Defense Health Care

Pursuant to a congressional request, GAO assessed the potential for savings by adding staff and other resources at military hospitals to treat more patients, instead of paying for their care under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).

GAO found that: (1) the Department of Defense (DOD) could potentially save between $18 million and $21 million if it increased resources at the reviewed hospitals to care for CHAMPUS patients; (2) military hospital care for CHAMPUS patients would cost from 43 to 52 percent less than CHAMPUS-funded care, although savings estimates varied due to differing costs of adding military, civilian, or contractor staff, and by hospital, type of care, and other factors; (3) DOD paid $37 million for CHAMPUS care in certain specialties during fiscal year (FY) 1988, amounting to nearly 20 percent of its total health care expenditures; (4) military facilities had unused capacity due to staff shortages, with a FY 1988 overall occupancy rate of 45 percent; (5) about 70 percent of CHAMPUS costs were incurred within areas experiencing low occupancy rates; (6) acquiring additional civilian government personnel presented the greatest savings potential, since such costs were less than those for acquiring military or contract staff; (7) treating more dependents of active-duty personnel in military hospitals could result in significant savings; (8) treating more CHAMPUS beneficiaries in military hospitals could produce increased medical proficiency and improved medical education programs; and (9) if hospitals augmented their resources, they could attract more CHAMPUS patients, but their costs would increase.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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