New Defense Health Agency is Key to Military Health System Efficiency and Effectiveness

DoD convened a task force in 2011 to evaluated MHS governance.  In a report delivered in September 2011, the task force recommended governance reform in order to achieve more efficiency and effectiveness in health care delivery.  MHS governance reform aims to supply medical support jointly, respond to fiscal challenges by achieving a sustainable health program budget, and attain greater integration of direct and purchased health care delivery systems.  A critical component to governance reform is the standing up of the DHA.

To date, each military service branch administered their own health care support services.  Consolidation will offer cost savings and efficiency, which the Pentagon estimates between $1.5 billion to $2.9 billion over the next six years for the initial consolidation phase.

Creating DHA allows DoD to enhance its ability to create and expand shared services for common business and clinical practices under the leadership of a three-star general or flag officer, Lt. General Douglas Robb.  At the same time, this action accomplishes these objectives without large-scale changes to the MHS.  According to DoD statements of intent, forming DHA is an appropriate next step to improve MHS governance and provide a structure to rein in health care costs.

DHA initial operating capability was achieved October 1, 2013, bringing into the organization 3,251 staff and 5,000 contractors, to include 532 IT personnel.  Full operational capacity will be reached by October 1, 2015. 

DHA will manage the activities of MHS including those previously managed by the TRICARE Management Activity (TMA), and offer a broader set of shared health care support services to support all military branches:

• TRICARE health plan
• Pharmacy programs
• Medical education and training 
• Medical logistics
• Facility planning 
• Health information technology 
• Medical research and development
• Facility planning 
• Public health 
• Acquisition 
• Other common clinical and business processes 

The new agency will change how the Defense Department handles procurement, oversight, and implementation of all facets of military health, including IT acquisitions.

DHA is expected to lower costs by merging services.  In October, DHA brought under one organization, facilities planning, medical logistics, health IT, as well as Tricare and pharmacy services. By October 1, 2015, when DHA becomes fully operational, it will have oversight over public health, medical acquisition, budget and resource management, medical education and training, and medical research and development. The services will keep their respective medical commands, each headed up by their particular surgeon general.

What does this mean for contractors?  Many changes are happening in the DoD health IT space:  new organizations, new personnel, and new or redirected IT initiatives.  Contractors should maximize the opportunities that these changes bring.  Contractors need to acquaint themselves with DHA organizations and their personnel to get their foot in the door or to foster existing relationships.