Health Costs Squeezing DoD Budgets

Health Costs Squeezing DoD Budgets

As the body politic passionately debates the rising costs of healthcare and what to do about it, the country’s largest employer is already feeling the pain. Even though the Obama administration is spending record amounts on defense, DOD’s budget is being squeezed by rising healthcare costs that will increasingly crowd out funding for weapons systems, according to number crunching done by the Center for Strategic and Budgetary Assessments.

While some contend the Obama administration intends to gut the defense budget, the numbers show a different story. At $538 billion, the 2010 base budget, not including war costs, exceeds spending at the peak of the Reagan buildup in 2010 dollars. The administration’s projected four year defense plan, “puts the president on pace to spend more on defense, in real dollars, than any other president has in one term of office since World War II,” says CSBA in an analysis of the 2010 defense budget.

So what’s the problem? Skyrocketing personnel costs, and its one that’s not going away either. Despite the profligacy of the Obama administration’s defense spending plans, the crunch caused by rising personnel costs only gets worse as total end strength increases.


Already, personnel costs are the fastest growing part of the DOD budget, CSBA says, and are rising at a 5.6 percent annual rate, driven largely by healthcare bills. Healthcare currently accounts for $47 billion of military spending and CSBA projects annual increases of between 5 and 7 percent. At that rate, health care costs will nearly double every ten years.

The dramatic increases in healthcare spending are driven by more troops, active and reserve, and their families, choosing the government healthcare option: TRICARE. Over the past several years, Congress has increased TRICARE benefits while refusing to raise the program’s fees; as with other federal government healthcare programs, TRICARE is largely untouchable.

Bottom line, according to CSBA, rising personnel costs will limit future spending choices. With soaring federal deficits projected as far as the eye can see, big increases in defense spending are not going to happen. At best, defense spending will increase modestly in future years. Certainly not enough to keep pace with rising healthcare costs. That means planners will have little choice but to pare back spending on weapons systems.

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“While some contend the Obama administration intends to gut the defense budget, the numbers show a different story. At $538 billion, the 2010 base budget, not including war costs, exceeds spending at the peak of the Reagan buildup in 2010 dollars.”
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It seems many gauge healthy defense spending by how many jets, tanks, ships, and missiles you procure, versus manpower expenses– therefore accounting for the disconnect. Counterinsurgencies are the poor man’s war, (useless dirt to coin a phrase) and therefore don’t lend themselves to high tech big ticket purchases, and instead favor man power and the low tech.

The Nation’s obligation to those who serve in the military exceeds the cost of healthcare. The government has a moral and practical reciprocal obligation to provide benefits commensurate with the extraordinary commitments it requires from career servicemembers.

The priority should be fixing TRICARE. Doctors say TRICARE is one of the lowest-paying plans in the country and imposes far more administrative requirements than other plans. Congress knew enacting TRICARE wouldn’t be cheap. Don’t penalize active duty families and retirees for Congress’ action.

Exceptional military medical and retirement benefits are the primary offsets for enduring decades of extraordinarily arduous service conditions. Servicemembers pay huge “up front” health premiums through 20–30 years of service and sacrifice. Recruiting problems show few Americans are willing to pay that heavy premium for that benefit.

Eroding benefits for career service can only undermine long-term retention and readiness. Today’s troops are very conscious of Congress’ actions concerning their future benefits. Surveys show 95% of active-duty members oppose such increases. Reducing military retirement benefits would be especially ill-advised when a severely overstressed force is already at increasing retention risk.

The country can afford to pay for both weapons and military health care. Recent defense budgets (in wartime) represent only about 4% of GDP — far lower than the 5.7% peacetime-year average since World War II. The world’s richest country doesn’t need to make military retirees pay for weapons.

Educating servicemembers and dependents on preventive healthcare measures would help to decreasem the cost.

And we want to trust congress to fix all healthcare and they can’t even take care of the troops. Throw them all out in 2010

Military spending is around 8% of GDP, the DoD portion is only 4%. Move it all to the VA system, which is much lower cost and rated the best medical care in the USA. Read “The Best Care Anywhere.” I know there are many who hate the VA, but that’s because they’ve tried to collect undeserved VA disability pay for non-combat injuries.

The simple solution is to stop encouraging E-3s and below to marry.

http://​www​.g2mil​.com/​m​a​r​r​i​e​d​_​t​e​e​n​a​g​e​_​w​a​r​r​i​o​r​s​.​htm

That may be the only thing I can agree on with g2​.mil.

There should be no problem with medical care for the military. Defense Officials MUST include a realistic budget to care for our military. Soldiers, Marines, Sailors, and Airmen win wars, not equipment or high tech weapons.

David,

“I know there are many who hate the VA, but that’s because they’ve tried to collect undeserved VA disability pay for non-combat injuries.”

Obviously you have no expereince with the VA!
Yes it is the best health care due to veterans fighting for it. The transfer to the VA concept is a good one and that is being done with DOD-VA cooperation in joint VA-DOD clinic across the country.

Blanket statements as you have said about non-combat related disabled veterans is way out of line! I guess the recently blinded veterans should not have addressed congress about their concerns or the DOD-VA commission report recommendations are just lies!?

The VA after WWII had huge funding, look at the reports from USC about how significantly the college educated generation had benefitted from their benefits. When you attack Sec.61 veterans you attack all disabled veterans!

The 2010 budget is a huge increase from past budgets, but many areas have been left stagnant for over 50 years, so there is much to be done so that all disabled veterans have what is mandated for them to have under the law!

Sec. Shinseki and staff have in my opinion the greatest challenge that the VA has faced in order to meet the needs of future, present and past veterans. If anyone is up to the task, he is, but blanket silly statements do not address any of the reals needs of veterans.

Personally, I would not mind too much if they increased the annual Tricare Prime premium, provided they also permitted it to be paid with “pre-tax” dollars. I realize others feel differently.

As for the VA, I have nothing but praise for the quality of care I have received. My sole criticism with the VA is the glacial pace at which they adjudicate claims and the labyrinthine appeals process.

For the last several years, the DoD tried to close the health care budget gap by making up the difference in one massive increase — which Congress kept shooting down. If the DoD tried to close the gap by increasing TRICARE fees gradually rather than shotgun blast it, they might be in better shape.

Team,

Below you will find the title of a podcast from DODlive​.mil, which is the process of joint DOD/VA leading edge cooperation. There is always room for improvement between agencies and this exemplifies one of the best efforts to date.

Tricare will be affected positively by this utility of resources and potential cost savings are outstanding as a result.

Episode #71: DoD/VA Electronic Health Records
Rear Admiral Gregory A. Timberlake is the Assistant Deputy Surgeon General for Total Force Integration and Director of the Department of Defense/Department of Veterans Affairs Interagency Program Office (DoD/VA IPO). RADM Timberlake will be sharing information on electronic health records that are part of the DoD/VA IPO

Good point, TB. A gradual increase would be more palatable, rather than the 3x/2x increase they “shopped” the last time.

There is legislation pending on making our medical premiums pre-tax, but I suspect its been lost in all the shouting over “healthcare reform”.

For those that would push Tricare over to the VA keep in mind it’s focus is on the adult former military population (primarily with Service Connected Problems). They do NOT have the facilities, staffing or moneys to handle the Active and Retired (men, women and children) that the Tricare system handles. The Tricare Prime users are located on or near active bases but the rest of us use local civilian providers. The VA system would collapse under the load.

tipover,

Joint not pushover to VA. They are both in the Total Human War Fighter Support System and thusly, must be made cost effective and cooperative. Personnel make the transition from
one to the other anyway, but it has not been studied as to how the best utilization of both resources can improve service delivery and lower operating cost as a whole.

Now the concept is from induction to the grave warfighter support for overall improvement in the quality of life and operating costs for all veterans. Maximum utilization of interoperability and collaboration.

To look at it another way, how can you have joint operating doctrine on the kinetic operations side of the equation, then drop the ball for the veteran and stay in the last century conceptually?

As far as the civilian contractors for Tricare Prime is concerned, some do not fill the paperwork out properly for Tricare supplemental insurance and the transfer of medical records and tests results can be a nightmare. There is much room for improvement in both systems.

The dramatic increases in healthcare spending are driven by more troops, active and reserve, and their families, choosing the government healthcare option: TRICARE. Over the past several years, Congress has increased TRICARE benefits while refusing to raise the program’s fees;
Bottom line, according to CSBA, rising personnel costs will limit future spending choices. With soaring federal deficits projected as far as the eye can see, big increases in defense spending are not going to happen. At best, defense spending will increase modestly in future years. Certainly not enough to keep pace with rising healthcare costs. That means planners will have little choice but to pare back spending on weapons systems.

What is everybody missing! Less bombs and a little more care for those who hump them. Fix tricare.What! No pay for it by diverting funds. VA? The VA has nothing to do with the subject. Rising cost are mostly because of ACTIVE duty, reserves and their families, not retirees!Soldiers get better care and we are a little more conservative in wasteful missions to bomb. OK so be it.

Sirmac,

I say again, same boat, same boat! I guess you have not seen the new federal clinics that serve DOD/VA jointly? Just because you are a bowrider, does not mean others are not on the stern.

If we keep looking at it the same way, you will have the same problems. Cost containment by increasing effective delivery of health care is the answer.

The military medical system faces unique challenges. The drawndown has eliminated hospitals so some training bases have very limited medical support. Large military bases are often in rural areas where their populations vastly exceed local medical infrastructure.
Structurally, we have combat medical assets and TDA medical assets which creates training and resource problems.
Missions are worldwide with medical teams being an invaluable strategic asset.
Population shifts and health trends also affect the workload. More women means more female services but OB/GYN docs are in short supply. The military doesn’t screen families prior to recruitment so folks facing serious family healthcare issues may join the military in higher numbers.
Starting at square 1, move MEPCOM to a MEPCOM-DODMERB hybrid medical model where entry physicals are conducted at local medical facilities under contract/case reviews by military civilians. This saves several thousand medics and may lower costs (if you count all the costs). Move ASVAB testing into local computer centers. All of which saves recruiters and applicants many thousands of hours and miles.
At the same time, you want to increase the physical’s completeness within a research concept to both monitor health trends (ICW CDC) and to prevent other downstream costs (e.g. screening for osteopenia to preclude thousands of stress fractures, etc.).
At square 2, the training bases are basically acting as the farm team for chronic career injuries that overload the systems downstream. Other Armies and Services have strongly demonstrated that improved nutrition, training design, fix forward med treatment, and systematic injury prevention programs reduces both attrition and injuries. Although I personally believe the boots for small sizes are a major problem (try bending a size 6 sometime).
At square 3, ought to look at the entire structural issue. A ‘purple’ medical system is one ongoing proposal. Maybe the Combat Hospitals function as hospitals for supported units full-time then the TDA hospitals where needed basically become civilian hospitals (yes, easier said than done)? Military personnel are very expensive; focus them on the military missions. Everything else moves to TRICARE.
Although the military has been a leader in better trained corpsman, LPNs, PAs, nurse practicioners, etc., re-looking specialty needs and practices can conserve critical manpower.
Within that, the military needs comprehensive multi-disciplinary rehabilitation doctrine and execution. If anybody thinks the Walter Reed problem was bathroom mold, then you missed the point.
At square 4, the VA has done a lot to move out of it’s WWII infrastructure. I’d move most services under TRICARE, and re-structure the rehabilitation concepts (multi-disciplinary teams). Offer full rehabilitation, education, and training, but never offer folks money per se. Money doesn’t treat wounds, but it does attract malingerers (As one guy told me:“College boy, this back gets me $700 a month and it ain’t getting any better.”). The reality is the vet population is shrinking dramatically and maintaining a separate medical system is costly and not needed.

Something is already being done with Tricare. I am 62, soon to be 63, and my wife just turned 60. We are on fixed income and have been since 2007. That means Navy Retirement check, VA and Social Security Disability. For several years now we have been getting an INCREASING number of Authorizations to CIVILIAN DOCTORS when our doctor puts in a consult. That means $12.00 everytime we go to see a doctor even though we have Tricare Prime. After awhile it is going to mean that it is either go to the doctor or EAT. It is already close to that already. We spend between $200 and $300 a month on outside doctors. That doesn’t even include what we spend in transportation to get there or the eating out. We DO NOT have a car and it can take all day to go to and from the doctor. Sometimes it takes 3 to 5 hours one way. That means we HAVE to either take something with us to eat that could go bad or eat out which means even more money spent each time.

Jerry,wait until you are 65 and go on MEDICARE and TRICARE FOR LIFE. Both pay the same fees to doctors. So,doctors and medical professionals are refusing to accept new patients with both these health policies because they only pay 50% of the doctors fair and reasonable charges. This is called cost containment. Not to worry, when the new “public option” is enacted, let’s call it MEDISCARE a large percentage of the population having the public option will also not be able to get health care no matter how cheap their premiums are or how little their co-pay and deductibles may be. The medical profession will cherry pick those patients having the more expensive yet better health insurance. President Robin Hood with emphasis on “hood” wants to redistribute “health” from seniors to his and the Democrats constituency. This is not robbing from the rich to give to the poor; don’t make that mistake!

CWolf88,

Roger that to square 1–3, but your concept of malingerers seems to imply that this is the majority of disabled vets. WRONG!, plus the guy could have been bragging about his winning his case.

http://www.nationaldefensemagazine.org/archive/2009/August/Pages/PrognosisisNotGoodforMilitary’sMedicalRecordsSystem.aspx, this newsletter speaks of the electronic records system that DOD uses and mentions how much more effective the VA system is compared to it. New interfaces are being made to mimic the VA system so as to be able to communicate between the systems better.

The VA already uses multi-disciplinary teams to
treat veterans, especially with severe and complex disabilities. They include civilian DR’s from heads of dept. at research hospitals and active duty Dr’s on the same team along with pain management and ancillary services.

““Money doesn’t treat wounds, but it does attract malingerers (As one guy told me:”College boy, this back gets me $700 a month and it ain’t getting any better.”).”” It also gets him the chronic limited employment and possible progressive deterioration syndrome. Have you ever tried to go through the application process of submitting a service connected disability claim application? All you have to do is look at one, then tell me your opinion on how easy it is to “malinger.”

I hope you never have to be a disabled veteran because with your perceived attitude about them, you could be self destructive, in my opinion. The basis for why disability income is paid is well documented in law. Since the number of veterans is shrinking, you made the perfect argument to bring the payscale up to standards currently instead of 50 years ago!

Assume for a minute that I’m a nice person who wants to help folks. I never implied that a majority disabled vets are malingering. Vets deserve the best we can give them.

I’m truly pro-rehabilitation. I’d argue for spending even more money on aggressive rehab services and re-education/training. VocRehab has a long history of offering successful programs. The problem with some rehab programs is that they are linear and focus on fixing the leg, etc., but not reintegrating the Whole Soldier (the PTRP programs at ATCs are one example). There is a broader rehab world than the VA.

Simply giving all folks permanent stipends doesn’t fix the core issues, and makes it impossible for some to get better (whether deliberate or unconscious malingering). Read the hx of Combat Fatique in WWII. It is bad rehabilitation IMHO.

I used to eat lunch in the VFW building in DC after meeting upstairs. For some, system gamesmanship is a way of life. It is the human condition; go ride the sickcall bus at any military training center.

But I’d rather focus on making the system better. We’re taking enormous injuries in training that are preventable.

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