1. The Military Health System: Orientation and Overview Dr. William Winkenwerder Jr, MD Assistant Secretary of Defense for Health Affairs 29 June 2005

2. 2 Patient Care, Sustain Skills and Training Promote & Protect Health of the Force Deploy to Support the Combatant Commanders to Military Health System Mission and In Peace & War 9 Manage Beneficiary Care Deploy Healthy Force Manage Beneficiary Care Deploy Healthy Force Deploy Medical Force Manage Beneficiary Care

3. 3 Military Health System – FY 2005 Snapshot (Includes Accrual Fund payments)

4. World-Wide Fixed Asset Base 10 Medical Centers 60 Hospitals 387 Ambulatory Clinics 439 Dental Clinics 184 Veterinary Clinics 11 Medical Installations 2 Universities (Training) 7 Research Laboratories 10 Medical Centers 60 Hospitals 387 Ambulatory Clinics 439 Dental Clinics 184 Veterinary Clinics 11 Medical Installations 2 Universities (Training) 7 Research Laboratories Defense Medical Summary  Over 1,200 Fixed Assets  $20 B Replacement Value Defense Medical Summary  Over 1,200 Fixed Assets  $20 B Replacement Value

5. The MHS Research Portfolio USAMRIID, Fort Detrick Cornerstone of National Interagency Biodefense Strategy Existing USDA Existing USAMRIID New USAMRIID New NIAID New DHS NBACC Already at Detrick DoD, USAMRIID DoD, Armed Forces Medical Intelligence Center National Cancer Institute Department of Agriculture New Tenants & Construction NIH, National Institute of Allergy and Infectious Diseases (NIAID) FY03 $105M Department of Homeland Security, National Biodefense Analysis and Countermeasures Centers (NBACC), FY04/05 ~$200M National Interagency Biodefense Campus at Fort Detrick Scientific Expertise, Security & Synergy Proposed New USAMRIID Medical countermeasures to support the Joint Warfighter Medical Product Testing to Support the national biodefense consortium Proposed New USAMRIID Medical countermeasures to support the Joint Warfighter Medical Product Testing to Support the national biodefense consortium $1B over 8 Years in two Stages

6. Joint Chiefs of Staff SECDEF DEPSECDEF USD (P+R)CJCS ASD (HA) TMA Military Departments Service Surgeons General CINCs Organizational Relationships TRICARE Regional Offices

7. The Assistant Secretary for Health Affairs is the Principal Staff Assistant to the SECDEF for all DoD Health Policies (DoDD 5136.1) DoD Officer Responsible for the Effective Execution of the Department’s Medical Mission Functional Areas: –Medical Readiness; Health Benefits Programs; Medical Information Systems; Research & Development; Military Construction; Professional Development; Training Medical Personnel, Facilities, Programs, Funding, and Other Resources Within the DoD shall be subject to the Authority, Direction, and Control of the ASD(HA) ASD (HA) Responsibilities

8. Unified Medical Program Appropriations: –Medical and Dental Services to all DoD eligible beneficiaries –Medical Education and Training –Uniformed Services University –Medical Command Headquarters –Occupational and Industrial Healthcare –Veterinary Services –Specialized Services for Training of Medical Personnel –Infrastructure Maintenance and Support Services –Capitol Equipment –Information Management Systems Defense Health Program

9. TRICARE is our health care benefit program using medical treatment facilities as the main delivery system: –Augmented by a civilian network of providers and facilities ($45 B in contracted services FY 05-09) –Providing integrated health care services to our active duty, their families, retired military, their families and survivors Features of TRICARE –Uniform Benefit –Access and Quality Standards –Regional Military Managers supported by Managed Care Contractors TRICARE

10. TRICARE Regions North South West Colu TRICARE Regional Offices Washington, DC San Antonio, TX San Diego, CA National Capital Region Tidewater Fort Bragg Pope AFB Multi-Services Market Areas Fort Jackson Shaw AFB Charleston Naval Hospital AFB Clinic Colorado Springs Fairbanks Hawaii Anchorage Puget Sound Mississippi Delta

11. DHP Operations Overview as of the President’s Budget Submission ($ in thousands)

12. 12 Past and Projected Resources for the Military Medical System Source: Congressional Budget Office (Billions of 2005 dollars) FY 2005 NDAA New Benefits?

13. 13 Wall Street Journal January 25, 2005

14. 14 Why is TRICARE so popular? Lowest out-of-pocket cost

15. 15 Retirees are Increasingly Using TRICARE 66% 69% 72% 75% 78% 80% 82% 84% 85% 87% Total Retirees Under Age 65 TRICARE Users

16. 16 Beneficiary Share Percent of DHP Health Care Expenditures by Beneficiary Group With <65 Retired Users Reaching 87% by 2011 and Growth Limited to MCSC

17. 17 Future medical cost growth is a significant Department issue Military health benefit is extremely rich…individual retirees and employers are now incented to use TRICARE vs. employer coverage The military health system is becoming more efficient and fiscally accountable…but, this will not be enough Current/projected increased program expenditures cannot be funded without dramatic incursions into Service line budgets, or significant DoD “top line” increases Key Issues for Managing Benefits

18. 18 Way Ahead Informing Congressional Leadership about future health care cost growth impact Working with Administration on options Pursue politically feasible options Continue to fulfill commitments to our military service members and their families, and other beneficiaries