growth. Similarly, Congress won’t have to ap- prove another TRICARE For Life program or pass another retirement restoration initiative. Those were one-time fixes that won’t be repeated. But by using a 2000 or 2001
baseline, budget-cutting advo- cates make cost trends look worse than they are. Back then, everyone in the
administration and Congress ac- knowledged the necessity of pay, retirement, and health care fixes. A decade later, many of those same officials and their succes- sors express shock the fixes cost money. They find it convenient to forget Congress deemed those changes less costly than continued erosion of our defense capability.
“Health care costs are eating us alive.” For the past year, this has been Pentagon offi- cials’ constant mantra. It’s how they’ve justified pushing health care
fee hikes of $1,000 to $2,000 a year, including pro- posals to means test fees by income, add new fees for TRICARE For Life and TRICARE Standard, and double and triple pharmacy copayments. Defense officials persuaded the service chiefs and senior enlisted advisors to sign a letter to Congress endorsing these changes. But let’s keep the facts in context. To start with, health care represents about 16
percent of the U.S. gross domestic product. According to DoD, health care costs “represent about 10 percent of the nonwar defense budget.” Compared to the national rate, that seems
pretty reasonable for a personnel-heavy business that’s inherently dangerous. Claims that health care costs are rising out
of control are belied by the Pentagon’s own July 2012 reprogramming request to Congress, which acknowledged costs will be $708 million less than budgeted for FY 2012. “These funds are excess to Defense Health
Program requirements,” according to the docu- ment, “and can be used for higher priority items with no impact to the program.” And why exactly is that? “The FY 2012 budget estimate assumed private-sector care cost growth of 12.9 percent
There are good reasons only 17 percent are willing to endure those arduous demands and sacrifices for more than 20 years.
for active duty and 8.5 percent for all other ben- eficiaries,” the document continued. “Through the first six months of FY 2012 [costs actually] are growing at historically low rates of 0.6 percent for active duty and -2.7 percent for all other beneficiaries.” So all the time defense leaders
were complaining of exploding health care costs, the costs actu- ally were going down. In response to this revelation,
House Armed Services Com- mittee leaders fired a scathing, bipartisan letter to Defense Sec- retary Leon Panetta. “As you are aware, the House of
Representatives … declined to grant DoD the au- thority to raise TRICARE fees. We subsequently heard from DoD that our refusal … was endanger- ing the sustainability of TRICARE programs. We have heard that ‘TRICARE is crippling’ the DoD. This does not appear to be the case if DoD has a $708 million surplus in FY 2012. … We do not understand how DoD can justify a request to raise fees on a class of people whose costs to the depart- ment are actually decreasing.” And it’s not as if this was a one-time thing.
According to the Government Accountability Office, DoD underspent its TRICARE budget for civilian provider care by $771 million in FY 2010 and by more than $1.3 billion in FY 2011. These budget snafus further buttress MOAA’s assertion that defense leaders should focus on fulfilling their own responsibilities for efficient program oversight rather than seeking to foist blame and big fee hikes on beneficiaries. In that regard, more than a dozen studies
have urged reforming the current counter- productive bureaucracy under which three “stovepiped” service health care programs and multiple contractors squabble for shares of the health care-budget pie. To illustrate the problem, care delivered
through military hospitals and clinics is 25-per- cent cheaper than purchasing care in the private sector, but military facilities are 27-percent unde- rutilized. Why? Because nobody’s in charge of en- suring care is delivered in the most cost-efficient way. The services that fund and staff military facilities focus on their separate budgets. There’s no disincentive for shifting beneficiaries to more costly civilian care that gets billed to DoD.
NOVEMBER 2012 MILITARY OFFICER 57
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