The Military Health Services System--Prospects for the Future

GAO discussed the Department of Defense's (DOD) attempts to develop and institute systemwide managed health care for military beneficiaries. GAO noted that: (1) the military health services system lacked sufficient incentives and tools to control expenditures and provide high-quality care to beneficiaries; (2) beneficiaries needed strong incentives to register for managed care, which they viewed as taking away their freedom to choose physicians; and (3) an effective local provider network with more proactive and systematic information sharing would require better information about physicians' pricing, billing, and service patterns. GAO believes that: (1) achieving benefits and cost-sharing uniformity would remove confusions and uncertainty about dependents' medical benefits; (2) DOD plans to refine the military health care system offer the potential for gaining more control over costs, improving beneficiary access, and maintaining high-quality care; (3) the planned downsizing of the military may necessitate changes to the military health care system; and (4) DOD should comprehensively assess the opportunities for more efficiently using medical personnel, physician and other nonhospital provider payment reforms, and consolidating the administrative and command structures of the services' medical departments.