Looking for ways to cap the rising cost of military health-care
Hundreds of millions and perhaps billions of dollars could be saved by reforming United States military health-care services. This finding - by several top-level government and private organizations - comes as lawmakers are looking for ways to tighten up defense spending and reduce federal deficits.
The Pentagon is examining these recommendations and, in some instances, asking for legislative changes that would make them possible.
But there remain strong doubts whether fundamental reforms will occur this election year. Like military retirement benefits, medical care for the armed forces (and especially family members and retirees, who outnumber those in uniform) is a politically touchy subject. Opponents see change here as one more encroachment on benefits for the armed services which could harm recruiting and retention.
The President's Private Sector Survey on Cost Control (the Grace Commission) warned that ''the health-care costs of the Department of Defense have risen significantly over the past few years, without sign of abatement.''
The Congressional Budget Office (CBO) reported last week that the costs to cover medical benefits for almost 10 million people - most of them family members of those in uniform or military retirees - exceed $5 billion a year.
CBO analysts found that changing the system ''could save at least $2 billion over the next five years and possibly improve aspects of health-care services.''
First, it finds that charging nonactive-duty beneficiaries small fees ($5 to million dollars a year and reduce unnecessary visits.
''That such visits are free may encourage too heavy a use of outpatient medical services,'' the CBO reported.
Today, the 160 military hospitals and 300 clinics often are so crowded that many of those eligible are forced to go to private hospitals or clinics instead. Under this Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), the federal government must reimburse these civilian facilities at their higher rates.
Charging small fees could not only save money, the CBO reported, but relieve the pressure on military medical facilities and result in more timely care for those who are in need.
The Defense Department also is spending nearly $400 million a year on medical care for those who have private insurance coverage (typically dependents or retirees). This year, the Reagan administration is seeking legislation that would require private insurers to reimburse the federal government in such instances.
Collecting military medical costs from private insurers could save the federal government $1.4 billion over the next five years, according to CBO estimates. Congressional sources say insurance companies are lobbying heavily against this proposal.
Among its recommendations, the Grace Commission said the Defense Department should require those living within 40 miles of a military medical facility to use such facilities rather than going to civilian facilities under the CHAMPUS program.
This could save $1.2 billion over three years, according to this estimate.
The Grace Commission also concluded that charging military patients $10 per visit (with a maximum of $100 a year) could save another $933 million over the same period, and that charging private health insurers would bring in $1.2 billion. In general, the CBO found the Grace Commission's estimated savings overstated by about one-third.
The Pentagon is reluctant to press for such fundamental reforms, say knowledgeable sources, for fear of undercutting military morale at a time when recruiting and retention are again becoming concerns.
But the Defense Department this week did announce that it is using a computer network to ensure that military dependents and retirees who seek government-funded health care in private facilities in fact are elegible.