Argument Logic
• If:
- Increased DoD/VA collaboration improves access to care Cost
- Increased DoD/VA collaboration reduces cost
- Increased DoD/VA collaboration improves quality
• and
- Single governance improves DoD/VA collaboration
Access Quality
• Then:
- Single governance improves access, cost, and quality
…but at what risk?...is the juice worth
the squeeze?

6. Intro - Argument Parameters
In an April 2006 response to Presidential Budget Decision
(PBD) 753, the Under Secretary of Defense (Personnel and Secretary of Defense
Readiness) proposed a MHS structure with a “Unified Medical Under Secretary of
Command” and a separate “Healthcare Command.” Defense for Personnel
and Readiness
Army Medical Component Assistant Secretary of
Defense (Health Affairs)
Army Medical Forces
Unified Medical
Air Force Medical Healthcare Command
Command
Component
Air Force Medical Forces Operational Medical
Modernization Command Joint Regional Offices TRICARE Contracts
Command
Navy Medical Component Joint Regional Force Health Protection
Commands Command DoD Medical Treatment
Facilities and Clinics
Navy Medical Forces Medical Education and
Deployable Capabilities
Training Command
Marine Corps Medical
Component
Marine Corps Medical
Forces
Although this proposed MHS structure was not implemented, it does validate the concept that the “benefits mission” (circled
in red above) can be separated from the readiness mission of the MHS. For the purposes of this briefing, any proposed
single DoD/VA governance structure involves merging only the benefits mission of the Military Healthcare System (MHS)
with the Veterans Health Administration (VHA).

7. Background
• DoD and VA - two huge healthcare
systems
– Combined budget of $76 billion
– 300,000 personnel
– 13.5 million beneficiaries
– 1,600 locations world-wide
– Over 20 years of legislative directives to
increase collaboration
• Similar Systems

8. Similar Systems
Similar requirements = unique opportunity to explore a
“seamless” approach to the delivery of health care
Healthcare Venues Healthcare Specialties
DoD VA DoD VA
Most
Acute Care Hospitals
Healthcare
&
Specialties
Medical Centers
A Few A Few
Specialties Specialties
Battlefield Domiciliary e.g., e.g.,
Pediatrics Geriatrics
Source: Dr. Jones & Dr. Tibbits Briefing for 18/19 Mar 08 Trip

9. Why Now?
• OEF/OIF patient population
– This has changed the “politics” of the equation
• Estimated cost to deliver DoD and VA
health care are becoming unsustainable
• Current approach to improving DoD/VA
collaboration is not strategic
– Redundant DoD/VA services and programs

10. OEF/OIF Patient Population
• “As of March 2007, Veterans Health Administration (VHA) coordinated
the transfer of over 6,800 severely injured or ill active duty service
members and veterans from DoD to the VA.”
Testimony of Dr. Michael J. Kussman, Acting Undersecretary for Health, Department of Veterans
Affairs, U.S. House of Representatives, Subcommittee of Oversight and Investigations, March
8, 2007.
• “As of the first half of FY 2007, approximately 263,900 returning veterans
have sought care from VA medical centers and clinics.”
Testimony of the Honorable Patrick W. Dunne, Assistant Secretary for Policy and Planning, U.S.
Department of Veterans Affairs, U.S. Senate, Committee on Veterans Affairs, October 17, 2007.
• The Congressional Budget Office (CBO) estimates the total cost to
provide health care to OEF/OIF veterans with service connected conditions
to be between $7 and $9 billion over the next ten years.

11. DoD Healthcare Costs
($Billions - 2005 constant dollars)
Source: www.defenselink.mil/news/Feb2006/d20060206slides.pdf

12. VA Healthcare Costs
Other VA Benefit Programs
Source: http://www.whitehouse.gov/omb/budget/fy2008/veterans.html

13. DoD/VA Collaboration
• Lots of help and tremendous effort…
– Multiple DoD/VA Executive Councils,
Coordination Offices, and Working Groups
– Multiple site visits and formal studies to
improve collaboration
– Hundreds of National and Local Sharing
Agreements
…but are these permanent and temporary organizations
really necessary? Is there a better way?

14. Joint Committees
SECRETARY DEPARTMENT OF SECRETARY
VETERANS AFFAIRS (VA) DEPARTMENT OF DEFENSE (DoD)
VA/DoD JOINT EXECUTIVE COUNCIL
(JEC)
Construction Planning Committee (CPC) Coordinated Transition Working Group*
Joint Strategic Planning Committee (JSPC) Communications Working Group
VA/DoD BENEFITS EXECUTIVE COUNCIL VA/DoD HEALTH EXECUTIVE COUNCIL Joint Health Care Facility
(BEC) (HEC) Operations Steering Group (JFSG)
Benefits & Services Working Group Contingency Response Working Group Information Management Information
Technology Working Group
Benefits Delivery at Discharge Deployment Health Working Group
Working Group Joint Facility Utilization and Resource
Mental Health Working Group Sharing Working Group
Information Sharing
Information Technology Evidence-Based Clinical Practice Graduate Medical Education
Working Group Guidelines Working Group Working Group
Financial Management Working Group Acquisition & Medical Materiel
Medical Records Working Group
Management Working Group
Continuing Education & Training
Working Group Patient Safety Working Group
Pharmacy Working Group
Are there too many DoD/VA Working Groups and
Executive Councils to remain effective? Is this strategic?

15. Senior Oversight Committee
Senior Oversight Committee (SOC) Incoming from
Co-Chairs: other
DEPSECDEF and DEPSECVA commissions
Congress &
Media
Overarching Integrated
Full-time staff
Product Team
and VA Detail
(OIPT)
Press
Releases
Lines of Action (LOAs)
1 2 3 4 5 6 7 8
DoD/ VA Data
Traumatic Brain Injury Sharing Clean Sheet Personnel/ Pay
/ PTSD Support
Disability Case Facilities Legislation &
System Management Public Affairs
Again, more teams, groups, and action
offices…when will there be enough?

16. Resource Sharing Agreements
• Three types of sharing: National Initiatives, Joint
Venture, and Local Sharing Agreements
“In FY 2007, 100 VA Medical Centers were involved in
direct sharing agreements with 124 DoD medical
facilities for a total of 280 direct sharing agreements that
covered 148 unique services.”
Source: VA/DoD Joint Executive Council FY 2007 Annual Report
Separating the sub-agreement from the 280 master agreement
results in a total of 613 active sharing agreements. This seems
impressive, but how do we know the true value-added? How have
they improved healthcare?

17. Agreements by Unique
Large number of agreements but
what is the real value added?

18. Agreements by Service
Examples of Service Branch
Category “noise” potentially
inflating the true value added

19. Agreements by VISN
2007 Sharing Agreements
120
108
Number of Agreements
100
80
85 Agreements with NY Army NG 69
60 53
42 43
37 37
40 34
28 28 30
26
20 13 15 14 15
8 10 9
5 5 6
3
0
0 1 2 3 4 5 6 7 8 9 10 11 12 15 16 17 18 19 20 21 22 23 25
Veterans Integrated Service Network (VISN)

20. Reimbursement
Large variation between Fee and
CMAC early in the sharing program

21. Provider
VA is the “provider” of the service in over
70% of the agreements…understandable
because the VA is bigger…

22. New Agreements by Year
The number of new agreements
may not be a good indicator of the
level of effort…

23. Challenges and Concerns
• Single Governance Challenges:
– Cabinet-level departments
– Very politically sensitive
– Two well established healthcare systems
– Requires DoD to create some form of an Unified Medical
Command
• VA and DoD Concerns:
– VA’s concern is an unified system will “squeeze out” the veteran
– DoD’s concerns are inability to separate the TRICARE mission
and lack of direct control will negatively affect readiness
• Fear of Change

24. Fear of Change
• DoD experienced beneficiary “fear of change” when they
excluded MEDICARE eligible beneficiaries
– Resulted in TRICARE for Life (TFL) Program
• Veteran’s advocacy groups fear any merger will
“squeeze them out” of guaranteed access
– Reasonable to predict that merger will improve
access for all beneficiary populations

25. The MHS Mission
Deploy Medical Support
Deploy a Healthy Force Deploy a Healthy Force
Manage Beneficiary Manage Beneficiary Manage Beneficiary
Care Care Care
TRICARE TRICARE TRICARE
Deploy to
Patient Care, Support the
Sustain Skills Promote & Protect
to Health of the Force and Combatant
and Training Commanders 9

26. The “New” MHS Mission -
Focused on the Deployable Mission
Deploy Medical Support
Deploy a Healthy Force Deploy a Healthy Force
Manage Beneficiary Manage Beneficiary Manage Beneficiary
Care Care Care
TRICARE TRICARE TRICARE
...can we remove the benefits mission (i.e. TRICARE) from
DoD’s responsibility without negatively affecting readiness?

27. Close to Single Governance
North Chicago VAMC – Great Lakes Naval Health Clinic
Clear chain of command?
This “hybrid” shows the
limitations and restrictions of
current DoD/VA collaboration
public law.

28. Courses of Action
• COA 1: Form a Federal Military Health Command
by merging the brick and mortar assets of the
MHS and the VHA under the direction of DoD
• COA 2: Form a Federal Military Health Command
by merging the brick and mortar assets of the
MHS and the VHA under the direction of the VA
• COA 3: Form a Federal Health Command by
merging the brick and mortar assets of the MHS
and the VHA under the direction of the HHS

29. Screen/Evaluation Criteria
• Criteria for a System Merger
– DoD Screening Criteria - Military readiness
– VA Screening Criteria - Protect the benefit
– Unity of effort – Improved Responsiveness
– Reduce redundancies
– Cost savings
– Viability - Ease of implementation
– Ability to concentrate on core mission
– Number of Departments involved

30. System Evaluation Criteria
• Criteria for a Well-Functioning System
– Capacity to Innovate and Improve
– Equity
– Efficiency
– Access
– Quality
– Long, Healthy, and Productive Lives
Source: Commonwealth Fund Commission Key Indicators for Measuring Performance

31. COA 1: Combine under DoD Leadership
Secretary of Defense
Under Secretary of Defense for
Personnel and Readiness
Army Medical Assistant Secretary of Defense
Component (Health Affairs)
Army Medical
Forces
Federal Military
Unified Medical
Air Force Medical Healthcare
Command
Component Command
Air Force Medical Operational Medical
Forces Modernization Joint Regional TRICARE/HERO
Command Command Offices Contracts
Navy Medical Joint Regional
Component Commands Force Health
Protection Command
DoD Medical VA Medical
Navy Medical Forces Deployable Treatment Facilities
Treatment Facilities
Capabilities and Clinics
Medical Education and Clinics
and Training
Marine Corps
Command
Medical Component Existing DoD and VA facilities will be combined
where possible and grouped geographically using
Marine Corps the existing TRO structure
Medical Forces
Is running such a large healthcare system a core mission for DoD?

32. COA 2: Combine under VA Leadership
Secretary of Defense Secretary of
Veterans Affairs
Under Secretary of Defense Deputy Secretary
for Personnel and
Army Medical Readiness
Component Under Secretary for Heath,
Veterans Health
Assistant Secretary of
Administration
Army Medical Defense (Health Affairs)
Forces
Federal Military
Unified Medical
Air Force Medical Healthcare
Command
Component Administration
Air Force Medical Operational Medical Modernization Joint Regional TRICARE/HERO
Forces Command Command Offices Contracts
Navy Medical Joint Regional
Component Force Health
Commands Protection Command DoD Medical VA Medical
Treatment Facilities Treatment Facilities
Navy Medical Forces Deployable
Medical Education and Clinics and Clinics
Capabilities
and Training
Marine Corps Command Existing DoD and VA facilities will be combined
Medical Component where possible and grouped geographically using
the existing VISN structure
Marine Corps
Medical Forces
Running a healthcare system is the core mission for VHA Recommended

33. COA 2 Includes a “Don’t Sell the Farm” Clause
Large Medical Facilities run by the VHA but with a heavy military
presence. These facilities would serve as military
casualtyreception Centers of Excellence.

34. COA 3: Combine under HHS Leadership
Secretary of Health
and Human Services
Chief of Staff
Deputy Secretary
Most Innovative
Director, National Director, Indian Assistant Secretary
Institutes of Health Health Service (HIS) for Health, HHS
(NIH)
Director, Agency for Director, Federal
Assistant Secretary Military Healthcare
Healthcare Research
for Resources & System
and Quality
Technology
Commissioner, Food
Assistant Secretary and Drug Joint Regional TRICARE/HERO
for Preparedness Administration (FDA) Offices Contracts
and Response
Director, Office of
Global Health Affairs
Administrator,
Centers for Medicare DoD Medical VA Medical USPHS Personnel
National Coordinator Treatment Facilities Treatment Facilities
& Medicaid for Health and Clinics and Clinics
Information
Technology
Existing DoD, VA, and HHS facilities and personnel will be combined
Director Centers for where possible and geographically grouped using the existing HHS system
Disease Control and of ten regional offices.
Prevention (CDC)
This option creates the most “synergy” among federal healthcare entities.

35. COA Comparisons
COA 1 COA 2 COA 3
Hybrid of Criteria DoD VA HHS
Unity of effort
Recommended
Reduce redundancies
Cost savings
Viability - Ease of implementation
Ability to concentrate on core mission
Number of Departments involved
Capacity to Innovate and Improve
Long, Healthy, and Productive Lives
Operational Experience Running a
Large Healthcare System

36. Recommended Option COA 2
Phased Implementation
• Phase Zero – Get senior DoD, VA, Legislative leaderships’ buy-in. Contract
or have an independent governmental agency (i.e. CBO, GAO) conduct a
detailed analysis of the financial and organizational implications of the
recommended COA. This study would be very similar to the Center for Naval
Analysis (CNA) study on the cost implications of a Unified Medical Command
conducted in May 2006. Focus on resolving the issues identified executing the
single VA/DoD governance structure at the North Chicago VAMC/Great Lakes
Naval Clinic location.
• Phase One – Determine the DoD/VA system requirements and conduct “Best
of Breed” competitions among administrative, managed care, logistics, and
HER systems. Begin complete merger of selected clinical programs (i.e.
PM&R, Behavioral Health).
• Phase Two - Merge leadership at the current Joint Venture locations or other
“North Chicago-like” locations. Retain or create a position for a DoD “Deputy
Commander/Associate Director for Military Readiness.”
• Phase Three - Merge VHA and MHS senior leadership.

37. Issues to be Resolved
• Requires DoD to create a Unified Medical Command
• Merging VA/DoD beneficiary priorities will be
difficult…who gets the one open appointment?
• The “best of breed” competitions among DoD/VA/HHS
for IM/IT, logistics, personnel, and other admin and
clinical systems will meet resistance
• Must carve-out funding streams for military medicine
• Active Duty healthcare - DoD must maintain its system of
troop medical clinics, shipboard, and flight line medicine

38. Top Ten Reasons to Execute
1. Provides a definitive answer to Congressional mandates
2. Addresses unsustainable costs of both VA and DoD Healthcare
3. Addresses VA/DoD aging medical infrastructure
4. Enhances care for all veterans - especially OEF/OIF
5. Enhances VA and DoD physician retention
6. Improves Undergraduate and Graduate Medical Education
7. Improves ability to respond to a national emergency
8. Allows both Departments to focus on their “core” mission
9. Prevents future redundancies - How many more AHLTA and
VISTa will there be?
10. Establishes the framework for a National Healthcare System

39. Synergy
Imagine how the ability to respond to national emergencies and the ability
to gather medical surveillance data will be improved if all these Federal
medical facilities were electronically connected using the same IM/IT
system.
Even if it is just DoD and VA healthcare facilities in
the same system…could be the basis for a national
healthcare system

40. Conclusion
• “Heretics Are Not All Bad!”
• We are at a “tipping point” for change
• Any DoD/VA single governance structure must
be directed from a national authority
• The VA running the merged Federal Health
System is the most viable and is recommended
• Incorporating other assets from the HHS can be
explored later