Medicare Subvention Demonstration
Pilot Satisfies Enrollees, Raises Cost and Management Issues for DOD Health Care Gao ID: GAO-02-284 February 11, 2002The Department of Defense's (DOD) Medicare subvention demonstration tested alternate approaches to health care coverage for military retirees. Retirees could enroll in new DOD-run Medicare managed care plans, known as TRICARE Senior Prime, at six sites. The demonstration plan offered enrollees the full range of Medicare-covered services as well as additional TRICARE services, with minimal copayments. During the demonstration period, the program parameters were changed, allowing military retirees age 65 and older to become eligible for TRICARE coverage as of October 1, 2001, and Senior Prime was extended for one year. The demonstration showed that retirees were interested in enrolling in low-cost military health plans and that DOD was able to satisfy its Senior Prime enrollees. By the close of the initial demonstration period, about 33,000 retirees were enrolled in Senior Prime, and more were on waiting lists. When nonenrollees were asked why they did not join Senior Prime, more than 60 percent said that they were satisfied with their existing health coverage; few said that they disliked military care. Although the demonstration had positive results for enrollees, it also highlighted three challenges confronting the military health system in managing patient care and costs. First, care needs to be managed more efficiently. Although DOD satisfied enrollees and gave them good access to care, it incurred high costs. Second, DOD's efforts were hindered by limitations in its data and data systems. Finally, the demonstration illustrated the tension between the military health system's commitment to support military operations and promote the health of active-duty personnel and its commitment to provide care to dependents of active-duty personnel, retirees and their families, and survivors.
GAO-02-284, Medicare Subvention Demonstration: Pilot Satisfies Enrollees, Raises Cost and Management Issues for DOD Health Care
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United States General Accounting Office:
GAO:
Report to Congressional Committees:
February 2002:
Medicare Subvention Demonstration:
Pilot Satisfies Enrollees, Raises Cost and Management Issues for DOD
Health Care:
GAO-02-284:
Contents:
Letter:
Results in Brief:
Background:
Demonstration illustrated Retirees' Interest in Military Health Care,
Had Positive Impact on Enrollees:
Demonstration Underscored Challenges in Managing Care and Costs Within
the Military Health System:
Concluding Observations:
Agency Comments:
Appendix I: Methodology for Evaluating the Subvention Demonstration:
Appendix II: Senior Prime Enrollees' Previous Medicare Managed Care
Plan Enrollment:
Appendix III: Comments From the Department of Defense:
Appendix IV: Comments From the Centers for Medicare and Medicaid
Services:
Appendix V: GAO Contacts and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Characteristics of Participating MTFs Varied:
Table 2: Enrollment at the Subvention Demonstration Sites Varied:
Table 3: Most Enrollees Cited Military Care as a Reason for Enrolling
in Senior Prime:
Table 4: Enrollees Cited Access to Care, Low Cost-Sharing as Positive
Features of Senior Prime:
Table 5: Most Nonenrollees Were Satisfied with Their Current Coverage:
Table 6: The Percentage of Senior Prime Enrollees Who Switched from
Another Medicare Managed Care Plan Varied by Site:
Figures:
Figure 1: As Senior Prime Enrollment Grew, Space-Available Care
Declined:
Abbreviations:
BBA: Balanced Budget Act of 1997:
CMS: Centers for Medicare and Medicaid Services:
DEERS: Defense Enrollment Eligibility Reporting System:
DOD: Department of Defense:
DSH: disproportionate share hospital:
GME: graduate medical education:
HCFA: Health Care Financing Administration:
LOE: level of effort:
MTF: military treatment facility:
NDAA: National Defense Authorization Act for Fiscal Year 2001:
TMA: TRICARE Management Activity:
TROA: The Retired Officers Association:
[End of section]
United States General Accounting Office:
Washington, DC 20548:
February 11, 2002:
Congressional Committees:
In recent years, the Congress has sought to improve health care
benefits for Medicare-eligible military retirees. In the past, these
retirees[Footnote 1] were not eligible for the Department of Defense's
(DOD) TRICARE health care program and were able to get care from
military treatment facilities (MTF) only when space was available. By
law, DOD was not responsible for providing a full range of services to
these Medicare-eligible retirees and could not receive payments from
Medicare for those services that it provided them. The DOD Medicare
subvention demonstration,[Footnote 2] established by the Balanced
Budget Act of 1997 (BBA),[Footnote 3] was designed to test an
alternate way of providing health care coverage to retirees through
DOD.
The demonstration allowed retirees to enroll in new DOD-run Medicare
managed care plans, known as TRICARE Senior Prime, at six sites. The
Senior Prime plans offered enrollees the full range of Medicare-
covered services as well as additional TRICARE services, with minimal
copayments. At the same time, Senior Prime gave enrollees improved
access to MTF care. The demonstration authorized DOD to receive
payment from Medicare if MTFs continued to spend as much on retirees
as they had in the past. The demonstration, which began in 1998, was
originally authorized for a 3-year period.
During the demonstration period, new legislation altered the manner in
which retirees receive health care coverage through DOD. Under
provisions of the Floyd D. Spence National Defense Authorization Act
for Fiscal Year 2001 (NDAA),[Footnote 4] military retirees age 65 and
older became eligible for TRICARE coverage as of October 1, 2001. The
NDAA also extended Senior Prime for 1 year, through December 2001,
with the possibility of extension and expansion. DOD has decided,
however, not to extend Senior Prime or implement it in other areas.
Nonetheless, DOD's experience with Senior Prime illustrated issues
that DOD may face in its future efforts to serve military retirees and
other beneficiaries.
The BBA directed us to evaluate the demonstration during its initially
authorized period.[Footnote 5] The law required us to study a broad
range of issues, including the demonstration's effects on
beneficiaries, its costs to DOD and Medicare, and any difficulties
that DOD encountered in managing the demonstration. As mandated by the
BBA, we have issued a series of reports on the demonstration to date.
[Footnote 6] This is our last report on the demonstration. Our
objectives are to describe (1) the demonstration's appeal to
beneficiaries, why some joined and others did not, and the reactions
to the demonstration of those who joined and (2) difficulties DOD
encountered in managing patient care and costs.
To address these issues, we drew on our interviews with DOD and Health
Care Financing Administration (HCFA)[Footnote 7] officials and our
visits to the demonstration sites both during the start-up phase and
toward the end of the initial demonstration period. In addition, we
analyzed data from our mail survey of about 20,000 Medicare-eligible
military retirees in the demonstration areas. We supplemented the
survey data with reports and administrative data from DOD and HCFA,
but did not independently verify their data (See appendix I for a
discussion of our survey and methods.)
Several features of the demonstration limit the generalizability of
our findings. First, the demonstration sites are not representative of
all MTF service areas. MTF resources are greater in the demonstration
areas than in most other areas.[Footnote 8] In addition, sites'
ability to support the demonstration was a factor in site selection.
Second, the sites in many ways remained in a mode of implementing the
demonstration; consequently, we were unable to observe Senior Prime in
a period of routine operation. Third, our findings are particular to
the context in which Senior Prime took place. As an important
demonstration project, Senior Prime received a great deal of
management attention at a limited number of locations; if it had been
expanded nationwide, results might have differed. Finally, we cannot
generalize retirees' demand for Senior Prime to their future demand
for MTF care, in large part because retirees will be able to obtain
care in the civilian sector with TRICARE covering most of their
Medicare cost-sharing.
Our evaluation of costs was confined to 1999, the first full year of
the demonstration, because more recent data were not available in time
for our analysis. Findings during this initial period would not
necessarily apply fully were Senior Prime to continue.
We performed our work from March 2001 through November 2001 in
accordance with generally accepted government auditing standards.
Results in Brief:
The demonstration showed that retirees were interested in enrolling in
low-cost military health plans and that DOD was able to satisfy its
Senior Prime enrollees. By the close of the initial demonstration
period, about 33,000 retirees”over one-fourth of those eligible”were
enrolled in Senior Prime and more were on waiting lists. The access to
military care that Senior Prime provided was particularly attractive
to enrollees. Over 80 percent reported that they joined Senior Prime
because they preferred military care. After enrolling, most retirees
reported that they were able to get the care that they needed with
minimal out-of-pocket costs. Few enrollees decided to leave Senior
Prime. While enrollees were generally positive about the program, a
minority reported difficulties getting care. When asked why they did
not join Senior Prime, over 60 percent of nonenrollees said that they
were satisfied with their existing health coverage, and few cited a
dislike of military care. Before the demonstration, a minority of
nonenrollees had relied on MTF care; under the demonstration, most of
these nonenrollees experienced reduced access to military care. About
40 percent of these retirees who had previously relied on MTFs said
that they decided not to enroll in part because they expected to
continue to get MTF care.
While the demonstration had positive results for enrollees, it also
highlighted three challenges confronting the military health system in
managing patient care and costs. First, the demonstration revealed the
need to manage care more efficiently: although DOD satisfied enrollees
and gave them good access to care, in doing so it incurred high costs.
These high costs were largely due to enrollees' heavy use of services,
which substantially exceeded that of comparable Medicare
beneficiaries. Although MTFs generally tried to restrain inappropriate
utilization, some features of the military health system weakened
their incentives to moderate utilization and costs. For example, MTFs
could reduce care for nonenrollees when resources were strained.
Senior Prime's low cost-sharing, although beneficial for enrollees,
encouraged them to use services and made it more difficult for DOD to
control utilization. Second, although DOD was able to establish and
operate the demonstration, its efforts were hindered by limitations in
its data and data systems. Officials had difficulty producing
reliable, timely, and complete information on retirees' care. This
hampered their ability to implement the demonstration's complex
payment mechanism as well as to monitor enrollees' health care costs
and utilization. While DOD is taking steps to improve its data, basic
data problems”such as the inability to segregate costs for seniors”are
pervasive and persistent. Finally, the demonstration illustrated the
tension between the military health system's commitment to support
military operations and promote the health of active-duty personnel
and its commitment to provide care to civilians”dependents of active-
duty personnel, retirees and their families, and survivors. As Senior
Prime illustrated, caring for seniors”who require more complex care
than younger and healthier patient groups”can help prepare medical
personnel to treat complex medical and surgical cases while deployed.
However, providing care to civilians can also constrain MTFs' efforts
to meet their military mission. For example, in selecting staff for
deployment, MTFs sometimes avoided selecting clinicians with
substantial civilian care responsibilities so civilian care would not
be disrupted. Conversely, rotations and deployments can complicate the
provision of care to civilians and reduce the continuity of their care.
In commenting on a draft of this report, DOD said that the report
identified some of the challenges it faced in implementing and
managing the demonstration, while noting limitations in the report's
generalizability as well as several issues concerning data systems.
The Centers for Medicare and Medicaid Services (CMS) said that the
report was accurate and met its objectives.
Background:
Two large health programs”-TRICARE and Medicare-”influenced the design
and operation of the Medicare subvention demonstration.
TRICARE:
The military health system has three missions: (1) maintaining the
health of active-duty service personnel, (2) medically supporting
military operations, and (3) providing care to the dependents of
active-duty personnel, retirees and their families, and survivors. In
fiscal year 1999, DOD's annual appropriations included about $16
billion for health care, of which over $1 billion funded the care of
seniors.
In the mid-1990s, DOD implemented the TRICARE framework for military
health care in response to rapidly rising costs and beneficiary
concerns about access to military care. Its goals were to improve
beneficiary access and quality while containing costs. TRICARE offers
health care coverage to approximately 6.6 million active-duty military
personnel, retirees, dependents, and survivors under age 65. These
beneficiaries have three main options: TRICARE Prime, a managed care
option; TRICARE Extra, a preferred provider option; and TRICARE
Standard, a fee-for-service option. A new option, TRICARE Plus, allows
beneficiaries to enroll with a primary care provider at participating
MTFs.[Footnote 9] TRICARE covers inpatient services, outpatient
services such as physician visits and lab tests, and skilled nursing
facility and other post-acute care. It also covers prescription drugs,
which are available at MTFs, through DOD's National Mail Order
Pharmacy, and at civilian pharmacies.[Footnote 10] TRICARE delivers
care through over 600 MTFs-”such as medical centers, community
hospitals, or major clinics that serve military installations”-and a
network of civilian providers managed by DOD's managed care support
contractors. Managed care support contractors also assist
beneficiaries and support regional DOD management by providing
services such as enrollment and utilization management.
DOD Health Care for Medicare-Eligible Military Retirees:
There are about 1.5 million retired military personnel, dependents,
and survivors age 65 or older residing in the United States. About
600,000 of these seniors live within 40 miles of an MTF. In the past,
retirees had access to all MTF and network services through TRICARE
until they turned age 65 and became eligible for Medicare, at which
point they could only use military health care on a space-available
basis”that is, when MTFs had unused capacity after caring for higher
priority beneficiaries. In the 1990s, downsizing and changes in access
policies led to reduced space-available care throughout the military
health system. Moves to contain costs by relying more on military care
and less on civilian providers under contract to DOD also contributed
to the decrease in space-available care. As is the case today, MTF
capacity varied from a full range of services at major medical centers
to limited outpatient care at small clinics. Some retirees aged 65 or
older relied heavily on military facilities for their health care, but
most did not, and about 60 percent did not use military health care
facilities at all. Retirees could obtain prescriptions from MTFs, but
not from TRICARE's National Mail Order Pharmacy or network of civilian
pharmacies. In addition to using these DOD resources, retirees could
receive care paid for by Medicare and other public or private
insurance for which they were eligible.
Significant changes in retiree benefits and military health care
occurred in 2001 as a result of the NDAA. This legislation gave older
retirees two major benefits:
* Pharmacy benefit. Effective April 1, 2001, retirees age 65 and older
were given access to prescription drugs through TRICARE's National
Mail Order Pharmacy and at civilian pharmacies.[Footnote 11]
* TRICARE eligibility. Effective October 1, 2001, retirees age 65 and
older enrolled in Medicare part B became eligible for TRICARE coverage”
commonly termed TRICARE For Life. As a result, TRICARE is now a
secondary payer for these retirees' Medicare-covered services”paying
most of their required cost-sharing. This includes copayments required
of retirees enrolled in civilian Medicare managed care plans. Retirees
are eligible to enroll in TRICARE Plus but are not allowed to enroll
in TRICARE Prime.
Medicare:
Medicare is a federally financed health insurance program for persons
age 65 and older, some people with disabilities, and people with end-
stage kidney disease. Eligible beneficiaries are automatically covered
by part A, which covers inpatient hospital, skilled nursing facility
and hospice care, as well as some home health care. They also can pay
a monthly premium to join part B, which covers physician and
outpatient services as well as those home health services not covered
under part A. Traditional Medicare allows beneficiaries to choose any
provider that accepts Medicare payment and requires beneficiaries to
pay for part of their care. Most beneficiaries have supplemental
coverage that reimburses them for many of the costs that Medicare
requires them to pay. Major sources of this coverage include employer-
sponsored health insurance; "Medigap" policies, sold by private
insurers to individuals; and Medicaid, a joint federal-state program
that finances health care for low-income people.
The alternative to traditional Medicare, Medicare+Choice, offers
beneficiaries the option of enrolling in managed care or other private
health plans. All Medicare+Choice plans cover basic Medicare benefits,
and many also cover additional benefits such as prescription drugs.
Typically, Medicare+Choice managed care plans have limited cost-
sharing but restrict members' choice of providers and may require an
additional monthly premium.
The Medicare Subvention Demonstration:
Under the Medicare subvention demonstration, DOD established and
operated six Medicare+Choice managed care plans, called TRICARE Senior
Prime, at sites selected jointly by DOD and HCFA. Enrollment in Senior
Prime was open to military retirees enrolled in Medicare part A and
part B who resided within roughly 40 miles of a participating MTF.
About 125,000 retirees were eligible for the demonstration. DOD capped
enrollment at about 28,000 for the demonstration as a whole; each MTF
had its own enrollment cap. In addition, retirees enrolled in TRICARE
Prime who had a primary care provider at a demonstration MTF could
"age in" to Senior Prime upon reaching age 65, even if MTFs'
enrollment caps had been reached.
Senior Prime offered enrollees the full range of Medicare-covered
services as well as additional TRICARE services, notably prescription
drugs. It also gave them higher priority for care at MTFs than
retirees who did not join the program. Enrollees paid the Medicare
part B premium, but no additional premium to DOD.[Footnote 12] Care at
MTFs was free of charge, but enrollees had to pay any applicable cost-
sharing amounts when MTFs referred them to the civilian network for
care (for example, $12 for an office visit). All primary care was
provided at MTFs, but DOD purchased some hospital and specialty care
from the civilian network. Purchased care was used for services not
available at MTFs as well as when MTFs did not have sufficient
capacity in particular specialties.
Although the demonstration was authorized to begin in January 1998,
implementation was delayed, and the first site began delivering care
in September 1998. All sites were operational by January 1999. The six
demonstration sites are in different regions of the country and
include 10 MTFs that vary in size and types of services offered (see
table 1), as well as by managed care penetration in the local Medicare
market. The five medical centers offer a wide range of inpatient
services and specialty care as well as primary care. They accounted
for over 75 percent of all enrollees in the demonstration. The two San
Antonio medical centers had 38 percent of all enrollees. The four
community hospitals have more limited capabilities, and the civilian
network provided much of the specialty care. At Dover, the MTF is a
clinic that offers only outpatient services, thus requiring all
inpatient and specialty care to be obtained at another MTF or
purchased from the civilian network.
Table 1: Characteristics of Participating MTFs Varied:
Demonstration site, location of military treatment facility: Colorado
Springs; Fort Carson, Colorado Springs, Colorado;
Facility type: Community hospital;
Eligible retirees[A]: 6,530;
Total enrollment[B]: 2,371
Percentage of demonstrationwide enrollment: 7%.
Demonstration site, location of military treatment facility: Colorado
Springs; U.S. Air Force Academy, Colorado Springs, Colorado;
Facility type: Community hospital;
Eligible retirees[A]: 8,458;
Total enrollment[B]: 1,750;
Percentage of demonstrationwide enrollment: 5%.
Demonstration site, location of military treatment facility: Dover;
Dover Air Force Base, Dover, Delaware;
Facility type: Clinic;
Eligible retirees[A]: 3,894[C];
Total enrollment[B]: 1,062;
Percentage of demonstrationwide enrollment: 3%.
Demonstration site, location of military treatment facility: Keesler;
Keesler Air Force Base, Biloxi, Mississippi;
Facility type: Medical center;
Eligible retirees[A]: 8,309;
Total enrollment[B]: 3,507;
Percentage of demonstrationwide enrollment: 11%.
Demonstration site, location of military treatment facility: Madigan;
Fort Lewis, Tacoma, Washington;
Facility type: Medical center;
Eligible retirees[A]: 21,072;
Total enrollment[B]: 4,674;
Percentage of demonstrationwide enrollment: 14%.
Demonstration site, location of military treatment facility: San
Antonio; San Antonio Area; Fort Sam Houston, San Antonio, Texas;
Facility type: Medical center;
Eligible retirees[A]: 21,354;
Total enrollment[B]: 5,928;
Percentage of demonstrationwide enrollment: 18%.
Demonstration site, location of military treatment facility: San
Antonio; San Antonio Area; Lackland Air Force Base, San Antonio, Texas;
Facility type: Medical center;
Eligible retirees[A]: 15,153;
Total enrollment[B]: 6,523;
Percentage of demonstrationwide enrollment: 10%.
Demonstration site, location of military treatment facility: Texoma
Area; Sheppard Air Force Base, Wichita Falls, Texas;
Facility type: Community hospital;
Eligible retirees[A]: 2,820;
Total enrollment[B]: 1,074;
Percentage of demonstrationwide enrollment: 3%.
Demonstration site, location of military treatment facility: Texoma
Area; Fort Sill, Lawton, Oklahoma;
Facility type: Community hospital;
Eligible retirees[A]: 4,873;
Total enrollment[B]: 1,467;
Percentage of demonstrationwide enrollment: 4%.
Demonstration site, location of military treatment facility: San
Diego; San Diego, California;
Facility type: Medical center;
Eligible retirees[A]: 34,485;
Total enrollment[B]: 4,751;
Percentage of demonstrationwide enrollment: 14%.
Demonstration site, location of military treatment facility: Total;
Eligible retirees[A]: 126,948;
Total enrollment[B]: 33,107;
Percentage of demonstrationwide enrollment: 100%[D].
Note: Although the law specifies six test sites, for the purpose of
analysis we treat the San Antonio area and the Texoma area, which are
roughly 300 miles apart, as separate sites.
[A] As of December 31, 2000.
[B] As of December 31, 2000. Total enrollment includes age-ins.
[C] As of June 1998.
[D] Percentages do not add to 100 due to rounding.
Source: TRICARE Senior Prime Plan Operations Report (Washington, D.C.:
DOD, Dec. 31, 2000). The number of eligible retirees (by site and
total) is drawn from DOD's Defense Enrollment Eligibility Reporting
System (DEERS).
[End of table]
The BBA established rules for Medicare to follow in paying DOD for
Senior Prime care. It authorized Medicare to pay DOD in a way that was
similar to the way it pays civilian Medicare+Choice plans, with
several major exceptions:
* Senior Prime's capitation rate”a fixed monthly payment for each
enrollee”differed from the Medicare+Choice rate in several ways. The
Senior Prime rate was set at 95 percent of the rate that Medicare
would pay civilian Medicare+Choice plans in the demonstration areas,
consistent with a belief that DOD could provide care at lower cost
than the private sector. The rate was further adjusted by excluding
the part of the Medicare+Choice rate that reflects graduate medical
education (GME) and disproportionate share hospital (DSH) payments,
[Footnote 13] as well as a percentage of payments made for hospitals'
capital costs. The GME exclusion took into account the fact that GME
in the military health system is funded by DOD appropriations, and the
DSH exclusion recognized that DOD medical facilities do not treat the
low-income patients for whom DSH payments compensate hospitals. The
law directed HCFA and DOD to determine the amount of the capital
adjustment, and the two agencies agreed to exclude two-thirds of the
capital costs reflected in the Medicare+Choice rate.
* The Senior Prime capitation rate was to be adjusted if there was
"compelling" evidence that enrollees were healthier or sicker than
their Medicare fee-for-service counterparts. The adjustment was
intended to reflect whether Senior Prime enrollees would be expected
to be significantly more or less costly than the average Medicare
beneficiary. HCFA and DOD agreed that if the difference between the
adjusted and unadjusted payments equaled or exceeded 2.5 percent, then
that would be compelling evidence that enrollees' health status
differed from that of their Medicare counterparts. In that case, the
Medicare payment would reflect the adjustment.
* The BBA required that, before DOD could receive Medicare payment,
participating MTFs must spend as much on care for retirees age 65 and
older as they did prior to the demonstration. This threshold amount-”
termed DOD's baseline level of effort or LOE-”was intended to prevent
the federal government from paying for the same care twice, through
both DOD appropriations and Medicare.
* The total amount that Medicare could pay DOD for the demonstration
was capped at $50 million in 1998, $60 million in 1999, and $65
million in 2000.[Footnote 14]
The demonstration was initially scheduled to end in December 2000. The
NDAA extended the demonstration for 1 year”through 2001”with the
possibility of further extension and expansion. However, DOD allowed
Senior Prime to end on December 31, 2001, because the new TRICARE For
Life program provides health care coverage to older military retirees.
DOD has stated that Senior Prime enrollees will have priority for
enrollment in TRICARE Plus, which began at the former demonstration
MTFs in January 2002.
As authorized by the BBA, the demonstration was to include a second
component”Medicare Partners. Under Medicare Partners, a demonstration
MTF would be allowed to contract with civilian Medicare+Choice plans
to provide selected MTF services to military retirees enrolled in the
civilian plans. According to DOD, lack of interest among local
Medicare+Choice plans was key to its decision not to implement the
Medicare Partners program. Plans may have had little incentive to
participate in Medicare Partners and pay for MTF care because retirees
already were eligible for such care at DOD's expense”when space was
available.
Demonstration Illustrated Retirees' Interest in Military Health Care,
Had Positive Impact on Enrollees:
The demonstration showed that DOD health care plans based at MTFs
could attract many retirees, particularly those who were recent users
of military care. Retirees said they were attracted to Senior Prime by
the quality and convenience of MTF care, as well as by the program's
low cost-sharing. After enrolling, most reported that they were able
to get the care that they needed at little expense. Most retirees who
did not enroll in Senior Prime reported that they were satisfied with
their existing health care coverage.
Senior Prime Met Enrollees' Expectations for Access to MTFs, Quality
Health Care, and Low Costs:
Senior Prime's enrollment showed that there was substantial demand
among retirees for DOD health care plans based at MTFs, and also that
demand varied by site. By December 2000, Senior Prime had attracted
roughly 33,000 enrollees”over one-fourth of all retirees eligible to
join. (See table 2.) Over 6,500 of these enrollees had aged-in from
TRICARE Prime after turning age 65.[Footnote 15] The percentage of
eligible retirees who enrolled varied significantly, from 14 percent
at San Diego to over 40 percent at Keesler and Lackland Air Force
Base.[Footnote 16] However, these figures understate retirees'
interest in Senior Prime: during the demonstration, 6 of the 10 MTFs
reached their maximum enrollment and had to establish waiting lists.
Table 2: Enrollment at the Subvention Demonstration Sites Varied:
Demonstration site, location of military treatment facility: Colorado
Springs; Fort Carson, Colorado Springs, Colorado;
Facility type: Community hospital;
Eligible retirees[A]: 6,530;
Total enrollment[B]: 2,371
Percentage of eligible retirees enrollment: 36%.
Demonstration site, location of military treatment facility: Colorado
Springs; U.S. Air Force Academy, Colorado Springs, Colorado;
Facility type: Community hospital;
Eligible retirees[A]: 8,458;
Total enrollment[B]: 1,750;
Percentage of eligible retirees enrollment: 21%.
Demonstration site, location of military treatment facility: Dover;
Dover Air Force Base, Dover, Delaware;
Facility type: Clinic;
Eligible retirees[A]: 3,894[C];
Total enrollment[B]: 1,062;
Percentage of eligible retirees enrollment: 27%.
Demonstration site, location of military treatment facility: Keesler;
Keesler Air Force Base, Biloxi, Mississippi;
Facility type: Medical center;
Eligible retirees[A]: 8,309;
Total enrollment[B]: 3,507;
Percentage of eligible retirees enrollment: 42%.
Demonstration site, location of military treatment facility: Madigan;
Fort Lewis, Tacoma, Washington;
Facility type: Medical center;
Eligible retirees[A]: 21,072;
Total enrollment[B]: 4,674;
Percentage of eligible retirees enrollment: 22%.
Demonstration site, location of military treatment facility: San
Antonio; San Antonio Area; Fort Sam Houston, San Antonio, Texas;
Facility type: Medical center;
Eligible retirees[A]: 21,354;
Total enrollment[B]: 5,928;
Percentage of eligible retirees enrollment: 28%.
Demonstration site, location of military treatment facility: San
Antonio; San Antonio Area; Lackland Air Force Base, San Antonio, Texas;
Facility type: Medical center;
Eligible retirees[A]: 15,153;
Total enrollment[B]: 6,523;
Percentage of eligible retirees enrollment: 43%.
Demonstration site, location of military treatment facility: Texoma
Area; Sheppard Air Force Base, Wichita Falls, Texas;
Facility type: Community hospital;
Eligible retirees[A]: 2,820;
Total enrollment[B]: 1,074;
Percentage of eligible retirees enrollment: 38%.
Demonstration site, location of military treatment facility: Texoma
Area; Fort Sill, Lawton, Oklahoma;
Facility type: Community hospital;
Eligible retirees[A]: 4,873;
Total enrollment[B]: 1,467;
Percentage of eligible retirees enrollment: 30%.
Demonstration site, location of military treatment facility: San
Diego; San Diego, California;
Facility type: Medical center;
Eligible retirees[A]: 34,485;
Total enrollment[B]: 4,751;
Percentage of eligible retirees enrollment: 14%.
Demonstration site, location of military treatment facility: Total;
Eligible retirees[A]: 126,948;
Total enrollment[B]: 33,107;
Percentage of eligible retirees enrollment: 26%.
[A] As of December 31, 2000.
[B] As of December 31, 2000. Total enrollment includes age-ins.
[C] As of June 1998.
Source: TRICARE Senior Prime Plan Operations Report (Washington, D.C.:
DOD, Dec. 31, 2000). The number of eligible retirees (by site and
total) is drawn from DEERS.
[End of table]
Senior Prime's strong link to military care was particularly
attractive to retirees. When asked why they wanted to join Senior
Prime, enrollees most often cited reasons related to military care,
such as the quality of care at MTFs, a preference for military care,
and the convenience of local MTFs. (See table 3.) Most enrollees had
used MTFs to some extent the year before enrolling in the program, and
about 60 percent had relied on these facilities for most or all of
their care. In part, this reflected the design of the program. To be
eligible for Senior Prime, retirees must have used military care since
becoming Medicare-eligible.[Footnote 17] However, DOD relied on
retirees' answers to a question about prior MTF use and did not verify
their answers. Over half of enrollees believed that by joining Senior
Prime they would be able to get appointments at MTFs more easily. This
is not surprising, given that Senior Prime offered retirees the same
priority access to MTFs as younger retirees enrolled in TRICARE Prime.
Senior Prime attracted some retirees”about 3,500”who had not recently
used MTFs; most of these retirees nonetheless cited a preference for
military care. Retirees who were attracted to Senior Prime varied in
their health care coverage before the demonstration. About 30 percent
had had traditional Medicare exclusively. The remainder had had
supplemental insurance coverage in addition to traditional Medicare or
were enrolled in a civilian Medicare managed care plan.[Footnote 18]
Table 3: Most Enrollees Cited Military Care as a Reason for Enrolling
in Senior Prime:
Reason: I receive high quality health care at military health care
facilities;
Percentage who cited as a reason for enrolling[A]: 82%;
Percentage who cited as the main reason for enrolling[B]: 36%.
Reason: I prefer military health care over nonmilitary health care;
Percentage who cited as a reason for enrolling[A]: 81%;
Percentage who cited as the main reason for enrolling[B]: 28%.
Reason: The military health care facility is the most convenient place
for me to receive care;
Percentage who cited as a reason for enrolling[A]: 76%;
Percentage who cited as the main reason for enrolling[B]: 14%.
Reason: I will be able to get appointments at military health care
facilities more easily;
Percentage who cited as a reason for enrolling[A]: 56%;
Percentage who cited as the main reason for enrolling[B]: 4%.
Reason: The doctors have a good reputation;
Percentage who cited as a reason for enrolling[A]: 55%;
Percentage who cited as the main reason for enrolling[B]: 1%.
Reason: It will save me money on health care;
Percentage who cited as a reason for enrolling[A]: 54%;
Percentage who cited as the main reason for enrolling[B]: 8%.
Reason: I will have better benefits or coverage;
Percentage who cited as a reason for enrolling[A]: 52%;
Percentage who cited as the main reason for enrolling[B]: 3%.
Notes: Retirees were asked why they wanted to enroll in Senior Prime
and were given a list of possible reasons as well as an "Other" option
in which they could write their own answers. Retirees first circled as
many reasons as applied to them and then indicated which was their
main reason for enrolling. These data are from our survey of enrollees
at the start of the demonstration. Retirees who enrolled later in the
demonstration, including age-ins from TRICARE Prime, gave similar
reasons for joining the program. Many also indicated that they had
done so because it was easy to move to Senior Prime from TRICARE Prime
or because they had liked TRICARE Prime.
[A] Percentages do not add to 100 because respondents could select
more than 1 reason.
[B] Percentages do not add to 100 because only the top 7 reasons are
listed.
Source: GAO survey of military retirees.
[End of table]
Although less important than the link to military care, other features
of Senior Prime also appealed to retirees. The program's low cost-
sharing was attractive to retirees; about half of enrollees saw
joining Senior Prime as a way to save money on health care expenses.
This was true even though many enrollees had only minimal out-of-
pocket costs before joining the program, due in part to their use of
free MTF care. In addition, about half of enrollees saw joining Senior
Prime as a way to obtain improved health care benefits or coverage.
After enrolling in Senior Prime, retirees reported that they were able
to get the care that they needed at little expense. When asked what
they liked about Senior Prime, the majority of enrollees cited access-
related features such as the ability to get all the care that they
needed and the ability to get appointments when needed. (See table 4.)
This is not surprising, given that enrollees had more hospital stays
and outpatient visits than before the demonstration and used
significantly more services than their Medicare fee-for-service
counterparts. Enrollees also reported that they received good care at
their MTFs and that they liked their MTF doctors. Despite their heavy
use of services, most enrollees also were pleased with the low cost of
their care. They reported few financial barriers to obtaining care and
that their spending on health care services was minimal. About two-
thirds of enrollees reported no out-of-pocket costs; their costs were
low even at smaller sites where network care, which required
copayments, was more common.
Table 4: Enrollees Cited Access to Care, Low Cost-Sharing as Positive
Features of Senior Prime:
Reason: I get all the care that I need;
Percentage who cited as something they liked about Senior Prime[A]:
88%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 22%.
Reason: I do not have to pay (or pay very much) for care;
Percentage who cited as something they liked about Senior Prime[A]:
81%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 7%.
Reason: I am able to get an appointment when needed;
Percentage who cited as something they liked about Senior Prime[A]:
81%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 13%.
Reason: I do not have to submit bills;
Percentage who cited as something they liked about Senior Prime[A]:
81%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 2%.
Reason: When I go for appointments, I do not wait long;
Percentage who cited as something they liked about Senior Prime[A]:
79%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 2%.
Reason: I like my primary care doctor;
Percentage who cited as something they liked about Senior Prime[A]:
77%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 7%.
Reason: The MTF is convenient to where I live;
Percentage who cited as something they liked about Senior Prime[A]:
74%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 3%.
Reason: I like seeing MTF doctors;
Percentage who cited as something they liked about Senior Prime[A]:
73%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 6%.
Reason: I receive good care at the MTF;
Percentage who cited as something they liked about Senior Prime[A]:
71%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 23%.
Reason: Senior Prime is less expensive than civilian care;
Percentage who cited as something they liked about Senior Prime[A]:
69%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 3%.
Reason: I can get all my care at MTFs;
Percentage who cited as something they liked about Senior Prime[A]:
67%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 8%.
Reason: I like specialists at the MTF;
Percentage who cited as something they liked about Senior Prime[A]:
57%.
Percentage who cited as the main thing they liked about Senior
Prime[B]: 2%.
Notes: Toward the end of the demonstration, retirees were asked what
they liked about Senior Prime and were given a list of possible items
as well as an "Other" option in which they could write their own
answers. Retirees first circled as many items as applied to them and
then indicated which was the main item.
[A] Percentages do not add to 100 because respondents could select
more than 1 reason.
[B] Percentages do not add to 100 due to rounding.
Source: GAO survey of military retirees.
[End of table]
Once enrolled, relatively few retirees decided to leave Senior Prime”
another indication of enrollees' satisfaction with the program. Early
in the demonstration, the enrollment rates were relatively low
compared with other Medicare managed care plans.[Footnote 19]
Disenrollment remained low throughout the demonstration, averaging
about 2 percent during the last year of the initial demonstration
period.
Although retirees generally were positive about Senior Prime, some
reported difficulties. Over 70 percent of enrollees reported that
there was nothing about the program that they disliked. Very few
enrollees reported that they did not like their doctors, that they did
not get good care at MTFs, or that Senior Prime refused them
treatment. However, 13 percent of enrollees reported that they did not
like having to wait too long to get an appointment, 13 percent cited
not being able to see the same primary care doctor every time, and 8
percent cited difficulty making appointments. In addition, among those
few who disenrolled from Senior Prime, the most commonly cited reasons
for doing so were these same three access-related difficulties as well
as the inability to use regular Medicare benefits while enrolled in
the program”that is, the inability to have Medicare pay for services
not authorized by Senior Prime.
Most Nonenrollees Were Satisfied with Their Existing Health Coverage:
Most retirees who did not enroll in Senior Prime reported that they
were already satisfied with their existing health care coverage, and
few cited negative attitudes about military care. When asked why they
did not try to enroll in Senior Prime, over 60 percent of nonenrollees
cited satisfaction with their current coverage. (See table 5.) About
one-third said they did not have enough information about Senior Prime
or did not understand it. Although the sites used many means of
providing information about Senior Prime to local retirees, many
retirees surveyed early in the demonstration had not previously heard
of the program. The lack of information about Senior Prime remained an
issue later in the demonstration as well; at the end of the
demonstration, many retirees still reported this as one reason for not
wanting to enroll. Other major reasons for not enrolling included not
wanting to join a managed care organization and the belief that Senior
Prime might not be permanent.[Footnote 20] Few nonenrollees”about 9
percent”reported that they decided not to join Senior Prime because
they disliked military care.
Table 5: Most Nonenrollees Were Satisfied with Their Current Coverage:
Reason: I am satisfied with my current coverage;
Percentage who cited as a reason for not enrolling[A]: 62%;
Percentage who cited as the main reason for not enrolling[B]: 44%.
Reason: I have not received enough information on Senior Prime;
Percentage who cited as a reason for not enrolling[A]: 30%;
Percentage who cited as the main reason for not enrolling[B]: 13%.
Reason: I do not understand Senior Prime;
Percentage who cited as a reason for not enrolling[A]: 30%;
Percentage who cited as the main reason for not enrolling[B]: 11%.
Reason: I do not want to join a managed care organization;
Percentage who cited as a reason for not enrolling[A]: 24%;
Percentage who cited as the main reason for not enrolling[B]: 10%.
Notes: Retirees were asked why they did not try to enroll in Senior
Prime and were given a list of possible reasons as well as an "Other"
option in which they could write their own answers. Retirees first
circled as many reasons as applied to them and then indicated which
was their main reason for not enrolling. These data are from our
survey at the start of the demonstration. Retirees who became eligible
later in the demonstration cited similar reasons for not enrolling.
[A] Percentages do not add to 100 because respondents could select
more than 1 reason.
[B] Percentages do not add to 100 because only the top 4 reasons are
listed.
Source: GAO survey of military retirees.
[End of table]
Nonenrollees' access to care was generally unaffected by the
demonstration, but among the minority who had previously relied on
military care, most experienced reduced access to MTFs.[Footnote 21]
When asked at the start of the demonstration why they had not joined
Senior Prime, many of the nonenrollees”almost 40 percent”who were
later "crowded out" of MTFs had said that they were able to get
military health care when they needed it. This suggests that they did
not foresee that space-available care would decline as a result of the
demonstration. By the end of the demonstration, about 20 percent of
those who were crowded out had tried to join Senior Prime. However,
most sites had reached their enrollment caps, and retirees who applied
after the caps were reached were placed on a waiting list.
Demonstration Underscored Challenges in Managing Care and Costs Within
the Military Health System:
While the demonstration had positive results for enrollees, it also
highlighted several challenges that confront the military health
system in managing patient care and costs. The high costs generated by
enrollees' care revealed the need to deliver care more efficiently. In
addition, difficulties encountered in obtaining and managing data
during the demonstration underscored problems that DOD officials
generally face in monitoring patient care and costs. Finally, the
demonstration illustrated the tensions between the military health
system's commitment to care for active-duty personnel and support
military operations and its commitment to provide care to civilian
family members and retirees.
High Senior Prime Costs Are Associated with Weak Incentives for
Managing Care:
Senior Prime's experience revealed the need to deliver care more
efficiently, and differences in sites' utilization suggested that this
might be possible. Although DOD satisfied its new senior enrollees and
gave them good access to care, it incurred high costs in doing so.
[Footnote 22] These high costs were largely due to enrollees' heavy
use of medical services, which substantially exceeded that of
comparable Medicare beneficiaries.[Footnote 23] If DOD had delivered
fewer services, it is possible that enrollees would have been less
satisfied. However, we found that the number of outpatient visits by
enrollees affected their satisfaction with care only slightly.
Furthermore, substantial site differences in utilization”with little
difference in enrollee satisfaction”provide evidence that some sites
were able to satisfy enrollees with fewer services and, consequently,
lower costs. This suggests that other sites could have reduced
utilization somewhat without sacrificing enrollee satisfaction.
Although sites' costs varied, managers at all sites faced similar
disincentives to containing utilization and costs. MTFs generally
tried to restrain inappropriate utilization, but basic features of the
military health system's financial and management practices weakened
their incentives to moderate utilization and costs. First, while MTFs
cannot spend more than their budget, several factors act as safety
valves for budgetary pressure:
* The primary factor is space-available care: when resources required
for enrollees increase, space-available care declines and those who
are not enrolled are less able to get MTF care. This was observed
during the demonstration: as Senior Prime enrollment climbed, the
amount of space-available care provided to nonenrolled seniors
decreased. (See figure 1.)
Figure 1: As Senior Prime Enrollment Grew, Space-Available Care
Declined:
[Refer to PDF for image: multiple line graph]
The graph plots the amount of space-available care (dollars in
thousands) and: Senior Prime enrollment during the time period of
January 1999 through December 2000.
Note: Space-available care is expressed as a centered 3-month moving
average.
Source: GAO analysis of Databook for TRICARE Senior Prime
Demonstration Sites (Washington, D.C.: DOD, Aug. 10, 2001).
[End of table]
* MTFs can request supplemental funding from their respective
services. During the demonstration, every MTF requested supplemental
funding either for Senior Prime specifically or for the MTF generally,
and all received some added funds. Although MTFs cannot always count
on receiving such funding, the potential to obtain extra funds reduces
incentives for moderating utilization.
* MTFs can try to defer some utilization until the following fiscal
year”for example, by postponing elective surgery or issuing
prescriptions on a 60-day rather than a 90-day basis. At the end of
fiscal year 2000, officials from several sites told us that they were
considering this approach to staying within their budgets, and at the
time of our visits at least one had implemented it.
Second, MTFs have no direct financial incentive to manage care
purchased from the civilian network. At the local level, MTF providers
refer patients for services that, depending on MTF resources and
capacity, may be obtained from network providers. However, MTFs are
not directly responsible for the costs of network claims; DOD funds
purchased care centrally, thereby reducing sites' incentive to trim
unnecessary network utilization.[Footnote 24] An additional factor
unique to the demonstration was the lack of incentives for the managed
care support contractors to limit utilization in Senior Prime. Under
the demonstration, these contractors authorized network services but
bore no risk for the costs of enrollees' care. Consequently, they had
no financial incentive to limit use of specialists
and other civilian network providers.[Footnote 25]
Third, Senior Prime's low cost-sharing, although beneficial for
enrollees, limited DOD's ability to control utilization and costs.
Research has shown that patients tend to use more care when their out-
of-pocket expenses are low.[Footnote 26] Therefore, copayments tend to
encourage patients to curb their use of health care services. In
Senior Prime, however, there were few financial incentives for
enrollees to reduce their use of health care services. Enrollees had
no annual deductible; furthermore, care within MTFs, where most
services were delivered, was free and copayments for visits to network
providers were small.[Footnote 27]
Finally, practice patterns among military physicians may also explain
part of the high costs and utilization seen in Senior Prime. High
utilization is not unique to the demonstration: studies have shown
that the military health system has higher utilization than the
civilian sector.[Footnote 28] As with civilian physicians, military
physicians' training, experience, and the practice style of their
colleagues affect their use of procedures and tests, their readiness
to hospitalize patients, as well as their recommendations to patients
about follow-up visits and referrals to specialists.[Footnote 29]
Limitations in Data and Data Systems Posed Problems for DOD Managers:
Although DOD was able to establish and operate the demonstration, its
efforts were hampered by limitations in its data and data systems.
Throughout the demonstration, officials had difficulty producing
reliable, timely, and comprehensive information on retirees' care.
This hampered their ability both to implement the demonstration's
payment mechanism and to monitor enrollees' health care costs and
utilization.
DOD's experience with the demonstration's payment mechanism
illustrated DOD's problems with data and data systems. At the
beginning of the demonstration, DOD needed to determine the cost of
the care that participating MTFs had provided to military retirees
prior to Senior Prime”an amount referred to as DOD's baseline level of
effort or LOE. This step was critical in determining how much payment,
if any, DOD would earn from Medicare. However, DOD's data systems did
not permit it to isolate the costs of retirees' previous MTF care, and
DOD had to undertake a substantial effort to estimate its baseline LOE”
an effort made more difficult by deficiencies in the source data on
MTF costs. The payment mechanism also required DOD to collect
information on enrollees' inpatient and outpatient diagnoses to
determine whether enrollees were significantly more or less healthy
than other Medicare beneficiaries”in which case, Medicare's payment to
DOD would be adjusted. DOD and HCFA agreed to use a method of
assessing enrollees' health status that involved both inpatient and
outpatient data. DOD took over 1 year to assemble the final data and
later stated that the outpatient data may have omitted certain items
and may have contained coding errors. Overall, although DOD completed
the tasks necessary to implement the payment mechanism, its efforts
consumed considerable time and resources due to data problems.
DOD's data systems were not well-suited to monitoring health care
costs and utilization”an impediment to effective management. At the
local level, data limitations reduced site officials' ability to
monitor Senior Prime costs. At first, the sites operated with little
information on the costs of enrollees' care. For care provided at
MTFs, sites' data systems could not isolate costs specific to Senior
Prime enrollees. For care provided outside MTFs, claims submitted by
network providers recorded the costs of civilian care, but there were
delays between the time services were provided and when complete
claims data were available. About 1 year into the demonstration, cost
information available to site officials improved. In the fall of 1999,
DOD's TRICARE Management Activity (TMA)[Footnote 30] office began
distributing periodic Senior Prime databooks, which provided
information on enrollment, utilization, cost, and satisfaction for
each site.[Footnote 31] Sites found that these databooks were a useful
resource; for the first time, they were able to compare their sites'
costs to the Senior Prime capitation rate. However, neither the
databooks nor the systems on which they were based permitted the sites
to identify the cases or practices that led to high costs. Moreover,
the information was not timely”the lag was usually 6 months or more”
and changed over time as problems in underlying data and calculations
were identified and corrected. For example, the databook reports on
the costs of enrollees' care changed repeatedly as mistakes were
uncovered and corrected, reducing confidence in comparisons to the
Senior Prime capitation rate.
Data limitations also hindered officials' ability to monitor
enrollees' use of health care services. Sites had information on
utilization, but had difficulty integrating data from MTF and network
providers and encountered data of questionable accuracy. These
problems undermined the ability of managers and physicians to obtain a
comprehensive picture of the care provided to individuals or to groups
of patients. In addition, site officials told us they had some
difficulties using benchmark utilization rates from civilian managed
care to help understand the patterns in Senior Prime utilization. They
were sometimes uncertain about the quality and credibility of the
underlying data used to generate Senior Prime measures, and often
found that comparisons between Senior Prime and civilian rates were
distorted by differences in clinical and coding practices.[Footnote
32] Comparisons between the sites were also problematic. Some
officials cited differences in coding practices as a partial
explanation of site differences in utilization rates.
While DOD is making efforts to improve its data and data systems, its
fundamental data problems are pervasive and persistent. Key data-
related difficulties include inaccurate and incomplete data, systems
that produce usable data only after substantial delays, and the
inability to segregate costs for particular patient groups, such as
seniors. In addition, DOD's separate, unconnected systems for
recording inpatient and outpatient MTF care, and for MTF and network
care, complicate data collection and analysis. Most important, the
lack of strong incentives for MTFs to achieve efficiency in delivering
care reduces officials' demand for improved data and related tools.
Officials told us about efforts to improve data and data systems, some
resulting directly from the demonstration. The demonstration's
requirements for reporting quality and cost information, including the
need for MTF commanders to certify data submitted to HCFA, led to
increased scrutiny of data systems by national and local managers.
Officials at several sites noted that the demonstration had stimulated
MTF efforts to generate better data, for example, by more accurately
recording and coding patient visits and diagnoses. In addition, DOD's
new Data Quality Management Control program, initiated in November
2000, introduced data quality as a formal management objective and
made MTF commanders more accountable for their data.[Footnote 33] It
is too early to tell whether DOD's recent efforts to make MTFs more
accountable for data quality will have an impact that is systemwide
and sustained. Although the new data quality program may give MTF
managers added reason to improve their data, it does not alter their
incentives for using those data.
Demonstration Illustrated Tension between Military Mission and
Civilian Care Responsibilities:
The demonstration illustrated a central challenge confronting the
military health system: dealing with the tensions that arise from its
commitment to support military operations and care for active-duty
personnel while providing care for their family members and retirees.
As part of its mission, the military health system is responsible for
medical support of military deployments, from small humanitarian
engagements to major military actions. The military health system must
ensure that clinicians and other medical personnel have the skills
they need when deployed and must maintain the health of active-duty
personnel. Like other large employers, DOD also provides health care
coverage for the families of active-duty personnel and for retirees.
Unlike most other employers, DOD provides much of its beneficiaries'
care in its own facilities. Overall, MTFs' experiences during the
demonstration highlighted ways in which the provision of care to
civilians, in particular older retirees, can both support and hinder
the military mission. It also illustrated the ways in which that
mission complicates the delivery of civilian care.
Senior Prime demonstrated that providing care to civilian
beneficiaries can contribute to the mission of providing medical
support for military operations. According to DOD, during wartime and
peacetime military operations (such as humanitarian or peacekeeping
missions), most cases encountered are commonplace medical or surgical
conditions, not complex illnesses or injuries requiring specialized
skills. Consequently, clinicians with broad general training and
experience are able to manage most conditions they are likely to see.
However, clinicians supporting military operations are likely to
encounter some complex medical and surgical cases. They therefore need
experience with patients requiring complex care”rather than young,
generally healthy adults and children requiring routine care”to ensure
that they are prepared to provide complex care in the field.[Footnote
34] Senior Prime illustrated how seniors can contribute to the skills
needed for deployment. MTF officials reported that enrollees gave
medical staff experience with conditions that are relevant to both
wartime and peacetime operations but are not typically seen among
younger patient groups. Although the underlying causes of illness and
injury differed from what would occur on the battlefield, seniors'
needs for complex care, such as vascular and orthopedic surgery and
intensive care, helped prepare staff to treat complex cases while
deployed. Treating seniors also prepared staff for humanitarian
missions, on which they may encounter individuals who are older or who
have chronic conditions.[Footnote 35]
However, as Senior Prime also demonstrated, providing civilian care
can interfere with an MTF's efforts to meet its military medical
mission. Not all services provided to civilians contribute directly to
providers' preparedness for deployment. For example, according to
officials at one MTF, under Senior Prime some specialists were
providing more routine care to seniors and seeing fewer of the complex
cases important for training, compared to before the demonstration. In
addition, MTFs' responsibility for primary care influenced the
selection of medical staff for deployments. Several MTFs chose to
deploy specialists or others who were not primary care managers,
rather than disrupt primary care teams and patients. In this way,
civilian care posed a constraint for officials in meeting their
primary mission. Finally, increased demands for care among civilian
beneficiary groups have the potential to affect the care of active-
duty personnel”the primary population that the military health system
is intended to serve. Although active-duty personnel receive priority
for MTF care, the assignment of MTF appointment slots to civilians can
affect how quickly active-duty personnel get care.[Footnote 36] During
the demonstration, officials found little evidence that, at its small
scale, Senior Prime had led to a decline in active-duty personnel's
access to care or satisfaction with care.[Footnote 37] However,
several officials either expressed concern that continued growth in
the program could cause difficulties in the future or noted the strain
resulting from MTFs' commitment to both active-duty and other patient
groups.
Conversely, the demonstration illustrated ways in which the military
mission complicates civilian care and can increase costs. Medical
personnel absences due to deployments, readiness training, and
rotations complicated MTFs' efforts to ensure enrollees' access to and
continuity of care, although the extent varied by site. During the
demonstration, MTFs experienced temporary shortages in personnel
important for seniors' care, including nursing staff and key
specialists. Officials took steps to mitigate the effect of these
absences on patient care, and enrollees had good access to care
overall. However, they were not always able to see the same provider
and at times were referred to civilian providers.[Footnote 38]
Personnel absences had implications not only for patient care but also
for DOD's costs, particularly when care had to be purchased from
network providers. These costs could be significant if personnel
absences occurred in large numbers or were extended over a long period.
Concluding Observations:
While the demonstration showed that DOD's new MTF-based health plans
could attract and satisfy military retirees, it also highlighted
challenges that DOD encountered in doing so. The issues DOD
encountered in launching and implementing Senior Prime leave open the
question of whether the program could have been successfully
implemented on a larger scale. Although DOD has chosen not to continue
Senior Prime, the demonstration offers lessons about managing the care
of seniors and other beneficiary groups.
The challenges revealed by the demonstration relate to DOD's
management of health care delivery and costs within the broader
military health system:
* The high utilization and costs observed during the demonstration
underscore the importance of designing incentives and management
practices within DOD that promote efficient care”that is, the delivery
of appropriate care and improved health outcomes while discouraging
inappropriate utilization and costs.
* As the demonstration illustrated, limitations in DOD data and
information systems, as well as weak incentives for greater
efficiency, are obstacles to managing military beneficiaries' health
care use and costs. Data analysis could help managers target clinical
and financial areas needing improvement.
* The demonstration highlighted a strategic issue facing the military
health system: how to reconcile its commitment as an employer to
provide care to the families of active-duty personnel as well as
retirees with its responsibility to provide medical support for
military operations.
Agency Comments:
We provided DOD and CMS an opportunity to comment on a draft of this
report, and both agencies provided written comments. DOD said that the
report identified some of the challenges it faced in implementing and
managing the demonstration and that the report appropriately noted
limitations in the generalizability of its findings. DOD commented
that one statement”that difficulties in producing information on
retirees' care hampered its ability to implement the demonstration's
payment mechanism”was only partially true and somewhat misleading. DOD
asserted that the Senior Prime databooks were reasonably timely and
reliable and that, once DOD and CMS had agreed on financial policies,
the payment mechanism was implemented without significant
difficulties. In response to our statement that DOD took over 1 year
to assemble the data needed for risk adjustment, DOD emphasized that
delays in the risk adjustment process were largely beyond its control.
Regarding our statement that DOD's data systems were not well-suited
to monitoring health care costs and utilization, DOD stated that its
data systems, although not capable of providing all data that might be
desired, adequately showed that utilization and costs were high. DOD
further stated that high costs and utilization are more attributable
to the benefit structure, financial incentives for MTFs, high
administrative costs, and MTF practice and capacity issues than to
data system weaknesses. Finally, in response to our statement that
limitations in DOD data systems are obstacles to managing military
beneficiaries' health care use and costs, DOD stated that, while it is
true that MTFs have weak incentives for greater efficiency, the focus
on information systems as a primary cause of high costs and
utilization is misleading. DOD said that data analysis targeted
clinical and financial areas needing improvement early in the
demonstration, but noted that systematically responding to clinical
and financial issues across multiple services and MTFs is still a
problem.
As noted earlier, the Senior Prime databooks were a useful source for
site officials in monitoring sites' performance. However, sites did
not start receiving the databooks until about a year into the
demonstration, and lags affecting the databooks' information limited
their usefulness. Moreover, frequent changes in reported costs reduced
site officials' confidence in the data. Regarding the demonstration's
payment mechanism, it required DOD to collect information on
enrollees' inpatient and outpatient diagnoses before the risk
adjustment process could begin. Assembling the data was DOD's
responsibility and under its control. We cited the time and effort
required for DOD to assemble the data as an illustration of its
broader difficulties with data and data systems. Concerning DOD's data
and data systems, although they showed that the demonstration was
generating high costs and utilization, neither the Senior Prime
databooks nor the systems on which they were based permitted the sites
to identify cases or practices that led to high costs. Finally, we do
not cite data system limitations as a primary cause of Senior Prime's
high costs and utilization. However, as the demonstration showed,
DOD's data limitations are obstacles to managing patient care and
costs.
CMS said that the report was accurate and met its objectives. CMS
provided technical comments, which we incorporated where appropriate.
(DOD's and CMS's comments appear in appendixes BI and IV,
respectively.)
We are sending copies of this report to the secretaries of defense and
health and human services and the administrator of the Centers for
Medicare and Medicaid Services. We will make copies available to
others upon request.
If you or your staffs have questions about this report, please contact
me at (202) 512-7114. Other GAO contacts and staff acknowledgments are
listed in appendix V.
Signed by:
William J. Scanlon:
Director, Health Care Issues:
[End of section]
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John Warner:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Max Baucus:
Chairman:
The Honorable Charles E. Grassley:
Ranking Minority Member:
Committee on Finance:
United States Senate:
The Honorable Bob Stump:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable W.J. 'Billy' Tauzin:
Chairman:
The Honorable John D. Dingell:
Ranking Minority Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable William M. Thomas:
Chairman:
The Honorable Charles B. Rangel:
Ranking Minority Member:
Committee on Ways and Means:
House of Representatives:
[End of section]
Appendix I: Methodology for Evaluating the Subvention Demonstration:
In directing us to evaluate the demonstration, the BBA specified that
we study three broad areas: the demonstration's effects on
beneficiaries, its costs to DOD and Medicare, and difficulties that
DOD encountered in managing the demonstration. To address these
topics, we surveyed retirees living in the demonstration areas,
visited the demonstration sites, interviewed DOD and HCFA officials,
and analyzed administrative data and reports from both agencies.
Survey of Retirees:
To determine the demonstration's appeal to and effect on military
retirees, including why they chose to enroll and their satisfaction
with care, we conducted a two-phase mail survey of about 20,000
retirees living in the demonstration areas. The survey was sent to
Senior Prime enrollees and to retirees who were eligible for Senior
Prime but did not join. We surveyed retirees at the beginning of the
demonstration to collect information on their health care experiences
before Senior Prime. Toward the end of the initial demonstration
period, we resurveyed these retirees to measure changes from their
earlier reports. In this second phase, we also surveyed those who had
joined Senior Prime since the first survey and those who had become
eligible for Senior Prime but had not joined.[Footnote 39]
Site Visits and Interviews with DOD and HCFA Officials:
To collect information on the demonstration's implementation and
operation, we interviewed officials and reviewed documents that we
obtained during two rounds of visits to the demonstration sites. We
first visited the sites within 3 months after each had begun
operations to assess their status during the start-up phase and to
examine the issues that had emerged in planning and implementing
Senior Prime. We conducted follow-up visits about 15 months later.
This allowed us to observe the sites at a more mature stage. We
examined the demonstration's status, effects on beneficiaries and
providers, and other key management issues. We also conducted
additional interviews with DOD and HCFA officials.[Footnote 40]
Retirees‘ Health Care Utilization and Costs to DOD:
To evaluate retirees' health care use and costs under the
demonstration, we conducted several analyses using administrative data
from DOD and HCFA. In analyzing utilization, we compared enrollees'
use of services with that of Medicare fee-for-service beneficiaries in
the same areas, adjusting for the relative health of the two
populations.[Footnote 41] To determine the demonstration's impact on
the cost to DOD of caring for military retirees, we compared average
monthly costs for Senior Prime enrollees to the Senior Prime
capitation rates.[Footnote 42]
[End of section]
Appendix II: Senior Prime Enrollees' Previous Medicare Managed Care Plan
Enrollment:
Senior Prime attracted a substantial number of retirees who had been
enrolled in other Medicare managed care plans just prior to enrolling
in Senior Prime. Overall, about 10,000 seniors left other plans to
join Senior Prime”about 40 percent of all seniors who enrolled in the
program in 1998 and 1999.[Footnote 43] This percentage varied by site,
in part due to local variation in Medicare managed care plan
availability. Some sites, such as San Diego and San Antonio, were
located in areas with significant Medicare managed care presence.
Other sites, such as Texoma and Keesler, were located in areas where
retirees generally had few or no other Medicare managed care options.
Table 6 provides site-level information on Senior Prime enrollees
drawn from other plans. In most cases, plans lost a small number of
their members, but one plan lost over 3,400 members”about 4 percent of
its members who lived in that subvention area.
Table 6: The Percentage of Senior Prime Enrollees Who Switched from
Another Medicare Managed Care Plan Varied by Site:
Demonstration site: Colorado Springs;
Percentage of Senior Prime enrollees from other plans: 58%.
Demonstration site: Dover;
Percentage of Senior Prime enrollees from other plans: 17%.
Demonstration site: Keesler;
Percentage of Senior Prime enrollees from other plans: 2%.
Demonstration site: Madigan;
Percentage of Senior Prime enrollees from other plans: 38%.
Demonstration site: San Antonio area;
Percentage of Senior Prime enrollees from other plans: 51%.
Demonstration site: Texoma area;
Percentage of Senior Prime enrollees from other plans: 1%.
Demonstration site: San Diego;
Percentage of Senior Prime enrollees from other plans: 40%.
Note: These data do not include enrollees who joined Senior Prime upon
turning age 65 and therefore could not have been enrolled in other
Medicare managed care plans before joining the program. The
percentages include all retirees who enrolled in Senior Prime during
1998 or 1999, even if they later disenrolled.
Source: GAO analysis of data from HCFA's Medicare Enrollment Data Base.
[End of table]
[End of section]
Appendix III: Comments From the Department of Defense:
The Assistant Secretary Of Defense:
Health Affairs:
1200 Defense Pentagon:
Washington, DC 20301-1200:
January 30, 2002:
Mr. William J. Scanlon:
Director, Health Care Issues:
U.S. General Accounting Office:
Washington, DC 20548:
Dear Mr. Scanlon:
This is the Department of Defense (DoD) response to the General
Accounting Office (GAO) Draft Report GA0-02-284, "Medicare Subvention
Demonstration: Pilot Satisfies Enrollees, Raises Cost and Management
Issues for DoD Health Care," dated December 19, 2001.
Overall, DoD finds that the report identifies some of the challenges
faced with respect to implementing, administering, and managing the
Medicare Subvention Demonstration. In addition, the GAO appropriately
identifies the shortcomings in the report with respect to the limited
generalization of the findings.
The Department appreciates the opportunity to comment on the draft
report. We have enclosed comments, which we hope will strengthen the
GAO final report.
Please feel free to address any questions to my project officers on
this matter, Dr. Richard D. Guerin, Director, Health Program Analysis
and Evaluation (functional) at (703) 681-3623 or Mr. Gunther J.
Zimmerman (GAO/IG Liaison) at (703) 681-7889.
Sincerely,
Signed by:
William Winkenwerder, Jr., MD:
Enclosure: As stated:
GAO Draft Report ” Dated December 19, 2001 (GAO 02-284):
Medicare Subvention Demonstration: Pilot Satisfies Enrollees, Raises
Cost and Management Issues for DoD Health Care:
Department Of Defense Comments:
The draft report contains no recommendations, however, the Department
would like to offer several comments and observations regarding the
report.
Page 4, first paragraph: "Officials had difficulty producing reliable,
timely, and complete information on retiree's care. This hampered
their ability to implement the demonstration's complex payment
mechanism...."
Comment: This statement is only partially true and somewhat
misleading. Within the context of claims-based data, the TSP Databooks
were reasonably timely and generally reliable. The payment mechanism
was implemented without any significant difficulties once the
financial policies were agreed upon by DoD and CMS. The only extended
delay in the financial mechanism occurred due to delays in the risk
adjustment process controlled by CMS.
Page 20, last paragraph: "DoD took over one year to assemble the final
data...." [Now on p. 22]
Comment: As stated above, delays in the risk adjustment process were
largely out of the control of DoD. The risk adjustment was conducted
by Fu Associates under contract to CMS.
Page 21, first paragraph: "DoD's data systems were not-well suited to
monitoring health care costs and utilization - an impediment to
effective management." [Now on p. 23]
Comment: While DoD's data systems are not capable of providing all
data that might be desired, they adequately and quite early in the
demonstration revealed that utilization and costs were high. Problems
of high cost and utilization are more attributable to the benefit
structure, financial incentives on the MTFs, high administrative
costs, and MTF practice and capacity issues than they are to data
system weaknesses.
Page 25, last paragraph: "...limitations in DoD data and information
systems...are obstacles to managing military beneficiaries' health
care use and costs. Data analysis could help managers target clinical
and financial areas needing improvement." [Now on p. 28]
Comment: While it is true that MTFs have weak incentives for greater
efficiency, the focus on information systems as a primary cause of
high costs and utilization is misleading. Data analysis did target
clinical and financial areas needing improvement quite early in the
demonstration. Systematically responding to clinical and financial
issues across multiple Services and MTFs is a problem yet to be
resolved.
[End of section]
Appendix IV: Comments From the Centers for Medicare and Medicaid
Services:
Department Of Health & Human Services:
Centers for Medicare & Medicaid Services:
Administrator:
Washington, DC 20201:
Date: January 15, 2002:
To: William J. Scanlon:
Director, Health Care Issues:
General Accounting Office:
From: [Signed by] Thomas A. Scully:
Administrator:
Centers for Medicare & Medicaid Services:
Subject: General Accounting Office (GAO) Draft Report "Medicare
Subvention: Pilot Satisfies Enrollees, Raises Cost and Management
Issues for DOD Health Care," (GAO-02-284):
We appreciate the opportunity to review and comment on the above-
referenced report.
The GAO's objectives were to describe the Department of Defense (DOD)
Medicare subvention demonstration's appeal to beneficiaries and the
management difficulties DOD encountered in managing patient care and
costs. We have no comments on the report's conclusions. We find the
report to be accurate throughout and we believe it fully satisfies the
objectives.
We look forward to working with GAO on this and other issues.
[End of section]
Appendix V: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Phyllis Thorburn, (202) 512-7012:
Jonathan Rather, (202) 512-7107:
Staff Acknowledgments:
In addition to those named above, Robin Burke, Martha Wood, Jessica
Farb, Maria Kronenburg, Gail MacColl, Dae Park, Lisa Rogers, and Eric
Wedum contributed to this report.
[End of section]
Related GAO Products:
Medicare Subvention Demonstration: DOD Costs and Medicare
Spending [hyperlink, http://www.gao.gov/products/GAO-02-67], Oct. 31,
2001.
Medicare Subvention Demonstration: Greater Access Improved Enrollee
Satisfaction but Raised DOD Costs [hyperlink,
http://www.gao.gov/products/GAO-02-68], Oct. 31, 2001.
Medicare Subvention Demonstration: DOD's Pilot HMO Appealed to
Seniors, Underscored Management Complexities [hyperlink,
http://www.gao.gov/products/GAO-01-671], June 14, 2001.
Defense Health Care: Observations on Proposed Benefit Expansion and
Overcoming TRICARE Obstacles [hyperlink,
http://www.gao.gov/products/GAO/T-HEHS/NSIAD-00-129], Mar. 15, 2000.
Medicare Subvention Demonstration: Enrollment in DOD Pilot Reflects
Retiree Experiences and Local Markets [hyperlink,
http://www.gao.gov/products/GAO/HEHS-00-35], Jan. 31, 2000.
Defense Health Care: Appointment Timeliness Goals Not Met; Measurement
Tools Need Improvement [hyperlink,
http://www.gao.gov/products/GAO/HEHS-99-168, Sept. 30, 1999.
Medicare Subvention Demonstration: DOD Start-up Overcame Obstacles,
Yields Lessons, and Raises Issues [hyperlink,
http://www.gao.gov/products/GAO/GGD/HEHS-99-161], Sept. 28, 1999.
Medicare Subvention: Challenges and Opportunities Facing a Possible VA
Demonstration [hyperlink,
http://www.gao.gov/products/GAO/T-HEHS/GGD-99-159], July 1, 1999.
Medicare Subvention Demonstration: DOD Data Limitations May Require
Adjustment and Raise Broader Concerns [hyperlink,
http://www.gao.gov/products/GAO/HEHS-99-39], May 28, 1999.
Medicare Subvention Demonstration: DOD Experience and Lessons for
Possible VA Demonstration [hyperlink,
http://www.gao.gov/products/GAO/T-HEHS/GGD-99-119], May 4, 1999).
[End of section]
Footnotes:
[1] Throughout this report, we use the term "retirees" to refer to
military retirees and their dependents and survivors aged 65 and over,
unless otherwise noted.
[2] "Subvention" means a transfer of money from one federal department
to another.
[3] P.L. 105-33, sec. 4015, 111 Stat. 251, 337 (42 USC 1395ggg).
[4] P.L. 106-398, sec. 712, 114 Stat. 1654, 1654A-176.
[5] Although the demonstration was extended for 1 year, our evaluation
is confined to the initial demonstration period, which ended December
31, 2000.
[6] A list of related GAO products is included at the end of this
report.
[7] On June 14, 2001, the secretary of health and human services
announced that the name of HCFA had been changed to the Centers for
Medicare and Medicaid Services. In this report, we refer to HCFA when
our work and findings apply to the organizational structure and
operations associated with that name.
[8] Although most retirees eligible for the demonstration lived near a
military medical center offering a wide array of specialty care, in
other areas far fewer live near MTFs that offer similar services.
[9] TRICARE Plus was implemented on October 1, 2001. It gives
enrollees access to MTF primary care providers but does not guarantee
them access to MTF specialty care. TRICARE Plus will not be
implemented at all MTFs; the availability of TRICARE Plus and the
number of enrollees will be based on MTF commanders' determination of
available capacity.
[10] A small copayment is required for prescriptions filled by mail
order or at civilian pharmacies but not for prescriptions filled at
MTFs.
[11] Beneficiaries who turned age 65 prior to April 1, 2001,
automatically qualify for this benefit. Those who turned age 65 on or
after that date must be enrolled in Medicare part B to obtain the
pharmacy benefit.
[12] Although DOD could charge enrollees a premium for Senior Prime,
as any Medicare+Choice organization can, it chose not to do so.
[13] GME payments cover Medicare's share of teaching hospital expenses
incurred in training medical interns and residents. DSH payments
assist hospitals that treat a disproportionate number of uninsured and
indigent patients.
[14] See Medicare Subvention Demonstration: DOD Costs and Medicare
Spending [hyperlink, http://www.gao.gov/products/GAO-02-67], Oct. 31,
2001, for a description of how Medicare's final payment to DOD is
determined.
[15] Most retirees eligible to age-in did so. Although enrollment at
each MTF was capped, age-ins were not counted against the caps.
Consequently, after most MTFs had reached or approached their caps,
the majority of new enrollees were age-ins.
[16] For a discussion of site variation in enrollment at the beginning
of the demonstration, see Medicare Subvention Demonstration:
Enrollment in DOD Pilot Reflects Retiree Experiences and Local Markets
[hyperlink, http://www.gao.gov/products/GAO/HEHS-00-35], Jan. 31, 2000.
[17] This requirement did not apply to retirees who had been Medicare-
eligible since July 1, 1997, a little over a year before the program
began.
[18] This includes enrollment in a Medicare managed care plan,
Medicare supplemental insurance, and employer-sponsored insurance. The
estimate excludes enrollees who aged-in from TRICARE Prime. For
details on enrollees' prior membership in Medicare managed care plans,
see appendix II.
[19] See [hyperlink, http://www.gao.gov/products/GAO/HEHS-00-35].
[20] In our first survey we did not include the temporary nature of
the demonstration as a reason for not enrolling but found that 2
percent of retirees had written in that reason. In our second survey,
when we included this as a possible reason, we found that over 25
percent of nonenrollees indicated it was a reason for not joining
Senior Prime but only 13 percent said it was their main reason.
[21] See Medicare Subvention Demonstration: Greater Access Improved
Enrollee Satisfaction but Raised DOD Costs [hyperlink,
http://www.gao.gov/products/GAO-02-68], Oct. 31, 2001, for a further
discussion of nonenrollees' access to care under the demonstration.
[22] Costs varied by site. At all sites, average costs exceeded the
local Senior Prime rate by at least 20 percent.
[23] For further discussion of DOD's costs and enrollees' use of
services, see Medicare Subvention Demonstration: DOD Costs and
Medicare Spending [hyperlink, http://www.gao.gov/products/GAO-02-67],
Oct. 31, 2001.
[24] However, DOD encourages MTFs to deliver care in-house when
possible in order to maximize the use of MTFs.
[25] In TRICARE Prime, the managed care support contractors bear part
of the risk for beneficiaries' purchased care costs.
[26] See Physician Payment Review Commission, Annual Report to
Congress, 1997, Chapter 15, and Sandra Christensen and Judy Shinogle,
"Effects of Supplemental Coverage on Use of Services by Medicare
Enrollees," Health Care Financing Review, Fall 1997.
[27] Low cost-sharing is a feature of TRICARE Prime as well, although
its terms differ somewhat from Senior Prime's.
[28] See Susan D. Hosek and others, The Demand for Military Health
Care: Supporting Research for a Comprehensive Study of the Military
Health Care System (Santa Monica, Calif.: RAND, MR-407-PA&E, Jan.
1994), and The Institute for Defense Analysis and Center for Naval
Analysis Corporation, Evaluation of the TRICARE Program FY 1998 Report
to Congress (Washington, D.C.: 1998).
[29] In civilian health care, much of the variation in use of health
care among states and counties is attributed to the clinical practice
styles of their physicians. See W.P. Welch and others, "Geographic
Variation in Expenditures for Physician Services in the United
States," New England Journal of Medicine, Vol. 328, No. 621 (Mar. 4,
1993); John E. Wennberg and Alan Gittelsohn, "Small Area Variations in
Health Care Delivery," Science Vol. 182, No. 4117 (Dec. 1973); and The
Quality of Medical Care in the United States: A Report on the Medicare
Program (American Hospital Association, 1999).
[30] TMA performs TRICARE-wide support functions, such as managing
information technology and data systems and selecting, directing, and
paying the managed care support contractors. TMA officials were
responsible for evaluating and supporting the subvention demonstration.
[31] The databooks were primarily intended for internal use in
monitoring and tracking the program. Compiling the databooks was a
complex task and took a substantial commitment of resources, partly
because staff had to collect and manipulate data from separate and
incompatible data systems. Although they were a mechanism for sharing
information with the sites, according to TMA officials the databooks
were not intended to be a management tool. Nonetheless, they were the
only data available to sites that allowed them to compare their costs
and utilization to those of other sites.
[32] Some sites reported that, despite extensive adjustments to the
data, their measures were not entirely comparable to the civilian
benchmarks.
[33] This program is an outgrowth of a task force DOD established in
1998 partly in response to our report on data limitations relevant to
the demonstration. (See Medicare Subvention Demonstration: DOD Data
Limitations May Require Adjustments and Raise Broader Concerns
[hyperlink, http://www.gao.gov/products/GAO/HEHS-99-39], May 28,
1999.) The task force addressed the military health system's need for
data quality improvements.
[34] See "Concept Paper on Enrollment in TRICARE Plus for MTF
Commanders," TRICARE Management Activity, July 3, 2001.
[35] During the demonstration, some MTFs continued to care for
nonenrolled seniors, in addition to enrollees, to help meet their
training needs.
[36] See Defense Health Care: Appointment Timeliness Goals Not Met;
Measurement Tools Need Improvement [hyperlink,
http://www.gao.gov/products/GAO/HEHS-99-168], Sept. 30, 1999.
[37] See Medicare Subvention Demonstration: DOD's Pilot HMO Appealed
to Seniors, Underscored Management Complexities [hyperlink,
http://www.gao.gov/products/GAO-01-671], June 14, 2001.
[38] Recent events illustrated an additional way in which DOD's
military mission complicates civilian care. In times of enhanced
security at military installations it may be difficult for
beneficiaries to access MTFs. Following the terrorist attacks on the
World Trade Center and the Pentagon, there were reports of military
retirees having difficulty getting care and prescriptions at MTFs in
the Colorado Springs area, due to restricted access to area
facilities. More broadly, The Retired Officers Association (TROA)
notified its members that tightened security at military installations
might limit some beneficiaries' ability to get new or refill
prescriptions at military pharmacies or to see their providers for new
medications. In October 2001, DOD issued guidance for beneficiaries on
seeking emergency, urgent, and routine care when military
installations are under heightened security.
[39] For information on the first survey, see Medicare Subvention
Demonstration: Enrollment in DOD Pilot Reflects Retiree Experiences
and Local Markets [hyperlink,
http://www.gao.gov/products/GAO/HEHS-00-35], Jan. 31, 2000, app. I.
For information on the follow-up survey, see Medicare Subvention
Demonstration: Greater Access Improved Enrollee Satisfaction but
Raised DOD Costs [hyperlink, http://www.gao.gov/products/GAO-02-68],
Oct. 31, 2001, app. I.
[40] For information on our methods, see Medicare Subvention
Demonstration: DOD Start-up Overcame Obstacles, Yields Lessons, and
Raises Issues [hyperlink,
http://www.gao.gov/products/GAO/GGD/HEHS-99-161], Sept. 28, 1999, and
Medicare Subvention Demonstration: DOD's Pilot HMO Appealed to
Seniors, Underscored Management Complexities [hyperlink,
http://www.gao.gov/products/GAO-01-671], June 14, 2001.
[41] For further discussion of our analysis of enrollees' health care
utilization, see Medicare Subvention Demonstration: Greater Access
Improved Enrollee Satisfaction but Raised DOD Costs [hyperlink,
http://www.gao.gov/products/GAO-02-68], Oct. 31, 2001, app. III.
[42] For further discussion of our analysis of the costs of enrollees'
care, see Medicare Subvention Demonstration: DOD Costs and Medicare
Spending [hyperlink, http://www.gao.gov/products/GAO-02-67], Oct. 31,
2001, app. I. We also analyzed Medicare spending on military retirees
under the demonstration. See [hyperlink,
http://www.gao.gov/products/GAO-02-67], app. II.
[43] This percentage does not consider retirees who joined Senior
Prime upon turning 65 and therefore could not have been enrolled in
other plans before joining the program.
[End of section]
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