Military Personnel
Guidance Needed for Any Future Conversions of Military Medical Positions to Civilian Positions Gao ID: GAO-08-370R February 8, 2008Since September 11, 2001, the high pace of military operations has placed significant stress on U.S. operating forces. In late 2003, the Department of Defense (DOD) reported that several studies had found that tens of thousands of military personnel were performing tasks that were not military essential and that these tasks could be performed more cost effectively by civilian or private-sector contract employees. To address this matter, DOD, in fiscal year 2004, began a multiyear initiative to convert military positions, including military health care positions, to federal civilian or contract positions. Within DOD, the Office of the Under Secretary of Defense, Personnel and Readiness (USD, P&R), has overall responsibility for issuing guidance on manpower management, which includes guidance related to determining the least costly mix of military, civilian, and contract personnel. Additionally, the Under Secretary of Defense (Comptroller) (USD (C)) and the Director, Program Analysis and Evaluation (PA&E) play key roles in determining the costs of military, civilian, and contract personnel. For example, the USD(C) is responsible for developing the composite pay rates used in developing military and civilian personnel budgets and PA&E provides leadership in developing and promoting tools, data, and methods for analyzing allocation of resources. USD, P&R also has responsibility for the Defense Health Program, which provides health care to over 9 million beneficiaries--including military servicemembers and retirees and their families and survivors. This program had estimated costs of $21 billion for fiscal year 2007 and DOD officials anticipate further significant growth in these health care costs. In fact, the costs associated with the program have doubled since fiscal year 2000 due to factors such as increased enrollment, medical inflation, and implementation of the TRICARE for Life program.
While the military departments are well under way in converting almost 10,000 military medical positions to civilian positions and have generally addressed the reporting requirements of the law, Congress lacks information from the departments that would help it make decisions on current and future conversions. Although the National Defense Authorization Act for Fiscal Year 2008 places a statutory moratorium on conversions from October 1, 2007, through September 30, 2012, the accelerated growth of the Armed Forces through fiscal year 2010 and the sustained growth of the Defense Health Program will continue to tax the military health system in several areas, including manpower management. As a result, the issue of converting military medical and dental positions to civilian positions might arise again in the near future. Accordingly, we continue to believe that our previous recommendation for the departments to use a consistent, full cost methodology, like that suggested by OSD's PA&E, in any future conversion certifications has merit. Without clear guidance on the use of such a methodology, the departments would be unable to assure Congress that conversions will not increase the cost of medical care. Moreover, without clear guidance on documenting information about, for example, the departments' assessments of the potential effects of conversions on the quality of care, the departments may be unable to support their assessments. If such conversions are to be done, it will be important for Congress to receive sufficient information from the military departments to provide assurances that planned conversions will not increase cost or decrease access to care or quality of care.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-370R, Military Personnel: Guidance Needed for Any Future Conversions of Military Medical Positions to Civilian Positions
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United States Government Accountability Office:
Washington, DC 20548:
February 8, 2008:
Congressional Committees:
Subject: Military Personnel: Guidance Needed for Any Future Conversions
of Military Medical Positions to Civilian Positions:
Since September 11, 2001, the high pace of military operations has
placed significant stress on U.S. operating forces. In late 2003, the
Department of Defense (DOD) reported that several studies had found
that tens of thousands of military personnel were performing tasks that
were not military essential and that these tasks could be performed
more cost effectively by civilian or private-sector contract employees.
To address this matter, DOD, in fiscal year 2004, began a multiyear
initiative to convert military positions, including military health
care positions,[Footnote 1] to federal civilian or contract
positions.[Footnote 2]
Within DOD, the Office of the Under Secretary of Defense, Personnel and
Readiness (USD, P&R), has overall responsibility for issuing guidance
on manpower management, which includes guidance related to determining
the least costly mix of military, civilian, and contract
personnel.[Footnote 3] Additionally, the Under Secretary of Defense
(Comptroller) (USD (C)) and the Director, Program Analysis and
Evaluation (PA&E) play key roles in determining the costs of military,
civilian, and contract personnel. For example, the USD(C) is
responsible for developing the composite pay rates used in developing
military and civilian personnel budgets and PA&E provides leadership in
developing and promoting tools, data, and methods for analyzing
allocation of resources. USD, P&R also has responsibility for the
Defense Health Program, which provides health care to over 9 million
beneficiaries--including military servicemembers and retirees and their
families and survivors. This program had estimated costs of $21 billion
for fiscal year 2007 and DOD officials anticipate further significant
growth in these health care costs. In fact, the costs associated with
the program have doubled since fiscal year 2000 due to factors such as
increased enrollment, medical inflation, and implementation of the
TRICARE for Life program.[Footnote 4]
In recent years, however, questions have surfaced about the potential
effects of DOD's planned conversions on the Defense Health Program.
Congress addressed these questions in the National Defense
Authorization Act for Fiscal Year 2006[Footnote 5] by prohibiting the
military departments from performing any further military to civilian
conversions until the service secretaries' submitted certifications
that such conversions would not increase costs or decrease access to or
quality of care. The act also required us to report on the potential
effects on the Defense Health Program of converting military health
care positions to civilian positions--to include impacts on medical
readiness, recruitment and retention, and cost associated with the
conversions. In our May 2006 report,[Footnote 6] we stated that the
military departments[Footnote 7] did not expect conversions to have any
effects on medical readiness, quality of care, recruitment and
retention of military personnel, or access to care. However, we noted
at that time that it was unknown whether these conversions would
increase or decrease costs to DOD, primarily because the methodology
each of the departments considered using in its certification did not
include the full cost of military personnel. At that time, PA&E was
developing a methodology to account for both the direct and indirect
costs for military personnel, including costs for training and
recruiting. Accordingly, we recommended, among other things, that the
secretaries of the military departments coordinate their certifications
with PA&E to consider full costs for military personnel and for
civilian or contract personnel when reporting to Congress. DOD
generally concurred with the recommendations, but commented that it was
unclear when the PA&E cost methodology would be finalized and available
for use by the military departments. As of December 6, 2007, PA&E was
still working to finalize the full cost methodology and responsible
officials said they did not expect it to be final until June or July of
2008. We continue to believe the military departments should account
for the full cost of military health care positions converted or
planned for conversion as we recommended.
In October 2006, the John Warner National Defense Authorization Act
(NDAA) for fiscal year 2007[Footnote 8] revised the requirements for
the military departments to certify and report on planned conversions
of military medical and dental positions to civilian medical and dental
positions. Under this law, the Secretary of a military department may
not convert any military medical or dental positions to civilian
positions until the Secretary submits a certification to the
congressional defense committees that conversions will not increase
cost or decrease quality of care or access to care. Furthermore, the
act required that each certification include a written report that
addressed, among other things:
* the methodology used by the Secretary in making the determinations
necessary for the certification;
* the number of positions, by grade or band and specialty, planned for
conversion;
* an analysis showing the extent to which access to care and cost of
care will be affected;
* a comparison of the full costs for the military medical and dental
positions planned for conversion with the estimated full costs for the
civilian medical and dental positions that will replace them, including
expenses such as recruiting, salary, benefits, training, and any other
costs the department identifies; and;
* an assessment showing that the military medical or dental positions
planned for conversion are in excess of those needed to meet medical
and dental readiness requirements:
In addition, the act required the military departments to submit their
certification for fiscal year 2008[Footnote 9] at the time the
President's Budget was submitted to Congress (Feb. 5, 2007), resubmit
their certifications and reports for fiscal year 2006 conversions, and
follow certain special requirements for fiscal year 2007
certifications. Enclosure I has the detailed reporting requirements for
the certification reports, along with the specific special requirements
for the fiscal year 2007 certifications.
All of the military departments submitted their certification packages
to Congress at various times--in some cases several months after the
President's Budget had been submitted to Congress on February 5, 2007.
For example, the Air Force's packages for fiscal years 2007 and 2008
were submitted April 17 and 12, 2007, respectively; while the Navy's
fiscal years 2007 and 2008 certification packages were submitted July
10, 2007. The Army's fiscal year 2007 certification was submitted June
4, 2007; while the fiscal year 2008 certification was submitted October
9, 2007. In addition, the military departments' certification packages
varied in terms of format and content. Specifically, each department
created its own format for its certification; two included the
certification as a stand-alone document, while one provided a separate
certification document and a report with several pages to address each
of the requirements under the law. For example, the Navy's packages
included a 1-page certification letter along with a separate 11-page
report with sections corresponding to the 8 reporting requirements of
the law. The Army, on the other hand, submitted a 1-page certification
letter with 1 paragraph to address all of the 8 reporting requirements.
In addition to the mandate for the military departments, the act also
required that we review any certifications and reports that the
military departments had submitted to the congressional defense
committees. For this report, we reviewed the extent to which the
military departments addressed the reporting requirements of the 2007
National Defense Authorization Act. In addition, we reviewed the extent
to which the military departments (1) had documentation to support
their assessments of the impact of conversions on readiness, cost,
quality of care, access to care, and recruitment/retention of military
personnel; and (2) converted or planned to convert military medical and
dental positions during fiscal years 2005 to 2009. This report
documents and updates information that we provided to your offices in
an interim status briefing on October 5, 2007. Enclosure II contains
the updated briefing slides.
To address our objectives, we interviewed officials and obtained
pertinent documents, reports, and information related to the military
medical to civilian conversion programs from each of the offices of the
Surgeons General for the Army, Navy, and Air Force; the Office of the
Secretary of Defense for Personnel and Readiness; Director for PA&E;
and the TRICARE Management Activity within the Office of the Assistant
Secretary of Defense for Health Affairs (ASD (HA)). Specifically, to
determine the extent to which the military departments had addressed
the certification and reporting requirements of the 2007 National
Defense Authorization Act, we obtained and reviewed each of the
military departments' certification letters and reports submitted to
Congress. To determine the extent to which the military departments had
documentation to support their assessments of the potential effects of
planned conversions, we reviewed documentation supporting the military
departments' assessments of the potential effects of conversions on
medical readiness, cost, quality of care, access to care, and
recruitment and retention of military medical and dental positions. To
determine the extent to which the military departments have developed
and implemented plans to convert military medical positions, we
obtained documents and interviewed officials from the offices of the
Surgeons General for the Army, the Navy, and the Air Force concerning
their department's actual conversions for fiscal years 2005 through
2007, planned conversions for fiscal years 2008 and 2009, and the
current status of efforts to hire civilian employees to fill converted
positions. Further details on our scope and methodology can be found in
enclosure III. We conducted this performance audit in accordance with
generally accepted government auditing standards from August 2007 to
February 2008.[Footnote 10] Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Summary:
Although each of the military departments submitted certification
packages to Congress that addressed or partially addressed most of the
reporting requirements of the law, none of the departments'
certifications addressed all of those requirements. For example, each
department identified the methodology it had used to reach its
certification decisions, and each reported that the positions it
planned to convert were in excess of those needed to meet military
readiness requirements. On the other hand, none of the military
departments provided an analysis of the impact the conversions would
have on the cost of care--within either the direct care system or the
purchased care system. Officials from each of the military departments
told us that their certification packages did not address the cost of
care because it would be difficult to attribute specific changes in
such costs within either system given that the cost growth within the
Defense Health Program results from several factors, such as increased
enrollment in beneficiaries, medical inflation, and implementation of
the TRICARE for Life program. In response to the requirement to use a
full cost methodology, the Navy's methodology was the only one that
addressed the specific factors identified by the act--including
training and recruiting[Footnote 11]--for positions planned for
conversion for fiscal years 2007 and 2008.[Footnote 12] The Air Force
and the Army relied on composite military rates, instead of using a
full cost methodology like the one PA&E is developing.[Footnote 13]
These composite rates did not include all of the required cost factors,
such as training and recruiting costs. Responsible officials from both
the Air Force and the Army stated that the composite rates provided by
USD (C) represented the funding associated with the converted positions
at the time and that, because the development of the PA&E methodology
was not complete, they used the composite rates for their analysis.
However--as we reported in May 2006--without accounting in their
certifications to Congress for the full costs of military health care
positions that have been converted or are planned for conversion, the
military departments cannot accurately compare the costs of military
and civilian positions, and Congress cannot be assured that the
certified conversions will not increase DOD's cost of care.
In their certification packages, the military departments identified or
provided support for some of the potential effects of conversions;
however, they did not provide us with analysis or with additional
documentation to support all of their assessments of potential effects.
While the statute requiring certifications does not require the
departments to provide documentation supporting their assessments, such
additional information would provide Congress with a better
understanding of the certification packages. Although the USD, P&R has
issued memoranda urging the military departments to comply with the
certification requirements and advising them on implementing
conversions, this guidance did not address how to conduct the cost
analysis, how to comply with reporting requirements, or how to document
the analyses of potential effects of conversions including the key
assumptions. In addition, officials within the USD, P&R and the TRICARE
Management Activity stated that such guidance was not issued because
the law required the secretaries of the military departments--not the
Secretary of Defense--to submit the certifications. These OSD officials
acknowledged, however, that leadership was needed in this area at the
OSD level. As stated previously, under DOD's manpower management
directive, OSD (P&R) is responsible for issuing guidance on manpower
management, which would include guidance related to determining the
least costly mix of military, civilian, and contract personnel.
Specifically, regarding the military to civilian conversion
certifications, we found that each of the military departments provided
documentation to support its assessment of the impact of conversions on
medical readiness,[Footnote 14] along with documentation to demonstrate
how their cost comparisons were performed. On the other hand, we found
that even though each of the departments stated that planned and
completed conversions would not have a negative impact on access to
care, only the Navy provided an analysis of patient waiting times for
medical appointments to support this conclusion. Air Force and Army
officials told us that they based their assertion that conversions
would not decrease access to care on the assumption that converted
military positions would be filled on a one-to-one basis by qualified
civilian employees, and thus qualified providers would be available to
prevent problems with access to care. Regarding the quality of care
received by beneficiaries, all of the military departments stated that
quality of care would not be affected by conversions because the
civilians being hired would be required to have the same
qualifications, credentials, and licenses as the military personnel who
had held the positions being converted. However, none of the
departments provided documentation--for example, an assessment that
quality of care performance measures[Footnote 15] had not been
negatively impacted by conversions--to demonstrate this. Similarly, all
of the military departments stated that they did not expect conversions
to negatively impact recruitment or retention of military personnel,
but none provided any data supporting this view. Officials from each of
the military departments stated that the impact of conversions on
access to care, quality of care, and recruitment/retention of military
personnel would be difficult to isolate and document because many
factors would influence any performance metric used to assess any
impacts. These factors include the cost growth discussed earlier,
increased number of beneficiaries covered by the defense health
program, as well as deployments and temporary duty travel. However,
federal internal control guidance states that appropriate documentation
should be maintained for significant events, and internal controls are
designed to provide reasonable assurance concerning compliance with
applicable laws and regulations.[Footnote 16] Without guidance from OSD
to direct the military departments in preparing their certifications,
particularly in the area of documenting and maintaining a record of the
assessments of the impacts of conversions, the certification packages
would not provide Congress with a complete understanding of the
potential impacts of conversions. Consequently, Congress would not have
reasonable assurance that conversions will not increase the cost of
care, decrease access to care, or decrease quality of care. Moreover,
Congress would not have all the information necessary to make informed
decisions about current and future conversion of military medical
personnel.
To date, the military departments have converted or have plans to
convert almost 10,000 military medical and dental positions to federal
civilian/contract positions from fiscal year 2005 through fiscal year
2009. As shown in table 1 (enclosure II), the Army, Navy, and Air Force
converted a total of 5,305[Footnote 17] military positions to civilian
positions from fiscal year 2005 through 2007. Notably, only 152
physician and 11 psychologist positions were included in the fiscal
year 2005 to fiscal year 2007 conversions (see enclosure IV for a
detailed distribution of converted positions). In addition, the
military departments plan to convert another 4,426[Footnote 18]
positions during fiscal years 2008 and 2009. Similarly, only 86
physician and 12 psychologist positions were planned for conversion in
fiscal years 2008 and 2009; none of the physician or psychologist
positions planned for conversion are Army medical positions. According
to DOD and military department officials, success in hiring civilian
replacements for converted military medical and dental positions is
dependent on a number of factors, including the availability of
qualified civilian applicants, competitiveness of proposed salaries,
economic conditions in the affected areas, and the lead time needed to
hire civilian employees. As shown in table 2, (enclosure II), each of
the military departments has had varying degrees of success in hiring
civilians to fill converted military positions. For example, the Navy
(the only military department with conversions in fiscal year 2005) has
hired 94 percent of the planned hires. Each of the departments has
hired about three-fourths of the planned hires for the fiscal year 2006
conversions. Success in hiring civilian replacements for fiscal year
2007 varied widely, from 9 percent for the Navy to 85 percent for the
Army.
In January 2008, as we were preparing to issue this report, the
National Defense Authorization Act for Fiscal Year 2008 was
passed.[Footnote 19] The Act contains language that would establish a
statutory moratorium on converting any military medical and dental
positions to civilian positions from October 1, 2007, through September
30, 2012.[Footnote 20] According to DOD and military department
officials, this prohibition could negatively affect the department's
ability to provide health care services. However, we received limited
documentation supporting these assertions. For example, these officials
told us that, once a position has been selected for conversion, it is
no longer included in recruiting targets. They further stated that if a
military department, in the future, restores the position to a military
position, it will have to reinitiate efforts to recruit and train
military personnel; this could take years and could negatively affect
access to care, quality of care, and the military departments'
capability to provide services in key areas such as mental health
treatment and surgical support. We did not evaluate these assertions.
Conclusions:
While the military departments are well under way in converting almost
10,000 military medical positions to civilian positions and have
generally addressed the reporting requirements of the law, Congress
lacks information from the departments that would help it make
decisions on current and future conversions. Although the National
Defense Authorization Act for Fiscal Year 2008 places a statutory
moratorium on conversions from October 1, 2007, through September 30,
2012, the accelerated growth of the Armed Forces through fiscal year
2010 and the sustained growth of the Defense Health Program will
continue to tax the military health system in several areas, including
manpower management. As a result, the issue of converting military
medical and dental positions to civilian positions might arise again in
the near future. Accordingly, we continue to believe that our previous
recommendation for the departments to use a consistent, full cost
methodology, like that suggested by OSD's PA&E, in any future
conversion certifications has merit. Without clear guidance on the use
of such a methodology, the departments would be unable to assure
Congress that conversions will not increase the cost of medical care.
Moreover, without clear guidance on documenting information about, for
example, the departments' assessments of the potential effects of
conversions on the quality of care, the departments may be unable to
support their assessments. If such conversions are to be done, it will
be important for Congress to receive sufficient information from the
military departments to provide assurances that planned conversions
will not increase cost or decrease access to care or quality of care.
Recommendations for Executive Action:
To help ensure that the military departments provide Congress with
reasonable assurances that any future conversions would not increase
cost or decrease access to care or quality of care, we recommend that
the Secretary of Defense direct the Under Secretary of Defense for
Personnel and Readiness, in coordination with the Under Secretary of
Defense, Comptroller, the Director, Program Analysis and Evaluation,
the Assistant Secretary of Defense for Health Affairs, and the Service
Secretaries, to develop operating guidance for the military departments
to use when justifying future conversions of military medical and
dental positions to civilian positions. This guidance should stipulate
requirements to:
* use a consistent full cost methodology for comparing the cost of
military and civilian personnel as we had recommended in our May 2006
report and:
* provide documentation to support assertions about the potential effects
of planned conversions on medical readiness, cost, quality of care,
access to care, and recruitment and retention of military medical and
dental personnel.
Agency Comments and Our Evaluation:
DOD provided written comments on a draft of this report and generally
concurred with our recommendations.
In commenting on our draft, DOD supported our recommendation to develop
operating guidance that stipulates requirements to use a consistent
full-cost methodology and to provide documentation to support
assertions regarding the potential effects of planned conversions. DOD
noted, however, that using a full-cost methodology to account for the
cost of military personnel may have the consequence of making
conversions even more compelling, because the cost of military manpower
would be even more expensive as compared with civilian manpower. We
recognize that using a full-cost methodology will increase the cost of
military manpower used in the conversion decision-making process;
however, the same full cost principles would also apply to determining
the associated cost of civilian manpower. As a result, we continue to
believe it is important that the military departments provide Congress
with the most accurate comparative costs for converting military health
care positions to civilian positions. In addition, DOD noted that the
USD (C) and the Director, PA&E, along with USD (P&R) and ASD (HA) have
responsibility to develop the tools and guidance necessary for
determining the costs of military, civilian, and contract personnel and
should be included as responsible parties in our recommendation. We
concur that it would be appropriate to include USD (C) and the
Director, PA&E as responsible parties and we have revised our
recommendation accordingly. In fact, our report discusses the critical
role that the full-cost methodology being developed by PA&E will play
in any future medical conversions. In addition, prior GAO work has
identified the need for consistent cost information across the military
departments and recognized recent guidance issued by USD (C) regarding
comparable cost estimates to support military to civilian conversions.
Considering the many organizations within DOD that play key roles in
military to civilian conversions, we believe that consistent leadership
from the USD, P&R level is essential to the success of any future
conversion efforts.
Finally, while DOD agreed that the military departments should provide
the rationale for their conclusions and assertions as appropriate, it
noted that there are many factors that affect quality, access to, and
cost of health care, which are unrelated to military-to-civilian
conversions and in many cases it is impossible to isolate the impact of
conversions. It further noted that the Department routinely rotates
military medical and dental personnel at military treatment facilities
(MTFs) to other assignments within DOD and replaces civilian personnel
who retire or separate without adverse consequences to health care
delivery. As a result, the department stated that it is not
unreasonable for the Military Departments to presume that quality and
access to care will not be adversely impacted by the conversion of
military medical and dental personnel--so long as civilian replacements
are fully qualified, the rate of conversion is in keeping with the
military rotation rate, the fill rate of vacated positions is fairly
consistent with the routine fill rates at the MTFs, and requirements
for skill levels are not changed at the time of the conversions. We
noted throughout our report that the military departments identified
the difficulties they encountered in attempting to isolate the impact
of conversions. However, the certifications provided by the military
departments did not provide documentation or information to support
assumptions--such as fill rates for vacated positions were fairly
consistent with routine fill rates. Consequently, we continue to
believe that the military departments should provide both the rationale
for their conclusions and information and documentation to support the
assumptions on which their conclusions are based.
DOD's comments are reprinted in enclosure V. DOD also provided
technical comments, which we have incorporated in the final report
where appropriate.
We are sending copies of this report to interested congressional
committees, the Secretary of Defense, and the Secretaries of the Army,
Air Force, and Navy. We will also make copies available to others upon
request. In addition, this report will be available at no charge on
GAO's Web site at [hyperlink, http://www.gao.gov].
If you have any questions about this report or need additional
information, please contact me at (202) 512-3604 or farrellb@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report are listed in enclosure VI.
Signed by:
Brenda S. Farrell:
Director:
Defense Capabilities and Management:
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Duncan Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Ted Stevens:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable John P. Murtha:
Chairman:
The Honorable C. W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Enclosure I:
The John Warner National Defense Authorization Act for Fiscal Year 2007
required the military departments to certify and report on planned
conversions of military medical and dental positions to civilian
medical and dental positions. The act required a written report with
detailed requirements and included several special requirements for the
fiscal year 2007 certifications, which are contained in the following
excerpts from the act.
Public Law 109-364 Section 742:
(a) Prohibition On Conversions.-
(1) Submission of Certification.--The Secretary of a military
department may not convert any military medical or dental position to a
civilian medical or dental position in a fiscal year until the
Secretary submits to the congressional defense committees with respect
to that fiscal year a certification that the conversions within that
department will not increase cost or decrease quality of care or access
to care.
(2) Report on Certification.--Each certification under paragraph (1)
shall include a written report setting forth the following:
(A) The methodology used by the Secretary in making the determinations
necessary for the certification.
(B) The number of military medical or dental positions, by grade or
band and specialty, planned for conversion to civilian medical or
dental positions.
(C) The results of a market survey in each affected area of the
availability of civilian medical and dental care providers in such area
in order to determine whether the civilian medical and dental care
providers available in such area are adequate to fill the civilian
positions created by the conversion of military medical and dental
positions to civilian positions in such area.
(D) An analysis, by affected area, showing the extent to which access
to health care and cost of health care will be affected in both the
direct care and purchased care systems, including an assessment of the
effect of any increased shifts in patient load from the direct care to
the purchased care system, or any delays in receipt of care in either
the direct or purchased care system because of the planned conversions.
(E) The extent to which military medical and dental positions planned
for conversion to civilian medical or dental positions will affect
recruiting and retention of uniformed medical and dental personnel.
(F) A comparison of the full costs for the military medical and dental
positions planned for conversion with the estimated full costs for
civilian medical and dental positions, including expenses such as
recruiting, salary, benefits, training, and any other costs the
Department identifies.
(G) An assessment showing that the military medical or dental positions
planned for conversion are in excess of the military medical and dental
positions needed to meet medical and dental readiness requirements of
the uniformed services, as determined jointly by all the uniformed
services.
(H) An identification of each medical and dental position scheduled to
be converted to a civilian position in the subsequent fiscal year,
including the location of each position scheduled for conversion, and
whether or not civilian personnel are available in the location for
filling a converted military medical or dental position.
(3) Submission Deadline.--A certification and report with respect to
any fiscal year after fiscal year 2007 shall be submitted at the same
time the budget of the President for such fiscal year is submitted to
Congress pursuant to section 1105(a) of title 31, United States Code.
(b) Requirement For Comptroller General Review.--Not later than 120
days after the submission of the budget of the President for a fiscal
year, the Comptroller General shall submit to the congressional defense
committees a report on any certifications and reports submitted with
respect to that fiscal year under subsection (a).
(c) Requirement To Resubmit Certification And Report Required By Public
Law 109-163.--The Secretary of each military department shall resubmit
the certification and report required by section 744(a) of the National
Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163; 119
Stat. 3360; 10 U.S.C. 129c note.) Such resubmissions shall address in
their entirety the elements required by section 744(a)(2) of such Act.
(d) Special Requirements For Fiscal Year 2007 Certification.--
(1) List of 2007 Planned Conversions. - The report required by
paragraph (2) of subsection (a) with respect to fiscal year 2007 shall
contain, in addition to the elements required by that paragraph, a list
of each military medical or dental position scheduled to be converted
to a civilian medical or dental position in fiscal year 2007.
(2) Resubmission Required First. - The certification and report
required by subsection (a) with respect to fiscal year 2007 may not be
submitted prior to the resubmission required by subsection (c).
(3) Prohibition on Conversions During Fiscal Year 2007. - No
conversions of a military medical or dental position may occur during
fiscal year 2007 prior to both the resubmission required by subsection
(c) and the submission of the certification and report required by
subsection (a).
[End of enclosure]
Enclosure II:
Military Personnel: Guidance Needed for Any Future Conversions of
Military Medical Positions to Civilian Positions:
Briefing to Congressional Committees:
Observations: NDAA Requirements:
Prohibition on conversions:
* The secretary of a military department may not convert any military
medical or dental positions to civilian positions until its secretary
submits certification to the congressional defense committees that
conversions will not increase cost or decrease quality of care or
access to care.
Written report required for certifications must include:
* methodology used;
* number of positions, by grade or band and specialty, planned for
conversion;
* results of market surveys determining that there are adequate
civilian providers available in each affected area;
* extent to which access to care and cost of care will be affected;
* effects of planned conversions on recruiting and retention of
uniformed personnel;
* comparison of full costs for military medical and dental positions
planned for conversion with estimated full costs for civilian positions
including expenses such as recruiting, salary benefits, training, and
any other identified costs;
* assessment showing that military medical and dental positions planned
for conversion are in excess of the military positions needed to meet
medical and dental readiness requirements; and;
* identification of each medical and dental position scheduled to be
converted to a civilian position in the subsequent fiscal year,
including location, estimated cost of conversion, and availability of
civilian personnel to fill the position.
Deadline:
* The secretaries of the military departments must submit their
certifications and reports to Congress with respect to any fiscal year
after fiscal year 2007 at the same time as the President‘s Budget for
the fiscal year.
Additional requirements:
* Secretaries are required to resubmit certifications and reports for
FY 2006 conversions.
* Special requirements for FY 2007 certifications:
- the required report must list each military medical and dental
position scheduled for conversion in FY 2007;
- certification for FY 2006 must be resubmitted before submitting
certification for FY 2007, and;
- no conversions may occur during FY 2007 until FY 2006 certification
and report is resubmitted and report for FY 2007 is submitted.
Observations: Prior GAO Report:
GAO‘s May 2006 report [Footnote 21]:
* Examined, among other things, the military departments‘ completed and
planned conversions and the potential effects of conversions on the
Defense Health Program.
* Found that departments do not expect conversions to have any affect
on medical readiness, quality of care, recruitment and retention of
military personnel, or access to care. However, it is unknown whether
conversions will increase or decrease costs to the Department of
Defense (DOD).
* Recommended that the secretaries of the military departments be
directed to (1) coordinate their certifications with the Office of the
Director, Program Analysis and Evaluation (PA&E), in order to consider
full costs for military personnel and full costs for civilian or
contract personnel, and(2) address in certifications the extent to
which total projected costs for hiring civilian or contract personnel
include both the actual cost of completed hires and anticipated costs
of future hires.
* As shown later in this briefing, the military departments have
implemented, to some extent, certain aspects of these recommendations.
Observations: Key Questions:
To address the mandate for GAO to review any certifications and reports
submitted by the military departments, we reviewed the extent to which
the military departments addressed the certification and reporting
requirements of Public Law 109-364 § 742 pertaining to conversions of
military medical and dental positions.
In addition, we reviewed the extent to which the military departments:
* had documentation to support their assessments of the potential
effects of conversions on medical readiness, cost, quality of care,
access to care, and recruitment and retention of military medical and
dental personnel, and;
* converted or planned to convert military medical and dental positions
to civilian positions.
Observations: Scope and Methodology:
To address our objectives, we interviewed officials and obtained
pertinent documents, reports, and information related to the military
medical to civilian conversion programs from:
* the offices of the Surgeons General for the Army, Navy, and Air
Force;
* the Office of the Under Secretary of Defense for Personnel and
Readiness;
* the Director for PA&E; and;
* the TRICARE Management Activity within the Office of the Assistant
Secretary of Defense for Health Affairs.
Specifically, to determine the extent to which the military
departments:
* had addressed the certification and reporting requirements, we
obtained and reviewed each of the military departments‘ certification
letters and reports submitted to Congress;
* had documentation to support their assessments of the potential
effects of planned conversions, we reviewed documentation supporting
the military departments‘ assessments of the potential effects of
conversions on medical readiness, cost, quality of care, access to
care, and recruitment and retention of military medical and dental
positions, and;
* have developed and implemented plans to convert military medical
positions, we obtained documents and interviewed officials from the
offices of the Surgeons General for the Army, the Navy, and the Air
Force concerning their departments‘ actual conversions between fiscal
years 2005 and 2007, planned conversions for fiscal years2008 and 2009,
and the current status of efforts to hire civilian employees to fill
converted positions.
Observations: Reporting Requirements:
Although each of the military departments submitted certification
packages to Congress that addressed or partially addressed the
requirements of the law, none of the certifications addressed all of
the requirements.
For example, in the reports submitted with the certifications:
* each of the military departments identified the methodology used to
reach certification decisions;
* each of the military departments reported that positions planned for
conversion were in excess of positions needed to meet military
readiness requirements; and;
* the Navy included a full cost comparison that addressed specific
factors identified by the statute.
However, we noted the following:
* None of the departments included an analysis of the impact of
conversions on cost of care within both the direct care system and the
purchased care system.
* The Army and the Air Force did not include a complete, full-cost
comparison for all of their planned conversions. Instead, they relied
on composite military rates, which do not include all of the cost
factors identified by the statute, such as training and recruiting.
However, the Air Force used a cost methodology that included training
costs for a portion of its FY2008 conversions.
Observations: Supporting Documentation:
While the military departments‘ certification packages identified or
provided support for some of their assessments of the potential effects
of conversions, none of the departments provided us with analyses or
additional documentation to support all of their assessments.
Specifically, each of the military departments:
* stated that medical readiness was based on DOD‘s most recent Medical
Readiness Review (MRR) and Army, Navy, and Air Force officials told us
that their planned conversions are in excess of those required for the
readiness mission. (We have not reviewed the assumptions and data used
in conducting the MRR), and;
* provided support that demonstrated how its cost comparison was
performed.
On the other hand, all of the departments stated the following:
* Access to care would not be adversely affected by conversions.
- The Navy provided slides from a Navy study of access to care
statistics, which showed that although access to care has decreased
slightly, it continues to be within TRICARE standards.
- Army and Air Force assessments were based on the assumption that
converted positions would be filled by qualified civilians.
* Quality of care would not be negatively affected:
- Assessments were based on the assumption that civilian hires would
have the same qualifications, credentials, and licenses as the military
personnel being replaced.
- No analysis of quality of care performance measures was provided to
support this assessment.
Conversions were not expected to negatively affect recruitment or
retention of military personnel, but the departments provided no
supporting data.
Officials from each of the departments stated that the impact of
conversions on access to care, quality of care, and recruitment/
retention of military personnel would be difficult to isolate and
document because many factors, such as deployment, temporary duty
travel, and illness of health care providers, affect these metrics.
Observations: Conversion Plans:
In FY 2005 through 2007, the Army, Navy, and Air Force have converted a
total of 5,305 military positions to civilian positions and some
progress has been made in hiring the civilian replacements. Another
4,426 conversions are planned in FY 2008 and 2009.
Table 1: Number of Military Medical and Dental Positions Converted or
Planned for Conversion to Civilian Positions, Fiscal Years 2005-2009:
Military Department: Air Force;
Actual conversions[A], FY 2005: 0;
Actual conversions[A], FY 2006: 403;
Actual conversions[A], FY 2007: 813;
Planned conversions[B], FY 2008: 954;
Planned conversions[B], FY 2009: 422;
All conversions, FY 2005-2009, Total: 2,592;
All conversions, FY 2005-2009, Percent: 27.
Military Department: Army;
Actual conversions[A], FY 2005: 0;
Actual conversions[A], FY 2006: 977;
Actual conversions[A], FY 2007: 436;
Planned conversions[B], FY 2008: 438;
Planned conversions[B], FY 2009: 554;
All conversions, FY 2005-2009: 2,405;
All conversions, FY 2005-2009: 25.
Military Department: Navy;
Actual conversions[A], FY 2005: 1,772;
Actual conversions[A], FY 2006: 215;
Actual conversions[A], FY 2007: 689;
Planned conversions[B], FY 2008: 1,036;
Planned conversions[B], FY 2009: 1,022;
All conversions, FY 2005-2009: 4,734;
All conversions, FY 2005-2009: 49.
Military Department: Total;
Actual conversions[A], FY 2005: 1,772;
Actual conversions[A], FY 2006: 1,595;
Actual conversions[A], FY 2007: 1,938;
Planned conversions[B], FY 2008: 2,428;
Planned conversions[B], FY 2009: 1,998;
All conversions, FY 2005-2009: 9,731;
All conversions, FY 2005-2009: 100.
Military Department: Percent of total conversions;
Actual conversions[A], FY 2005: 18;
Actual conversions[A], FY 2006: 16;
Actual conversions[A], FY 2007: 20;
Planned conversions[B], FY 2008: 25;
Planned conversions[B], FY 2009: 21.
Source: GAO analysis of Air Force, Army, and Navy data.
[A] Actual conversions represent those military medical and dental
positions that have been programmed for conversion by the respective
departments' medical command.
[B] For fiscal year 2008, the Army certified 438 medical and dental
positions within the Defense Health Program for conversion. The Army is
converting an additional 300 positions within the Defense Health
Program that are administrative and were not included in the
certification.
[End of table]
Table 2: Number of Military Medical and Dental Conversions, Planned
Hires, and Positions Filled, Fiscal Years 2005-2007:
Military departments: Air Force, FY 2005:
Actual conversions: 0;
Planned hires[A]: 0;
Positions filled[B]: 0;
Percentage of positions filled: 0.
Military departments: Air Force, FY 2006:
Actual conversions: 403;
Planned hires[A]: 403;
Positions filled[B]: 299;
Percentage of positions filled: 74.
Military departments: Air Force, FY 2007:
Actual conversions: 813;
Planned hires[A]: 813;
Positions filled[B]: 483;
Percentage of positions filled: 59.
Military departments: Air Force, Total;
Actual conversions: 1,216;
Planned hires[A]: 1,216;
Positions filled[B]: 782;
Percentage of positions filled: 64.
Military departments: Army, FY 2005;
Actual conversions: 0;
Planned hires[A]: 0;
Positions filled[B]: 0;
Percentage of positions filled: 0.
Military departments: Army, FY 2006;
Actual conversions: 977;
Planned hires[A]: 977;
Positions filled[B]: 716;
Percentage of positions filled: 73.
Military departments: Army, FY 2007;
Actual conversions: 436;
Planned hires[A]: 436;
Positions filled[B]: 370;
Percentage of positions filled: 85.
Military departments: Army, Total;
Actual conversions: 1,413;
Planned hires[A]: 1,413;
Positions filled[B]: 1,086;
Percentage of positions filled: 77.
Military departments: Navy, FY 2005;
Actual conversions: 1,772;
Planned hires[A]: 1,323;
Positions filled[B]: 1,260;
Percentage of positions filled: 94.
Military departments: Navy, FY 2006;
Actual conversions: 215;
Planned hires[A]: 128;
Positions filled[B]: 102;
Percentage of positions filled: 80.
Military departments: Navy, FY 2007;
Actual conversions: 689;
Planned hires[A]: 625;
Positions filled[B]: 58;
Percentage of positions filled: 9.
Military departments: Navy, Total;
Actual conversions: 2,676;
Planned hires[A]: 2,076;
Positions filled[B]: 1,420;
Percentage of positions filled: 68.
Military departments: DOD Total;
Actual conversions: [Empty];
Planned hires[A]: 4,705;
Positions filled[B]: 3,288;
Percentage of positions filled: 70.
Source: GAO analysis of Air Force, Army, and Navy data.
[A] Planned hires represent the number of positions that the Army,
Navy, and Air Force certified in a given fiscal year except for the
Navy‘s FY 2005 and FY 2006 planned hires which are lower than the
certified conversion due to an efficiency review that indicated the
Navy did not need to hire a civilian for each of the converted
positions.
[B] Positions filled represents the most recent information provided by
the services.
[End of table]
Observations: Conclusions:
* While the military departments are well under way in converting
approximately 10,000 military health care positions to civilian
positions and have generally addressed the reporting requirements of
the law, additional information could be helpful to Congress in making
decisions on current and future military to civilian conversions within
the medical community.
* Clear guidance articulating the need to use a full cost methodology,
as we previously recommended, when comparing the cost of military and
civilian health care positions, could assist the military departments
in demonstrating the cost effectiveness of military to civilian
conversions.
* Such guidance could include requirements pertaining to the
documentation and retention of information related to the departments‘
assessments of the potential effects of conversions on cost of care,
access to care, quality of care, and recruitment and retention of
military personnel.
* Including such guidance could provide Congress with reports that
would give them greater assurance that conversions will not increase
costs or decrease access to care or quality of care.
Observations: Recommendations:
To help ensure that the future certifications submitted by the military
departments provide Congress with reasonable assurances that any future
conversions would not increase costs or decrease access to care or
quality of cost, we recommend that the Secretary of Defense direct the
Under Secretary of Defense for Personnel and Readiness, in coordination
with the Under Secretary of Defense, Comptroller, the Director, Program
Analysis and Evaluation, the Assistant Secretary of Defense for Health
Affairs, and the service secretaries, to develop operating guidance for
the military departments to use when preparing any future
certifications for planned conversion of military medical and dental
positions to civilian positions. This guidance should stipulate
requirements to:
* use a full cost methodology for comparing the cost of military and
civilian personnel as we had recommended in our May 2006 report and;
* provide documentation to support assertions on the potential effects
of planned conversions on medical readiness, cost, quality of care,
access to care, and recruitment and retention of military medical and
dental personnel.
[End of enclosure]
Enclosure III: Scope and Methodology:
To address our objectives, we obtained and reviewed pertinent
documents, reports, and information related to the military medical to
civilian conversion programs from each of the military departments. We
also interviewed cognizant officials from the offices of the Surgeons
General for the Army, Navy, and Air Force; the Office of the Secretary
of Defense for Personnel and Readiness; Director of Program Analysis
and Evaluation; and the TRICARE Management Activity within the Office
of the Assistant Secretary of Defense for Health Affairs on their
military medical to civilian conversion programs.
To determine the extent to which the military departments addressed the
certification and reporting requirements of the John Warner National
Defense Authorization Act for Fiscal Year 2007, we obtained and
reviewed each of the military departments‘ certification letters and
supporting reports. We also identified the certification and reporting
requirements of the 2007 National Defense Authorization Act. We
analyzed each of the military departments‘ certification letters and
supporting reports to determine whether they addressed the
certification and reporting requirements of the 2007 National Defense
Authorization Act. We also interviewed officials from each of the
military departments to discuss their certification letters and
supporting reports.
To determine the extent to which the military departments had
documentation to support their assessments of the potential effects of
planned conversions, we requested from each of the military departments
the documentation they used to support their assessments of the
potential effects of conversions on medical readiness, cost, quality of
care, access to care, and recruitment and retention of military medical
and dental personnel. We reviewed supporting documentation from each of
the military departments to identify analyses or additional data they
had used to make their assessments. We also interviewed officials from
each of the military departments to discuss the assumptions they used
in making their assessments.
To determine the extent to which the military departments have
developed and implemented plans to convert military medical positions,
we obtained data from the offices of the Surgeons General for the Army,
Navy, and Air Force on their actual conversions for fiscal years 2005
through 2007, their planned conversions for fiscal years 2008 and 2009,
and the current status of their efforts to hire civilian employees to
fill converted positions. We reviewed the data to identify, by military
department, the number of actual conversions during fiscal years 2005
through 2007, the number of planned conversions for fiscal years 2008
and 2009, and the number of civilian employees hired to fill converted
positions. We also interviewed officials from the offices of the
Surgeons General for the Army, Navy, and Air Force concerning their
departments‘ plans to convert military medical positions and the
current status of their efforts to hire civilian employees to fill
converted positions. Based on our review of the data and interviews
with cognizant military officials about the data, we determined the
data used in this report to be sufficiently reliable for our purposes.
We conducted this performance audit from August 2007 to February 2008
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of enclosure]
Military Health Care Positions Converted to Civilian Positions by Type
of Position and Grade, Fiscal Years 2005-2007:
As shown in tables 3 and 4, the military departments have converted and
plan to convert a relatively low number of officer positions. For
example, during fiscal years 2005 to 2007, conversions included only
1,099 officer positions in the total of 5,351[Footnote 22] positions
converted from military to civilian. Included within these officer
positions were 152 physician and 11 psychologist positions. Similarly,
during fiscal years 2008 and 2009, planned conversions include only 684
officer positions in the total of 4,417[Footnote 23] positions planned
for conversion. Included within these officer positions were 86
physician and 12 psychologist positions.
Table 3: Military Health Care Positions Converted to Civilian Positions
by Type of Position and Grade, Fiscal Years 2005-2007:
Type of position/grade: Officers, Physicians;
Air Force: 0;
Army: 0;
Navy: 152;
Total: 152;
Percent: 2.8.
Type of position/grade: Officers, Physician assistant;
Air Force: 3;
Army: 0;
Navy: 39;
Total: 42;
Percent: 1.0.
Type of position/grade: Officers, Nurse;
Air Force: 177;
Army: 70;
Navy: 97;
Total: 344;
Percent: 6.4.
Type of position/grade: Officers, Dentist;
Air Force: 0;
Army: 32;
Navy: 176;
Total: 208;
Percent: 3.9.
Type of position/grade: Officers, Pharmacists;
Air Force: 6;
Army: 13;
Navy: 29;
Total: 48;
Percent: 0.9.
Type of position/grade: Officers, Optometrists;
Air Force: 5;
Army: 10;
Navy: 3;
Total: 18;
Percent: 0.3.
Type of position/grade: Officers, Psychologists;
Air Force: 2;
Army: 8;
Navy: 1;
Total: 11;
Percent: 0.2.
Type of position/grade: Officers, Social workers;
Air Force: 11;
Army: 6;
Navy: 0;
Total: 17;
Percent: 0.3.
Type of position/grade: Officers, Other medical positions[A];
Air Force: 24;
Army: 22;
Navy: 91;
Total: 137;
Percent: 2.6.
Type of position/grade: Officers, Other DHP positions[B];
Air Force: 15;
Army: 40;
Navy: 67;
Total: 122;
Percent: 2.3.
Type of position/grade: Total Officers;
Air Force: 243;
Army: 201;
Navy: 655;
Total: 1,099;
Percent: 20.5.
Type of position/grade: Total Enlisted[C];
Air Force: 967;
Army: 1,264;
Navy: 2,021;
Total: 4,252;
Percent: 79.5.
Type of position/grade: Total;
Air Force: 1,210;
Army: 1,465;
Navy: 2,676;
Total: 5,351;
Percent: 100.
Source: GAO analysis of Air Force, Army, and Navy data.
[A] Other military medical positions include dieticians, physical
therapists, biomedical scientists, biomedical lab officers,
occupational therapists, industrial hygiene officers, environmental
health officers, medical technicians, radiation specialists, medical
department staff, interns, oral diagnosis staff, physiologists,
emergency medical specialists, audiologists, and microbiologists.
[B] Other Defense Health Program (DHP) military positions include
administrative and engineering positions.
[C] Enlisted positions include corpsmen, medics, aerospace, medical
services, dental assistants and technicians, other medical positions,
and other DHP positions.
[End of table]
Table 4: Military Health Care Positions Planned for Conversion to
Civilian Positions by Type of Position and Grade, Fiscal Years 2008-
2009:
Type of position/grade: Officers, Physicians;
Air Force: 40;
Army: 0;
Navy: 46;
Total: 86;
Percent: 1.9.
Type of position/grade: Officers, Physician assistant;
Air Force: 10;
Army: 0;
Navy: 17;
Total: 27;
Percent: 0.6.
Type of position/grade: Officers, Nurse;
Air Force: 150;
Army: 15;
Navy: 60;
Total: 225;
Percent: 5.1.
Type of position/grade: Officers, Dentist;
Air Force: 5;
Army: 0;
Navy: 80;
Total: 85;
Percent: 1.9.
Type of position/grade: Officers, Pharmacists;
Air Force: 2;
Army: 1;
Navy: 5;
Total: 8;
Percent: 0.2.
Type of position/grade: Officers, Optometrists;
Air Force: 5;
Army: 6;
Navy: 4;
Total: 15;
Percent: 0.3.
Type of position/grade: Officers, Psychologists;
Air Force: 4;
Army: 0;
Navy: 8;
Total: 12;
Percent: 0.3.
Type of position/grade: Officers, Social workers;
Air Force: 15;
Army: 2;
Navy: 1;
Total: 18;
Percent: 0.4.
Type of position/grade: Officers, Other medical positions[A];
Air Force: 27;
Army: 9;
Navy: 55;
Total: 91;
Percent: 2.1.
Type of position/grade: Officers, Other DHP positions[B];
Air Force: 31;
Army: 23;
Navy: 63;
Total: 117;
Percent: 2.6.
Type of position/grade: Total Officers;
Air Force: 289;
Army: 56;
Navy: 339;
Total: 684;
Percent: 15.5.
Type of position/grade: Total Enlisted[C];
Air Force: 1,087;
Army: 927;
Navy: 1,719;
Total: 3,733;
Percent: 84.5.
Type of position/grade: Total;
Air Force: 1,376;
Army: 983;
Navy: 2,058;
Total: 4,417;
Percent: 100.
Source: GAO analysis of Air Force, Army, and Navy data.
[A] Other military medical positions include dieticians, physical
therapists, biomedical scientists, biomedical lab officers,
occupational therapists, industrial hygiene officers, environmental
health officers, medical technicians, radiation specialists, medical
department staff, interns, oral diagnosis staff, physiologists,
emergency medical specialists, audiologists, and microbiologists.
[B] Other Defense Health Program (DHP) military positions include
administrative and engineering positions.
[C] Enlisted positions include corpsmen, medics, aerospace, medical
services, dental assistants and technicians, other medical positions,
and other DHP positions.
[End of table]
[End of enclosure]
Enclosure V:
The Assistant Secretary Of Defense:
Health Affairs:
1200 Defense Pentagon:
Washington, DC 20301-1200:
January 29, 2008:
Ms. Brenda S. Farrell:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Farrell:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) draft report, GAO-08-370R, 'Military
Personnel: Guidance Needed for Any Future Conversions of Military
Medical Positions to Civilian Positions,' dated January 7, 2008 (GAO
Code 351087).
Thank you for the opportunity to review and comment on the draft
report. Overall, I concur with draft report's findings and conclusions.
The ability to convert military positions to civilian/contractor
positions is an important tool that enables the Department to achieve
the right balance of military, civilian, and contractor personnel. We
have worked hard with the Service Secretaries, the Service Surgeons
General and their respective staffs to identify, select, and execute
viable conversions that will ultimately benefit the Department and,
most importantly, the beneficiary. Overall, I believe we have been
successful in this endeavor.
I support the GAO's recommendation that a consistent full-cost
methodology for comparing the cost of military and civilian personnel
be utilized, and for requiring documentation to support assertions
regarding the potential effects of planned conversions on medical
readiness, cost, quality of care, access to care, and recruitment and
retention of military medical and dental personnel. However, there are
some inaccuracies in the GAO report that are addressed in both our
comments to the recommendation and in our technical comments.
My points of contact on this audit are Mr. Jon Rychalski (Functional)
at (703) 681-4693, and Mr. Gunther Zimmerman (Audit Liaison) at (703)
681-4360.
Sincerely,
Signed by:
S. Ward Casscells, MD:
Enclosures: As stated:
Government Accountability Office (GAO) Draft Report Dated January 7,
2008:
GAO-08-370R (GAO CODE 351087):
"Military Personnel: Guidance Needed For Any Future Conversions Of
Military Medical Positions To Civilian Positions"
Department Of Defense Comments To The Recommendation:
Recommendation: To help ensure that the Military Departments provide
Congress with reasonable assurances that any future conversions would
not increase costs or decrease access to care and quality of care, we
recommend that the Secretary of Defense direct the Under Secretary of
Defense (Personnel and Readiness) (USD (P&R)), in coordination with the
Assistant Secretary of Defense (Health Affairs) (ASD (HA)), and Service
Secretaries, to develop operating guidance for the Military Departments
to use when justify future conversions of military medical and dental
positions to civilian positions. This guidance should stipulate
requirements to:
1. Utilize a consistent full-cost methodology for comparing the cost of
military and civilian personnel, as we had recommended in our May 2006
report; and;
2. Provide documentation to support assertions regarding the potential
effects of planned conversions on medical readiness, cost, quality of
care, access to care, and recruitment and retention of military medical
and dental personnel.
Response:
1. We support a standard methodology for comparing the full costs of
military and civilian personnel. It is important to note, however, that
using the full cost of military personnel may have the consequence of
making military medical conversions more compelling because the cost of
military manpower would be even more expensive as compared to
civilians. In most certifications to date, a composite rate (not full
cost) was generally used which resulted in an extremely conservative
outcome. Full-costing will likely drive a business case to pursue more
conversions. Additionally, the Government Accountability Office (GAO)
has erred in assigning this responsibility exclusively to USD (P&R) and
ASD (HA). USD (P&R)'s directive on manpower management implements 10
United States Code (U.S.C.) §129a by requiring Department of Defense
(DoD) Components to "use the least costly form of personnel (military,
civilian and contractor) consistent with military requirements and
other needs of the Department." USD (P&R) also issues instructions for
determining the appropriate workforce mix. However, the Under Secretary
of Defense (Comptroller) (USD (C)), and the Director, Program Analysis
and Evaluation (PA&E), are responsible for developing the tools and
guidance necessary for determining the costs of military, civilian, and
contractor personnel. For this reason, the GAO should include USD (C)
and PA&E as responsible parties in completing Recommendation 1. Until
this is completed, USD (C) composite rates are being used, in
conjunction with guidance from PA&E on additional cost factors, to
fully account for costs of Government personnel.
2. We agree that the Military Departments should provide rationale for
their conclusions, as appropriate. However, it's important to recognize
that there are many variables affecting quality, access, and cost of
health care that are unrelated to military-to-civilian conversions. In
many cases it's impossible to isolate the impact that conversions have
from the impact that these other factors have on health care. Decisions
concerning the effects of military medical conversions will always
entail a degree of judgment on the part of the health care community
and must be made in consideration of the Department's overall approach
to managing its workforce. For example, the Department routinely
rotates military medical and dental personnel at military treatment
facilities (MTFs) to other assignments within the Department and
replaces civilian personnel who retire or separate. This is all managed
without adverse consequences to health care delivery. As a result, it
is not unreasonable for the Military Departments to presume that
quality and access to care will not be adversely impacted by the
conversion of military medical and dental personnel, so long as
civilian replacements are fully qualified, the rate of conversion is in
keeping with the military rotation rate, the fill rate of vacated
positions is fairly consistent with the routine fill rates at the MTFs,
and requirements for skill levels are not changed at the time of the
conversions.
[End of enclosure]
Enclosure VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brenda S. Farrell, (202) 512-3604 or farrellb@gao.gov.
Acknowledgments:
In addition to the individual named above, Marion Gatling, Assistant
Director; John R. Beauchamp; Nicole Harms; Maggie G. Holihan; Joanne
Landesman; Susan J. Mason; Clara C. Mejstrik; Terry L. Richardson;
Joseph A. Rutecki; and John C. Wren made key contributions to this
report.
[End of enclosure]
Footnotes:
[1] For the purposes of this report, military health care positions
include medical, dental, and other personnel associated with the
delivery of health care in the Defense Health Program.
[2] Hereafter, we will refer to federal civilian or contract positions
as "civilian positions."
[3] DOD Directive 1100.4, Guidance for Manpower Management (Feb. 12,
2005).
[4] Medical inflation refers to an increase in the cost of medical
services such as prescription drugs, medical supplies, physician
services, dental services, inpatient care, and outpatient care. TRICARE
for Life is supplemental coverage for TRICARE beneficiaries, who are
entitled to Medicare Part A and have Medicare Part B coverage,
regardless of age. It serves as a secondary insurance policy to pay for
medical costs not paid by the beneficiaries' Medicare coverage.
[5] Pub. L. No. 109-163, §744 (2006).
[6] GAO, Military Personnel, Military Departments Need to Ensure That
Full Costs of Converting Military Health Care Positions Are Reported to
Congress, GAO-06-642 (Washington, D.C.: May 1, 2006).
[7] The military departments consist of the Army, the Navy, and the Air
Force. The Navy is responsible for providing medical and dental support
to the Marine Corps.
[8] Pub. L. No. 109-364, §742 (2006).
[9] The military departments' submissions for fiscal year 2008 also
contained information related to planned conversions for fiscal year
2009.
[10] Toward the end of our review, the National Defense Authorization
Act for Fiscal Year 2008 was passed. Public Law Number 110-181, §721
(2008) prohibits all conversions of military medical positions to
civilian positions beginning October 1, 2007, and extending until
September 30, 2012. The Act also repeals the certification requirement
set forth in section 742 of the John Warner National Defense
Authorization Act for Fiscal Year 2007.
[11] According to The John Warner National Defense Authorization Act
for Fiscal Year 2007, full cost would include expenses for recruiting,
salary, benefits, training, and any other costs the department
identifies.
[12] Specifically, the Navy applied a percentage factor recommended by
OSD (PA&E) to approximate the full costs of military and civilian
personnel.
[13] The Air Force did use a more complete cost methodology for fiscal
year 2008 conversions, which included training costs for a portion of
its fiscal year 2008 conversions. In October 2007, Army officials
stated that they had completed work on a full cost methodology for
certifications prepared after fiscal year 2008.
[14] Each of the military departments stated that medical readiness was
based on DOD's most recent Medical Readiness Review (MRR) and that
planned conversions are in excess of those positions required for the
readiness mission. However, we have not reviewed the assumptions and
data used in the conduct of the MRR.
[15] In addition to credentialing and licensing, these performance
measures would include how well the health care system performed with
respect to measurable processes and outcomes of care for clinical
performance measures and in response to surveys to measure how well the
health care system is viewed by the beneficiaries, military leadership,
and Congress.
[16] See GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
[17] In our May 2006 report, we reported a total 5,507 conversions for
fiscal year 2005 through 2007. The reduction in conversions resulted
from a reevaluation of conversions while the departments were
developing their certifications. For this report, there is a difference
between the number of positions converted (5,305) and the detailed list
of converted positions by type of position and grade (5,351)--a total
of 46 positions. This resulted from changes in the number of positions
certified for fiscal year 2006 by the Army and Air Force. At the time
of recertification, a revised detailed list of converted positions was
not provided to Congress.
[18] For fiscal year 2008, the Army certified 438 medical and dental
positions within the Defense Health Program for conversion. The Army is
converting an additional 300 positions within the Defense Health
Program that are administrative and were not included in the
certification. In addition, there is a difference between the positions
planned for conversion (4,426) and the detailed list of converted
positions by type of position and grade (4,417)--a total of 9
positions. This resulted because 9 positions were not included in the
Army's detailed list of conversions for fiscal year 2009.
[19] The National Defense Authorization Act for Fiscal Year 2008, Pub.
L. No. 110-181, §721 (2008).
[20] Section 721 of the Act also states that in the case of any
military medical or dental position that is converted to a civilian
medical or dental position during the period beginning on October 1,
2004, ending on September 30, 2008, if the position is not filled by a
civilian by September 30, 2008, the Secretary of the military
department concerned shall restore the position to a military medical
or dental position that can be filled only by a member of the Armed
Forces who is a health professional.
[21] GAO, Military Personnel, Military Departments Need to Ensure That
Full Costs of Converting Military Health Care Positions Are Reported to
Congress, GAO-06-642 (Washington, D.C.: May 1, 2006).
[22] The number of converted positions for fiscal years 2005 through
2007 included in this detailed analysis varies by 46 from the
certified conversion numbers presented on page 7 and in table 1 on page
28. The difference resulted because of changes in the actual number
of certified conversions in fiscal year 2006 within the Army and Air
Force.
[23] The number Of positions planned for conversion in fiscal years
2008 and 2009 varies slightly from the planned conversions presented
on page 7 and in table 1 on page 28. This difference resulted because
nine positions within the Army's planned conversions for fiscal
year 2009 were not included in the detailed list of conversions by type
of position and grade.
[End of section]
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