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“Medically Ready Force…Ready Medical Force”

Defense Health Agency Update

Lt Gen Doug Robb, USAF, MC

Director

April 2015


MHS Governance Reform:What We Are Undertaking

• Creating a more globally integrated health system – built on our battlefield successes

• Driving enterprise-wide shared services; standardized clinical and business processes that produce better health and better health care

• Implementing future-oriented strategies to create a better, stronger, more relevant medical force


DHA: How We Got Here

DoD Task Force on MHS Governance

September 2011

Recommended DHA model for MHS

governance

DEPSECDEF Planning Memo

March 2012

Directed planning for DHA implementation

DEPSECDEF “Nine Commandments” Memo

March 2013

Directed implementation of DHA

DHA PlanningWG Report

November 2012

Provided DHA and Shared Services

implementation plan for DEPSECDEF approval

“Medically Ready Force…Ready Medical Force” 3


DepSecDef Nine Commandments

1. Defense Health Agency (DHA)

a. Designated as a Combat Support Agency

b. Assumes responsibility for the functions currently undertaken by TMA

c. Assumes responsibility for shared services, functions, and activities in the MHS

2.Multi-Service Markets

a. Appoint a Market Manager in geographic medical markets determined by overlapping multi-service catchment areas

b. Market Manager’s mission: create & sustain a cost-effective, coordinated, and high-quality market health care system

c. Market Manager’s authorities: manage & allocate MSM budget, direct adoption of common MSM clinical & business

functions, and direct movement of workload & workforce as needed between/among MSM MTFs

3.National Capital Region Medical Directorate, DHA

a. Assumes authority, direction, and control over the NCR health system, to include Walter Reed National Military Medical

Center, Fort Belvoir Community Hospital, and all other MTFs that are determined to reside within the NCR market

b. Directors of the WRNMMC, the FBCH, and the other MTFs will be selected by the USD(P&R) (or, if delegated, the

ASD(HA), Director, DHA, or Director, NCR Med Dir) from nominees provided by the Military Departments

c. Military personnel for the WRNMMC, the FBCH, and the other MTFs will be provided by the Military Departments according

to manning documents maintained by the DHA

4

MTFs

ArmyOperational

Units

NavyOperational

Units

ArmyMEDCOM

MTFs MTFs

MarineOperational

Units

Air ForceMAJCOMs

Air ForceOperational

Units

CNO CMC

NavyBUMED

CJCS

Secretary of Defense

Sec Army Sec NavySec

Air Force

CSAFCSA

MHSERUSD(P&R),

Vice Chiefs

ASD(HA)

SGs, JSS

MDAG

MPOG MOG MBOG

PDASD,

Deputy

SGs,

JSS,

DD, DHA

Personnel Operations Budget

MDAG,

DASDs,

JSSPAC

SMMAC

USD(P&R)

ASD(HA)

Defense Health Agency

NCR Directorate

MTFs

USUHS

Combat Support

Agency

Responsibilities

Policy & Oversight

ExecutionArmy

SGNavy

SGAir Force

SG

5

Military Health System

Defense Health AgencyMHS Governance Service Medical Organization

Defense Health AgencyLeadership Team

6

Lt Gen Douglas Robb

Director

Mr. Paul Hutter

Deputy Director

CMDCM Terry Prince

Senior Enlisted Advisor

MG Richard Thomas

Director

Healthcare Operations

RADM Bruce Doll

Director

Research & Development

Brig Gen Robert Miller

Director

Education & Training

RADM Raquel Bono

Director

NCR Medical

Mr. David Bowen

Director

Health IT

Mr. Joseph Marshall

Director

Business Support



DHA as a Combat Support AgencyTranslation: DHA is to medical as DLA is to logisticsas DISA is to communications

8


Military Health System Strategic Plan


- 10 -

MILITARY HEALTH SYSTEM

STRATEGY MAP

8

- 11 -


STRATEGY MAP

9

EN

DS

Ready Medical

Force

Medically

Ready Force

- 12 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

Healthy

People

Medically

Ready Force

Ready

Medical Force

10

- 13 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

Improve

Stewardship

Medically

Ready Force

Ready

Medical Force

Improve Clinical

Outcomes and

Consistent

Patient

Experience

11

Healthy

People

- 14 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

Improve

Stewardship

Healthy

People

Medically

Ready Force

Ready

Medical Force

Improve Clinical

Outcomes and

Consistent Patient

Experience

12

- 15 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

PLS5

Improve

Stewardship

PLS3

Healthy

People

PLS1

Medically

Ready Force PLS2

Ready

Medical Force

PLS4

Improve Clinical

Outcomes and

Consistent Patient

Experience

13

Align Resources Against Strategic

Priorities \

- 16 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

Improve

Stewardship

Healthy

People

Medically

Ready Force

Ready

Medical Force

Improve Clinical

Outcomes and

Consistent Patient

Experience

14Align Resources Against Strategic Priorities

and Ensure Fiscal Accountability

Recruit, Train, & Develop

the Total Force to Meet

Future Challenges

Improve

Information

Infrastructure

OC4

Improve Process-

Based

Management

OC5

Align Facilities, Personnel,

and Capabilities to Optimize

Market Performance

Optimize DHA as

a Support

Organization

- 17 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

Improve

Stewardship

Healthy

People

Medically

Ready Force

Ready

Medical Force

Improve Clinical

Outcomes and

Consistent Patient

Experience

15Align Resources Against Strategic Priorities




Future Challenges

Improve

Information

Infrastructure

Improve Process-

Based

Management



Market Performance

Optimize DHA as

a Support

Organization

- 18 -


STRATEGY MAP

WA

YS

EN

DS

ME

AN

S

PLS5

Improve

Stewardship

IP4

Enhance

Strategic

Partnerships

IP8

Improve Comprehensive Primary CareIP3

Enhance Emerging

Medical Capabilities

in a Joint

Environment

IP11

Reform TRICARE

F1

Align Resources Against Strategic Priorities


PLS3

Healthy

People

PLS1

Medically

Ready Force PLS2

Ready

Medical Force

IP12

Align Incentives to Achieve Outcomes

IP9

Improve SafetyIP6

Expand the

Boundaries of

Healthcare

OC5



Market Performance

IP10

Optimize & Standardize Access & Other

Care Support Processes

OC1



Future Challenges

OC3

Optimize DHA as

a Support

Organization

OC2

Improve

Information

Infrastructure

OC4

Improve Process-

Based

Management

PLS4

Improve Clinical

Outcomes and

Consistent Patient

Experience

Fin

an

cia

lO

rgan

izati

on

al

Cap

ab

ilit

y

IP5

Improve

Healthy

Behaviors

IP7

Improve Condition-Based Quality Care

IP2

Improve

Operational

Medicine

IP1

Improve

Global Health

Engagement

16

WA

YS

EN

DS

ME

AN

S

(En

ab

lers

)

PLS5

Improve

Stewardship

IP4

Enhance

Strategic

Partnerships

IP8

Improve Comprehensive Primary Care

IP3

Enhance

Emerging Medical

Capabilities in a

Joint Environment

IP7

Improve Condition-Based Quality Care

IP11

Reform TRICARE

IP2

Improve

Operational

Medicine

F1

Align Resources Against Strategic

Priorities and Ensure Fiscal

Accountability

PLS3

Healthy

People

PLS1Medically

Ready Force

PLS2Ready

Medical Force

IP12

Align Incentives to Achieve Outcomes

IP9

Improve

Safety

IP1

Improve

Global Health

Engagement

IP6

Expand the

Boundaries of

Healthcare

OC5

Align Facilities,

Personnel, and

Capabilities to Optimize

Market Performance

IP5

Improve

Healthy

Behaviors

IP10

Optimize & Standardize Access &

Other Care Support Processes

OC1

Recruit, Train, &

Develop the Total

Force to Meet Future

Challenges

OC3

Optimize DHA

as a Support

Organization

OC2

Improve

Information

Infrastructure

OC4

Improve

Process-Based

Management

PLS4Improve Clinical Outcomes and

Consistent Patient Experience

Fin

an

cia

lIn

tern

alP

rocess

Org

an

izati

on

al

Cap

ab

ilit

y

Pati

en

t/L

ead

er/

Sta

keh

old

er

Business Support

Education & Training

Healthcare Operations

Health Information Technology

Research & Development

National Capital Region

DHA

Directorates

Contracting

Human Resources

Manpower

Defense Healthcare

Management System

Special Staff and DHMS

Medical force ready to deliver

health services anywhere, anytime,

so that the total force is medically

ready for, and protected during,

any operational mission

Better Health Better Care Lower Cost

Improve the health of our

population by fostering healthy

lifestyles, preventing illness,

and reducing the impact of

sickness and injury

Provide safe and effective

patient centered healthcare

that improves clinical

outcomes

Reducing the total cost of

the MHS by continuously

improving efficiency and

eliminating waste

1. DHA is strongly aligned to the MHS Strategy Map

2. DHA is foundation that supports the MHS as an integrated system

10


DHA Shared Services

20

COL Guy Kiyokawa

Chief of Staff, DHA


DHA Shared Services

21


Shared Services SavingsFive Year Defense Plan (2015-2019)

Shared Service IOC FY15-19 Savings

FACILITIES 1 OCT 13 $537 M

MEDICAL LOGISTICS 1 OCT 13 $189 M

HEALTH IT 1 OCT 13 $265 M

HEALTH PLAN 1 OCT 13 $456 M

PHARMACY 1 OCT 13 $1,224 M

CONTRACTING 1 MAR 14 $136 M

BUDGET & RESOURCE MGMT 1 FEB 14 $279 M

MEDICAL RESEARCH & DEV 1 JUN 14 $98 M

MEDICAL EDUCATION & TNG 10 AUG 14 $ 5 M

PUBLIC HEALTH 1 OCT 14 $293 M

TOTAL $3.482 BILLION

22


FY 2014 Shared Service Savings:Covered DHA Initial Investment

The DHA has achieved cost savings and paid for initial investments in FY 2014,

resulting in net savings of approximately $236 million.

23


Shared Services FOC CriteriaDeveloped through MHS Gov (Future Shared Services Team)

Criteria Met

1.

The military Services agree they are receiving the services as agreed in the Coordinated Concept of

Operations (CCONOPS). The Shared Service has a mechanism (working group, committee, etc.) to

elicit feedback from Services and to communicate with the Services.

2.For product line or initiative (one entry for each) as agreed to in the (CCONOPS), the Shared Service

has work underway and is actively managing actions associated with this product line or initiative.

3.The Shared Service has received the resources identified in the CCONOPS, or resources have been

sufficiently programmed to carry out the operation of this Shared Service

4.The Shared Service developed performance metrics to help manage actions, report progress,

identify gaps, and identify areas for improvement

5. There is no substantive change required to the CCONOPS of the Shared Service

6. The Shared Service has a vision and mission statement

24


DHA 2nd Year Focus Areas

• Achieve DHA FOC NLT 1 OCT 2015

• Transition 10 Shared Services from IOC to FOC

• Assess the “11th Shared Service” and beyond

• Centers of Excellence and Executive Agents

• Sustain/Monitor efforts to achieve FY15-19 savings of $3.482B

• Develop & Sustain an MHS Performance Management System to drive

MHS system-wide continuous improvement – improving quality and safety

where needed

• Enable DoD’s Electronic Health Record Modernization

• Institute the Next Generation TRICARE Health Plan (T-2017)

• Institute an integrated DHA Acquisition Structure

• Conduct DHA Manpower Assessments to properly align resources

• Introduce a common cost accounting structure

25

Facilities

Mr. John A. Becker

Director, Facilities Division

26“Medically Ready Force...Ready Medical Force”


Facilities Shared ServiceFull Operating Capability (FOC)

Status: FOC effective 3 March 2015 Governance Model: Collaborative enterprise management in coordination with

Services providing integrated world-class Health Facility Life Cycle Management (FLCM) for the Military Health System

MHS Governance Structure: Health Facilities Coordinating Council (HFCC) and Medical Business Operations Group (MBOG)

BLUF: In close collaboration with the Services and Design/Construction Agents, DHA Facilities is improving FLCM through standardization, improved processes, and implementation of a Company Operating Model (CONOPS)

Highlights: (1) Standardized demand signal and prioritization process for MilCon requirements (2) Standardized Sustainment, Restoration, and Modernization programming models (SRM) (3) Standardized IO&T programming model (4) DHA Facilities support to e-MSMs for future capital requirements

Challenges: (1) Reacting to and accommodating impact of external forces on long lead time MilCon planning, programming, and budgeting. (e.g. Force Structure changes, mission changes. etc.) (2) Modernization and replacement of an aging inventory



Facilities Shared ServiceBCA and Performance Measures

28

Area / Type MeasureReporting

FrequencyNotes on Current Status

Current StatusExpected

Completion

Date

Cost / BCASavings achieved vs. savings

projectedAnnually

Re-baseline savings to PB15 funding levels and

revalidation of costs in progressFY14 Q2

Quality / BCA

Facility Condition Index (3 Year Implementation) Quarterly

Measures levels of requirements in DMLSS-FM relative

to facility replacement value; “Builder” implementation

complete in FY17

FY14 Q2

Quality / BCA Facility Functionality Index Quarterly

“Builder” system implementation reflects facility

functionality related to accreditation (safety, req’d

spaces, adjacencies)

FY15 Q3

Quality / BCA Asset Productivity Index QuarterlyExpanding portfolio management to include productivity

data linked to facilitiesFY15 Q3

Cost / Perf

Measure

% of projects performed within cost & schedule

MonthlyProgram oversight data and targets established by &

reviewed monthly with Agents & ServicesFY14 Q3

Quality / BCACustomer Satisfaction Survey with

facility environment of careQuarterly

TRISS Reports reflect patient experience of cleanliness

and quietness of hospital environFY15 Q1

Reporting data

against targetsUnder

development

Developed, but no

baseline

Baseline and

targets exist

Baseline exists,

but no target


Facilities Shared Service BCA Costs and Projected Savings

29

Data Reviewed by the

MBOG: 25 Feb 15FY14-19 Projected Net Savings with FY14 Actuals

Actual: $(4.63)

FY14 - $311M IO&T Savings for MHS Redistribution

*FY13 YE bought ahead $40M in

Implementation Costs

Medical Logistics

30

CAPT Bernie Poindexter

Director, Logistics Division

“Medically Ready Force...Ready Medical Force”


Medical Logistics (MEDLOG) Shared Service

Status: FOC effective 3 March 2015

Governance Model: Corporate management and compliance oversight of joint MEDLOG initiatives related to medical supply, equipment, and services

MHS Governance Structure: Defense Medical Logistics Proponent Committee (DMLPC) and Medical Business Operations Group (MBOG)

BLUF: In close collaboration/coordination with the Services and DLA, DHA MEDLOG is taking ‘cost out’ of the medical supply chain by eliminating waste (price, excess inventory, and process) and reducing unwarranted variation through strategic sourcing and standardization

Highlights: (1) Improved ordering compliance for 1,415 standardized products (2) growing e-commerce solutions for provider preference items at significant discounts (3) Healthcare Technology Joint Requirements Assessments (JRA) for the eMSMs (NCR planned for May 15) and (4) MEDLOG Support for NCR-MD

Challenge: Medical Device (60,000+ across MHS) compatibility (interoperability and integration) with the EHR



MEDLOG Shared ServiceBCA and Performance Measures

32

Area / Type MeasureReporting

FrequencyNotes on Current Status

Current StatusExpected

Completion

Date

Cost Gross Savings Quarterly

As of 31 Jan 2015:

FY 14: Actual gross savings = $24.32M

FY 15 Q1: Projected gross savings = $7.21M

Completed

Cost

Use of Incentive Agreements (Formerly % of

Procurement of Standardized Products) Quarterly

Quarter 1 Quarter 2 Quarter 3 Quarter 4

CompletedFY 14: 77.2% 79.4% 80.8% 81.2%

FY 15: 83.9% - - -

Cost Use of eCommerce Quarterly

Quarter 1 Quarter 2 Quarter 3 Quarter 4

FY 14: 68% 67% 67% 70%

FY 15: 72% - - -

Cost Total Joint Requirements Assessment Cost Savings Annually Reported Annually – Metrics Available Q2 FY15 Pending

Cost Total Cost Savings from Equipment Group Purchases AnnuallyFY 14 Army Air Force Navy NCR MD

Completed$5.15M $3.18M $.79M $1.06M $0.096M

Cost DoD Service Contracts Annually Reported Annually – Metrics Available Q2 FY15 Pending

Cost Maintenance Contract Costs to Acquisition Cost Ratio Annually Reported Annually – Metrics Available Q2 FY15 Pending

Quality Average Age of Equipment in DoD Inventory Annually Reported Annually – Metrics Available Q2 FY15 Pending

Reporting data

against targets

Under

development

Developed, but no

baseline

Baseline and

targets exist

Baseline exists,

but no target


BCA Category FY14FY14

RealizedFY15 FY16 FY17 FY18 FY19 Total

Primary Drivers of Implementation

Costs

Supplies

Savings ($M) 19.13 19.17 26.29 33.12 36.29 43.61 50.55 208.99 • IT investment (RDT&E)

Cost ($M) 5.27 3.64 4.00 1.86 - - - 11.13

Net Savings ($M) 13.86 15.53 22.29 31.26 36.29 43.61 50.55 197.86

Health Care

Technology

Savings ($M) 0.00 5.15 4.47 11.77 16.51 17.75 18.09 68.59 • IT investment (RDT&E)

• Contractor support (O&M)

• TDY Funding (O&M)Cost ($M) 0.41 0.76 1.55 1.11 0.92 0.95 0.93 5.87

Net Savings ($M) -0.41 4.39 2.92 10.66 15.60 16.80 17.15 62.72

Services

Savings ($M) 0.00 0.00 0.38 0.77 1.18 1.59 2.04 5.96

Cost ($M) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Net Savings ($M) 0.00 0.00 0.38 0.77 1.18 1.59 2.04 5.96

GRAND TOTAL

NET SAVINGS

Annual ($M) 13.45 19.92 25.59 42.69 53.07 62.01 69.73 266.54

Cumulative ($M) 13.45 19.92 39.04 81.73 134.80 196.81 266.54

RTC Savings

Projections

Annual ($M) -5.68 19.92 7.05 24.96 41.73 52.51 62.78 183.34

Cumulative ($M) -5.68 19.92 1.37 26.33 68.06 120.57 183.35

MEDLOG Shared ServiceFY 14 Savings vs POM 15-19 Submission

33

Actual FY 14 Annual Net Savings

33

$19.92

*Additional savings through cost avoidance are to be reinvested within the Shared Service

Pharmacy

Dr. George E. Jones, Jr.

Chief, Pharmacy Operations Division


Status: FOC effective 3 March 2015

Governance Model: Corporate management and compliance oversight of Pharmacy initiatives related to all aspects of pharmacy benefit delivery

MHS Governance Structure: Pharmacy Work Group (PWG) and Medical Operations Group (MOG)

BLUF: A collaborative effort with the Services to reduce unwarranted variation through deliberate planning and consistent messaging and measurement of pharmacy delivery

Highlights: (1) Implemented three successful initiatives in FY14 - $215M savings (2) Enhanced communication with quarterly world-wide pharmacy webinars (3) Fully deployed MTF capability to accept electronic prescriptions from community providers (4) Developed and implemented with the Services a uniform process for prescription transfers (5) Supporting pharmacy within and across eMSMs

Challenge: Managing impact of external forces on program execution (e.g. New Drugs; Trends in therapy – compounding; Drug shortages)


Pharmacy Shared Service

Full Operating Capability (FOC)

The MHS Spent $8.06B on pharmacy related expenditures in FY14; however, we would have spent $8.28B if not for specific initiatives undertaken by DHA Pharmacy

36 36

Why have pharmacy costs increased despite pharmacy’s cost saving initiatives?

Without pharmacy’s cost saving initiatives, the enterprise would have spent an additional $215M in FY14

Channel Management (TFL Pilot)

Saved $74.8M

Formulary Management

Saved $100.3M

Compliance to Purchasing Rules

Saved $39.9M

We spent:

$8.06B

Instead of:

$8.28B

Specialty Drugs

Cost ~$121M1

Compounds

Cost ~$512M3

• This issue is not unique to the MHS; spending on specialty drugs increased by 14.1% and 14.7% in the

commercial health industry and Medicare respectively in 20132

• Compound spending has increased throughout the industry; Express Scripts International, the largest

pharmacy benefits manager, reported that its quarterly spending on compounds increased over 500% from

2012 to 2014 (from $28M to $171M per quarter) 4


“ Medically Ready Force…Ready Medical Force”

Pharmacy Shared ServiceBCA and Performance Measures

37

Reporting data

against targets

Under

development

Developed, but no

baseline

Baseline and

targets exist

Baseline exists,

but no target

# Area / Type MeasureReporting

FrequencyNotes on Current Status Current Status

Expected

Completion

Date

1 Cost

Maintenance medication refills filled at all

points of service with the ability to drill down

to the Enhanced Multiservice Market Level

(eMSM) and by distribution of enrollment

status

Quarterly - Complete

2 Cost

MTF, retail, and mail order market share

overall with the ability to drill down to the

eMSM level and by distribution of enrollment

status

Quarterly - Complete

3 CostThe percent of pharmacy spend directed to

the retail point of serviceQuarterly - Complete

4 Cost

Net pharmacy cost to government per

member per month (PMPM) at the eMSM

levelQuarterly - Complete

5 Cost

Percentage of drugs purchased as generic

when generic is identified as a preferred

agent, per MTF outpatient pharmacyMonthly - Complete

6 Cost

Percentage of compliance with purchasing

drugs via national contracts, per MTF

outpatient pharmacyMonthly - Complete

Pharmacy Shared ServiceFY 14 – 15 Savings vs POM 15-19 Submission

38“Medically Ready Force…Ready Medical Force” 38



Primary Drivers of


#1: Phase I:

Eliminate Retail

Refills

Savings ($M) $625.05 $74.8 $812.56 $826.38 $842.08 $859.76 $878.68 $4,844.51 • New drug costs at Home Delivery

and MTF outpatient pharmaciesCost ($M) $532.05 $0.00 $691.65 $703.41 $716.78 $731.83 $747.93 $4,123.64

Net Savings ($M) $93.00 $74.8 $120.91 $122.97 $125.30 $127.93 $130.75 $720.86

#2: Phase II:

Eliminate Retail

Refills, Optimize

MTF Capacity

Savings ($M) $0.00 $0.00 $0.00 $13.19 $26.88 $41.18 $56.11 $137.36 • New drug costs at Home Delivery

and MTF outpatient pharmaciesCost ($M) $0.00 $0.00 $0.00 $7.39 $15.06 $23.06 $31.43 $76.94

Net Savings ($M) $0.00 $0.00 $0.00 $5.80 $11.82 $18.12 $24.68 $60.42

#3: Enable MTF

compliance to

Pharmacy’s

centralized drug

purchasing rules

Savings ($M) $8.00 $39.9 $16.22 $24.75 $33.63 $42.92 $43.86 $169.38 • Personnel needed to implement

the enabling IT solutionCost ($M) $0.62 $0.00 $0.63 $0.64 $0.65 $0.67 $0.68 $3.90

Net Savings ($M) $7.38 $39.9 $15.59 $24.11 $32.97 $42.25 $43.18 $165.48

Table continues on next slide.

$-

$500

$1,000

$1,500

$2,000

FY14 FY15 FY16 FY17 FY18 FY19

Do

llars

(in

Mill

ion

s)

Risk- and Inflation-Adjusted Projected Savings, FY14-19

Annual ($M)

Cumulative ($M)

Actual FY14 Annual Net Savings

Pharmacy Shared ServiceFY 14 – 15 Savings vs POM 15-19 Submission (cont.)

39 39



Primary Drivers of


#4: DoD Pharmacy

& Therapeutics

Committee (P&T

Committee)

formulary

management

Savings ($M) $60.00 $100.3 $60.84 $61.87 $63.05 $64.37 $65.79 $375.93 • To be determined;

implementation costs unknown

at this timeCost ($M) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Net Savings ($M) $60.00 $100.3 $60.84 $61.87 $63.05 $64.37 $65.79 $375.93

#5: Suspend

coverage of

newly approved

FDA drugs

Savings ($M) $0.00 $0.00 $4.06 $8.25 $8.41 $8.58 $8.77 $38.07 • To be determined; proposed

pharmacy regulation Cost ($M) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Net Savings ($M) $0.00 $0.00 $4.06 $8.25 $8.41 $8.58 $8.77 $38.07

#6: Centralize

pharmacy

automation

contracts




Net Savings ($M) $0.10 $0.00 $6.69 $6.81 $6.94 $1.61 $1.64 $23.79

#7: Implement a

System of Satellite

MTF Pharmacy

Locations




Net Savings ($M) $0.00 $0.00 $0.00 -$0.06 $0.03 $0.04 $0.06 $0.07

GRAND TOTAL

NET SAVINGS

Annual ($M) $160.48 $215.0 $208.09 $229.80 $248.48 $262.87 $274.82 $1,384.54

Cumulative ($M) $160.48 $215.0 $368.57 $598.37 $846.86 $1,109.72 $1,384.54 --


Metric #5 – Percent Generic: Tracked Drugs

40 40“Medically Ready Force…Ready Medical Force”

Metric #6 – National Contract Compliance

75.1%

86.7%

0%

20%

40%

60%

80%

100%

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-1

4

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

Air Force Army Navy Overall



Outpatient Compound Costs –

Fraud Investigations

Multiple PI investigations ongoing



43

Mr. David M. Bowen

Director, Health Information Technology

“ Medically Ready Force…Ready Medical Force”

Health Information Technology (HIT)BLUF / Challenges / Wins

BLUF: HIT has an “all-in” approach—unique from other Shared Services. HIT is working towards Full Operating Capability (FOC)—1 Oct 2015

Challenges: (1) Managing cultural change—TMA and Services had distinct processes (2) Standardizing the HIT infrastructure eliminating duplicative applications (3) Disrupting historical HIT funding and approval processes (4) Upgrading IT infrastructure necessary to support the Electronic Health Record (5) Establishing/maintaining the trust of our customers that we’ll do this right!

Wins: (1) Two huge efforts: HIT stand-up and EHR support —we haven’t broken anything! (2) FY14 – exceeded business case by $54 million, FY15 - saved $20M to date (3) Developed and implemented metric reporting system for 90-day review actions (4) Established financial processes; gaining visibility in MTF IT spend/contracts



Area/Type MeasureReporting

FrequencyNotes on Current Status Current Status

Expected

Completion

Date

BCA Savings Shared Services Savings Achieved MonthlyPreviously reported savings achieved in FY14 was $39.19M and has

been revised to $29.50M to reflect execution emerging requirements

Currently

Reporting

Cost

Total IT costs as a percentage of MHS budget Annually

DHP including EHR and excluding purchased care.

FY14 Budget-based Baseline=11%. Future Years Target = 15%.

Actual Execution FY14 = 11 %

Currently

Reporting

Percentage of IT spending allocated to

delivering new capabilitiesAnnually

FY14 Budget-based Baseline= 14%. Future Years Target = 29%.

Actual Execution FY14 = 14 %

Currently

Reporting

Speed Percentage of software products deployed on

time Quarterly

Quarterly reporting based on Annual Performance Plan (APP)

deployment data. Target set at 82% for FY15. Actual deployment

percentage for FY15 Q1 was 83%.

Currently

Reporting

Quality Percentage of systems meeting system

availability standardsQuarterly

Quarterly reporting based on APP system availability standards and

data, Target set at 90%. Actual percentage of systems that met

their availability targets for FY15 Q1 was 80%.

Currently

Reporting

Strategic

AlignmentAlignment of IT with MHS strategic objectives Annually

Preliminary alignment to draft MHS objectives completed.

Dependency: Final published MHS objectives

Ongoing

refinement

Customer

Service

Executive Satisfaction with overall HIT

Directorate performanceQuarterly

Third Executive Satisfaction Survey Q4 Survey was completed in

January 2015 due to scheduling delays

Currently

Reporting


Key Measures

Reporting data

against targets

Under

development

Developed, but no

baseline

Baseline and

targets exist

Baseline exists,

but no target

45


Funding will need to be provided each year in order to produce net savings in FY16, and reach annual steady-state net savings in FY19.


RealizedFY15

FY15

Realized FY16 FY17 FY18 FY19 TotalPrimary Drivers of Implementation

Costs

#1: Reengineering

of IT Management

Savings ($M) $3.31 $3.80 $5.67 $0.00 $5.77 $5.88 $6.00 $6.13 $32.76 • IT costs to invest in tools (portfolio

management, EA) needed to support and

automate reengineered business

processes.

Cost ($M) $4.37 $0.00 $2.58 $0.00 $2.10 $2.14 $2.18 $0.00 $13.37

Net Savings ($M) ($1.07) $3.80 $3.09 $0.00 $3.67 $3.74 $3.82 $6.13 $19.38

#2: Infrastructure

Consolidation

Savings ($M) $3.05 $18.76 $6.19 $0.00 $14.68 $16.56 $16.91 $74.71 $132.10 • Contract support for transition planning

and PMO (e.g., product line analysis,

scheduling, risk management).

• IT costs for product line consolidation

(e.g., additional servers, storage,

bandwidth).

Cost ($M) $0.00 $13.78 $17.53 $0.00 $13.63 $28.85 $31.64 $0.00 $91.65

Net Savings ($M) $3.05 $4.98 ($11.34) $0.00 $1.05 ($12.29) ($14.73) $74.71 $40.45

#3: Portfolio

Rationalization

Savings ($M) $0.00 $20.72 $21.33 $0.00 $40.24 $66.21 $67.60 $69.08 $264.46 • IT costs for decommissioning and

promotion of system to enterprise level

(e.g., migrating/archiving data, increasing

capacity of target system, hardware

disposal, training, change management,

BPR).

Cost ($M) $23.98 $0.00 $24.32 $0.00 $32.97 $0.00 $0.00 $0.00 $81.27

Net Savings ($M) ($23.98) $20.72 ($2.99) $0.00 $7.27 $66.21 $67.60 $69.08 $183.19

GRAND TOTAL

NET SAVINGS

Annual ($M) ($22.00) $29.50 ($17.38) $0.00 $11.12 $56.48 $55.86 $148.75 $232.83

Cumulative ($M) ($22.00) $29.50 ($39.38) $0.00 ($28.26) $28.22 $84.08 $232.83 --

Steady state

Break-even


FY14 Savings vs FY15-19

Projected Savings

46

Adjusted FY16-20

Actual FY14-15 Annual

Net Savings

TRICARE Health Plan

47

CAPT Edward Simmer

Deputy Chief, TRICARE Health Plans


TRICARE Health Plans Shared ServicesBLUF / Challenges / Wins

BLUF: (1) Goal: To fully integrate purchased care and direct care systems On schedule to achieve FOC 1 Aug 2015

Challenges: (1)Sole source contract extension in North limits ability to negotiate changes(2) Statutory/regulatory limitations on innovation

Wins: (1) Integrated Services into T-2017 and T-20xx development, making them full partners in this process(2) TRICARE Service Center closure completed with no negative impact on customer satisfaction(3) Other Health Insurance centralized initiative about to launch(4) Established mission essential metrics focused on access, safety, readiness

48


Health Plan

Progress Update

Milestone Indicator SuspenseRevised

SuspenseCompleted

Tra

ns

itio

n

Complete organization review of functions with Office

of Strategy Management 15 Jul 14

Develop unit manning document IAW guidelines

(org review started)1 Oct 15

Develop/update position descriptions 1 Oct 15

Inventory contracts and begin identifying opportunities

for rationalization for requirements1 Oct 15

Implement performance plans aligned to organizational

goals

31 Mar 14

Clo

se

TR

ICA

RE

Serv

ice

Cen

ters

(T

SC

)

Develop plan and metrics to monitor closure of the TRICARE Service Centers (TSC)

1 Aug 13 31 Aug 13 30 Jun 14

Provide quality / satisfaction data on TRICARE call centers 1 Aug 13 31 Dec 13 30 Jun 14

Issuance of contract modifications 29 Nov 13 29 Nov 13 22 Nov 13

Conclusion of Contract Negotiations 4 Mar 15 TBD

Enhance Beneficiary Web Enrollment (BWE) functionality 30 Sept 14 31 Mar 15

Overall Status:Complete On Schedule At Risk of Missing Suspense

49


Health Plan

Progress Update (Continued)


SuspenseCompleted

Oth

er

Healt

hIn

su

ran

ce

(OH

I)

Develop PWS and Market Research 1 Oct 13 11 Mar 14 11 Mar 14

Document and deploy DEERS changes

- New or revised reports

- Technical specifications for

data files

1 Apr 14 27 Mar 14

Modify OHI business processes

- MCSC processes

- Direct Care processes

- Pre-ABACUS

- Post-ABACUS

1 Feb 14 1 Apr 14 27 Mar 14

Award DMDC Task Order Contract and implement OHI

discovery

- Award of task order

- Phase-In activities

1 Apr 14 1 May 14 30 Apr 14

Award DHA Contract and implement OHI discovery

- Award of task order

- Contract protest

- Phase-In activities

15 Sept 14 3rd Qtr FY15

Overall Status:Complete On Schedule At Risk of Missing Suspense

50


Health Plan

BCA Costs and Cost Avoidance

51


Health Plan

BCA Costs and Projected Cost Avoidance

*Risk-Adjusted Net Savings

** May be adjusted up for FY15

once OHI collection begins.

As of 4 Mar 2015

BCA Category FY14 FY15 FY16 FY17 FY18 FY19 Total

Primary Drivers

of

Implementation

Costs

#1 TSC:

Savings ($M)0.0 11.0 22.0 22.0 48.8 50.2 154.0

Contract-related

costs

Cost ($M) 5.5 0.0 0.0 0.0 0.0 0.0 5.5

Net Savings ($M)-5.5 11.0 22.0 22.0 48.8 50.2 148.5

#2 OHI:

Savings ($M)0.0 0.0** 46.7 47.6 48.6 49.7 192.6

Contract-related

costs

Cost ($M) 8.1 7.8 2.8 2.5 2.8 2.8 26.8

Net Savings ($M)-8.1 -7.8 43.9 45.1 45.8 46.9 165.8

GRAND TOTAL Annual ($M)-13.6 3.2 65.9 67.1 94.6 97.0 314.3

NET SAVINGS Cumulative ($M)-13.6 -10.4 55.5 122.6 217.3 314.3

314.3

RTC

PROJECTION

Annual ($M)48.0 85.0 88.0 91.0 94.0 97.0 503.0

Cumulative ($M)48.0 133.0 221.0 312.0 406.0 503.0 503.0

+/- FROM RTC

PROJECTION

Annual ($M)-61.6 -81.8 -22.1 -23.9 0.6 0.0 -188.7

Cumulative ($M)-61.6 -143.4 -165.5 -189.4 -188.8 -188.7 -188.7

52


Budget & Resource Management

53

Mr. Robert Moss

Budget & Resource Management Division

Budget & Resource ManagementBLUF / Challenges / Wins

BLUF: (1) Automated Third Party Billing and collection capability by 1 July 2015 (2) Standardize medical record coding policies/procedures for all three Military Services by 31 Mar 2015 (3) Initial implementation of common cost accounting structure by 1 Oct 2015

Challenges: (1) Operating billing and collection services as we transition to the DISA directed cloud environment (2) Development of common cost accounting structure with three distinct Military Services’ accounting systems (3) Transitioning to HIPAA-compliant remote medical record coding capability

Wins: Services total cooperation in developing single billing/collection capability and unanimity in medical record coding policies/procedures

54


Budget and Resource ManagementProduct Line Progress


SuspenseCompleted

Imp

lem

en

tati

on

of

Co

mm

on

Co

st

Ac

co

un

tin

g

Str

uc

ture

Award a contract for implementation support of CCAS Jun 14 - Jun 14

Initial implementation of CCAS with the services Jan 15 May 15 -

Full implementation and operation of CCAS Sep 15 - -

Imp

lem

en

t J

oin

t

Billin

gS

olu

tio

n

(AB

AC

US

)

Award of ABACUS contract Jan 14 - Jan 14

Deployment of ABACUS Outpatient Third Party Collections

(TPC) Module (ATO 5 Mar 15)Jun 14 Jun 15 -

Deployment of ABACUS Inpatient TPC Module (ATO 5 Mar

15)Sep 14 Jun 15 -

Esta

bli

sh

Med

ical C

od

ing

Pro

gra

m O

ffic

e

Establish Coding Working Group with approved charter Oct 14 - Oct 14

Establish draft remote coding CONOPS to coordinate with

HIT/DHSSDec 14 TBD -

Develop single DoDi guidance (Draft) on Medical Services

Documentation, Coding, and ComplianceMar 15 - -

Finalize and implement approved single DoDi guidance Mar 15 Oct 15 -

Develop a DHA Central IDIQ contract Sep 15 TBD -

Complete On Schedule At Risk of Missing Suspense

Requires back-up slide for explanation of risk and way ahead

55




Primary Drivers of

Implementation

Costs

Implementation of a

Common Cost

Accounting Structure

Savings ($M) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 • Contract support

Cost ($M) $1.04 $1.04 $0.00 $0.00 $0.00 $0.00 $0.00 $1.04

Net Savings ($M) ($1.04) ($1.04) $0.00 $0.00 $0.00 $0.00 $0.00 ($1.04)

Implementation of a

Joint Billing Solution

(ABACUS)

Reimbursements ($M) $6.02 $0.00 $43.65 $58.84 $59.95 $61.21 $62.56 $292.23 • Contract Support

Cost ($M) 1,2,3 $19.83 $19.83 $15.27 $15.85 $15.64 $14.77 $11.76 $93.12

Net Reimbursements ($M) ($13.81) ($19.83) $28.38 $42.99 $44.31 $46.44 $50.80 $199.11

GRAND TOTAL NET

REIMBURSEMENTS

Annual ($M) ($14.85) ($20.87) $28.38 $42.99 $44.31 $46.44 $50.80 $198.07

Cumulative ($M) ($14.85) ($20.87) $13.53 $56.52 $100.83 $147.27 $198.07 --

Budget and Resource ManagementFY 14 – 15 Reimbursements vs POM 15-19 Submission

56 56

1Initial investment costs at IOC were $6.89M due to procurement sensitivity of ABACUS; Upon award, ABACUS investments costs were $79.265M (O&M funded, Program Mgmt, Information Assurance), as detailed

in the ABACUS Briefing for Lt Gen Robb dated 2 April 2014 2Additional lifecycle costs were $5.47M, as detailed in the DHSS ABACUS IPR Final briefing dated 17 June 2014 3Additional costs to sustain TPOCs due to

ABACUS delays (3 mths FY14 and 12 mths FY15) on 18 Nov 2014


Procurement/Contracting

57

Mr. Eric Thaxton

Deputy Director of Acquisition Division for Procurement

ContractingBLUF / Challenges / Wins

BLUF

(1) Contracting shared service strives to generate efficiencies through strategic sourcing of common requirements.

(2) On Schedule to achieve Full Operating Capability 1 Oct 2015

Challenges: Moving toward strategic sourcing while executing non strategic requirements

Wins

(1) Enhanced Operating Model implementation 1 April; includes 101 improvement initiatives in Product Lines 1 and 2

(2) Agency wide contract data call completed; establishes demand signal rationalization process

(3) Cost savings of $12.75M in personnel implementation costs

58

Contracting Shared ServicePerformance Metrics*

59

# Metric DescriptionReporting

Frequency

Current

StatusStatus Notes

Expected

Completion

Date

1Savings attributed to DoD

strategic sourcing strategies

Cost of services/supplies obtained in

baseline minus strategically sourced

services/supplies

Bi-Annual

Savings will not be generated until after

DHA MATOs for Q and R services are

awarded in FY17 and workload migrates

in FY18

Q1 FY19

2

Savings attributed to

developing centralized

strategic sourcing solutions for

Q services^

Savings achieved in key markets

(Colorado Springs, Washington State,

San Antonio) through use of strategic

sourcing solutions for Q services

Bi-Annual


DHA MATO for Q services are awarded

in FY17 and workload migrates in FY18

Q1 FY19

3

Savings attributed to utilizing

existing strategic sourcing

solutions for R services

Savings achieved across Services' and

former TMA R services R services

portfolio categorized according to extent

of competition prior to contract award.

Bi-Annual


DHA MATO for R services are awarded

in FY17 and workload migrates in FY18

Q1 FY19

4

Savings attributed to "ordering

windows (e.g., IT hardware

purchases)

Savings achieved by specifying

timeframe in which orders can be placed

for certain goods or services

Bi-Annual

D service MATO to be awarded in FY16

will establish quarterly ordering windows

for IT hardware; workload will migrate in

FY17

Q1 FY18

5Savings achieved through

vendor base management

Savings achieved from strategically

managing vendor base to eliminate pass-

throughs and drive down overhead costs

Bi-Annual

D service MATO to be awarded in FY16

will be the first opportunity for managing

the vendor base to generate savings;

workload will migrate in FY17

Q1 FY18

Reporting data against targetsUnder development Developed, but no baseline Baseline and targets exist

*As outlined in CONOPS and Third Report to Congress. The five priority metrics presented here are under developed since IOC as they provide important early indicators of savings realized from Contracting shared services. Efficiencies will be baselined after the establishment of DHA Sourcing Strategies. Other metrics will be developed and tracked after IOC in a phased approach.^Q Services savings metric timeline revised based on resource challenges and Service equities that impacted Service-level strategic MATOs.


Contracting Shared ServiceRevised BCA Costs & Projected Savings

Opportunity FY14 FY15 FY16 FY17 FY18 FY19 FY20 Cumulative

Acquisition

Planning and

Program

Management

Develop or identify

strategic MATOs for the

DHA

Initiative 1: 0 0 0 0 2.93 5.98 21.36 30.27

Q Services

Initiative 2:0 0 0 0 9.13 18.62 66.49 94.24

R Services

Annual Savings 0 0 0 0 12.06 24.6 87.85 124.51

Annual Costs 0 -1.93 -1.96 -2.00 -2.03 -2.08 -2.12 -12.12

Annual Net Savings 0 -1.93 -1.96 -2.00 10.03 22.52 85.73 112.39

Execution,

Management,

and

Administration

Initiative 3:0 0 0 2.11 4.25 15.31 0 21.67

Establish "ordering windows"

Initiative 4:0 0 0 3.17 6.4 22.94 0 32.51

Strategically manage vendor base

Annual Savings 0 0 0 5.28 10.65 38.25 0 54.18

Annual Costs 0 0 0 0 0 0 0 0

Annual Net Savings 0 0 0 5.28 10.65 38.25 0 54.18

Enabler:

Legal Support

Initiative 5: Decouple Compensation

ceiling under Title 50 0.05 0 0 0 0 0 0.05

Annual Savings 0 0.05 0 0 0 0 0.05

Annual Costs 0 0 0 0 0 0 0 0

Annual Net Savings 0 0.05 0 0 0 0 0 0.05

Annual New Manpower Costs 0 -0.78 -0.79 -0.80 -0.82 -0.84 -0.85 -4.88

Total Annual Savings 0 0.05 0 5.28 22.71 62.85 87.85 178.74

Total Annual Costs 0 -1.93 -1.96 -2 -2.03 -2.08 -2.12 -12.12

Net Savings 0 -2.66 -2.75 2.48 19.86 59.93 84.88 161.74


0 -$2.66 -$2.75 $2.48 $19.86

$59.93

$84.88

-$1.43 -$1.51$10.92 $21.38

$79.54

-$50

$

$50

$100

Annual Projected Savings, FY14-20, Risk & Inflation Adjusted

Rebaseline Annual Savings ($M) Original BCA Annual Savings ($M)

0 -$2.66 -$5.41 -$2.93 $16.93

$76.86

$161.74

-$2.79 -$4.22 -$5.73 $5.19 $26.57$106.11

-$100

$

$100

$200

Cumulative Projected Savings, FY14-20, Risk & Inflation Adjusted

Rebaseline Cumulative Savings ($M) Original BCA Cumulative Savings ($M)


Research, Development and Acquisition Directorate

62

RADM Bruce A. Doll

Director, Research, Development & Acquisition

BLUF / Challenges / Wins

BLUF RDA is working towards Full Operating Capability (FOC)

On schedule to achieve FOC 1 Oct 2015

Challenges Finalized organizational structure

Predictability of funding

Wins Advanced Development (AD) Concept of Operations (CONOPs) completed

Initial Metrics Identified, baselines being collected

Strategic Plan drafted


Briefing Date: XX Feb 2015 6464“Medically Ready Force…Ready Medical Force”

Research and Development: Objectives Alignment

Strategy Map Objectives Alignment

Objectives Supported High Level Initiatives Supporting Initiatives

IP2: Improve Operational Medicine

• Combat Casualty Care Research • Military Operational Medicine Research

• Hemorrhage Control and Resuscitation Program• Combat Casualty Care Training Initiative• Traumatic Brain Injury (TBI) Diagnosis R&D• Forward Surgical Care Initiative• Enroute Care research • Suicide Prevention R&D• Family and Community Health R&D• Post Traumatic Stress Disorder (PTSD) prevention R&D

IP3: Enhance Emerging Medical Capabilities in a Joint Environment

• Advance Medical Modeling and Simulation • Collaborative Medical Modeling and Simulation R&D

IP4: Enhance Strategic Partnerships

• Enhance Research Related Strategic Partnerships

• NATO engagement• Armed Serviced Biomedical Evaluation and Management

Committee (ASBREM) Initiatives • National Research Action Plan• Joint DoD-VA Review and Analysis

OC3: Optimize DHA as a Support Organization • Research and Development FOC Initiatives

• Clinical Investigation Programs• Protections Program Structures • Clinical Registries

64


RDA Directorate Key Measures

AreaManagement

QuestionMeasure Current Status Notes on Current Status

Target Date

to Begin

Development

Expected

Completion

Date

Cost

Are we maximizing

the amount of

research for dollars

invested?

Direct research dollars for

total dollars spent. BCA reinvestment initiative underway

Initiation of improved cost activity

accounting. September

2014Ongoing

Schedule

Can we speed the

development and

transition of

research products?

Institutional Review

Board/Human Research

Protection approval time

for multi-site clinical

research trials.

Average time from

program solicitations to

award.

RDA Human Research Protections and

Clinical Investigations Program

Working Group underway .

Baselining Awards Process .

Technology Transfer Improvements

underway.

September

2014

Annual

Progress

Review

(October

each year)

Performance

Are we getting the

knowledge and

material products

we need from our

RDA investment?

Number of clinical trials

completed.

Number of products

making it to Milestone

Decisions.

Number of fielded

products (Clinical

Practice Guidelines,

commercial products,

etc.).

Advanced Development (AD) structure

being implemented,

Joint Program Committee tracking of

outcomes underway.

Armed Services Biomedical Research

Evaluation Management (ASBREM)

COI improving multi-agency research

efforts.

September

2014

Annual

Progress

Review

(October

each year)

Reporting data

against targetsUnder

development

Developed, but no

baseline

Baseline and

targets existBaseline exists,

but no target

65


RDA Business Process Rengineering

Current Status

Net Savings Achieved to Date: None

Status Summary: Implementation in FY 15

Next Steps Owner Status Suspense Revised Suspense

Capability & Capacity AnalysisRDA

DirectorateSept 2014 Nov 2014

Redirection of Extramural FundingRDA

DirectorateOct 2015 Feb 2015

Advanced Development ImprovementRDA

DirectorateOct 2015

Research Protections & Multi-Site Clinical TrialsRDA

DirectorateJune 2015

Risks and Issues

Need to monitor costs to realize projected cost reinvestments

Overall Status: Complete On Schedule At Risk of Missing Suspense Missed Original Suspense

66


Research, Development & AcquisitionProjected Reinvestment

Reinvestment InitiativesEstimated Reinvestment ($M)

FY14 FY15 FY16 FY17 FY18 FY19 Cumulative

Redirection of Extramural Funding

Annual Reinvestment 0 0 9.82 20.01 30.96 31.64 92.43

Annual Costs 0 0 0 0 0 0 0

Annual Net Reinvestment

0 0 9.82 20.01 30.96 31.64 92.43

67


Progress Update

Task Forces recommendations on: Centers of Excellence

Advanced Development (AD)

Clinical Infrastructure / Regulatory & Laboratories

AD CONOPs completed

Shared Service Working Group ongoing efforts

Initial Metrics Identified, baselines being collected

Strategic Plan drafted

68


Medical Education & Training

69

Brig Gen (Dr.) Robert I. Miller

Director, Education and Training

Education & Training (E&T)BLUF / Challenges / Wins

BLUF E&T is working towards Full Operating Capability (FOC) by 1 Oct 2015

Focus on quality E&T, but cost savings expected - Learning Management System (LMS) and Modeling & Simulation (M&S)

Challenges Limited DHHQ staff but increased partnering opportunities

Medical Education & Training Campus (METC) a work in progress

Wins Allignment of METC, Defense Medical Readiness Training Institute (DMRTI),

Joint Medical Executive Skills Institute (JMESI) under E&T Directorate

Single Learning Management System (Joint Knowledge Online)

METC bridge programs and future academic affiliation with Uniformed Service University (USU) - “Train for the Mission…Educate for a Lifetime”

70


$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00


Mo

de

ling

& S

imu

lati

on

Savi

ngs

($

M)

$(1.50)

$(1.00)

$(0.50)

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00


Lear

nin

g M

anag

em

en

t Sy

ste

ms

Savi

ngs

($

M)

Summary of LMS Savings* ($M)

Education & Training FY14 - 19Projected Savings & Implementation Costs

71


Net Savings (Annual)$(0.03) $(0.87) $1.06 $0.95 $0.85 $0.77

Net Savings (Cumulative)

$(0.03) $(0.90) $0.16 $1.11 $1.96 $2.72

FY14-19

Gross SavingsImplementation

CostNet Savings

Return on Investment**

$3.62M $0.90 $2.72 ~3:1

*Subset of HIT sWG Portfolio Rationalization BCA; E&T will not formally track these savings

**ROI calculated as [Net Savings/Implementation Costs] : 1

Summary of M&S Net Savings ($M)

FY14-19

Gross SavingsImplementation

CostNet Savings

Return on Investment**

$5.07M $0*** $5.07M N/A**


Net Savings (Annual)$0.00 $0.00 $0.00 $1.05 $1.55 $2.47

Net Savings (Cumulative)

$0.00 $0.00 $0.00 $1.05 $2.60 $5.07

The projected potential savings are estimated to be $7.79M from FY14 to FY19.


Secretary of Defense

USD (P&R)ASD (HA)

Defense Health Agency Director

Education and Training Director

Policy Development

Policy Execution

Academic Review and

Policy Oversight

• Academic Metrics • Policy and Compliance• Training Agreement

Management• Strategic Planning• Learning Modalities

• eLearning (Learning Management System)

• Modeling & Simulation • Regulatory

Professional Development,

Sustainment and

Program Management

• Graduate Med/Den Education***

• MHS Leader Development (JMESI)

• Operational Training (DMRTI)• Leadership Development

Continuum (initial-Sustainment)***

• Officer/Enlisted/Civilian Professional Development***

• Program Standardization/ Reciprocity***

Administrative

Support

• Conference/CE/Certification approval and attendee package processing

• Tuition Payments/Student support

• CE Credit Granting• JGMESB Coordination• Centralized credentialing for

LIPOther functions as determined

by DHA E&T analysis

Authority, Direction and Control

Coordination

METCUSU*

* Consortium Partners** Consortium Partners and E&T Delivery platforms

*** E&T Directorate in coordination role

“Military Medical Education Consortium”

Coordinated affiliations to facilitate the delivery of quality

instruction

Healthcare Inter-service Training Office (HC-ITO) ***- Facilitate training review process

NMETC ** AMEDD C&S **AETC/SGU **

DMRTI

JMESICivilian

Partners

CCAF*

Education & TrainingOrganizational Chart at FOC

72


Education & Training Shared ServiceDeliverables

73

Deliverable MeasureReporting

FrequencyNotes on Current Status Status

Expected

Completion

Date

#1Align Medical Education and

Training Campus to DHA E&TN/A Action Complete. METC funds transfer to DHA in FY17. FY15

#2Align Joint Medical Executive

Skills Institute to DHA E&TN/A Action Complete. JMESI funds transfer to DHA in FY17. FY15

#3Align Defense Medical

Readiness Institute to DHA E&TN/A Action Complete. DMRTI funds transfer to DHA in FY17. FY15

#4One - Stop Learning

Management System

Semi-

annually

Migrate 11 of 11 Legacy LMSs to JKO by FY18

- JMESI migration complete Dec 14

- MHS Learn migration / EDC Jun 15

FY18

#5MHS Leadership

TrainingQuarterly

Determine standardized MHS leadership curricula development

- Draft leadership curricula complete/Services approved

(Joint Medical Executive Skills Institute / Dr. Durica)

FY17

#6 Award DegreesSemi-

annually

Develop METC/USUHS Academic Affiliation

- Meetings conducted w/key stakeholders, SEAs & DoD

decision authorities; momentum steady

- Unified Legislative Budget request in coordination

FY17

Complete On Schedule Not On Schedule


Education &Training Shared ServiceDeliverables

74

Deliverable MeasureReporting

FrequencyNotes on Current Status Status

Expected

Completion

Date

#7 Global Course Catalog Quarterly

Complete inventory of all E&T products across the services to

develop baseline

- MHS Global Catalog 40% complete / EDC Oct 15

FY16

#8METC Strategic

Partnerships

Semi-

annually

Goal is to develop bridge programs with civilian schools that

recognize METC training for college creditFY16

#9Military Medical Education

Consortium

Semi-

annually

Goal is to identify potential partners, develop, and establish

partnershipsFY16

#10 JGMESB Support Quarterly

- Way forward is to formally request that Services nominate

member(s) for JGMESB WG to develop POAM

- Overarching E&T Work Group charter is under development

FY18

#11Combat Casualty

Care

Semi-

annually

- Way forward is to conduct assessment of critical skills training

and identify training gaps, then develop plan of action

- Key stakeholders and SMEs have initiated & conducted meetings

FY18

#12Modeling &

SimulationQuarterly

- Align modeling & simulation functions across the MHS

- Standardize medical training and;

- Institutionalize shared Service skill sets for the enterprise to

support DHA portfolio

FY18

Complete On Schedule Not On Schedule


Public Health Division

Col Carol A. Fisher

Chief, Public Health Division

75

Public Health Division (PHD)BLUF / Challenges / Wins

BLUF IOC: 30 Sep 2014 with 3 of 4 Branches

Structured process in place to analyze 8 remaining product lines (PLs)

Challenges Transition of Armed Forces Health Surveillance Center to PHD

Re-baseline of projected cost savings

Availability of Service Subject Matter Experts for remaining PL analyses

Wins Ebola response effort

Periodic Health Assessment Optimization

Draft Strategic Plan

76

Briefing Date: 10 Mar 2015


Progress Update


SuspenseCompleted

Tra

nsit

ion

People Transfer to DHA (awaiting AFHSC) 30 Sep 14 12 Jul 15

Resources Transfer to DHA 1 Oct 15

Governance Update with Services – Charter, CONOPS 30 Sep 15

Public Health Division Manpower Assessment 15 Jun 15

Imp

lem

en

t

PL

1

Dep

loym

en

t

Healt

h

Re-baseline projected savings and efficiencies 30 Sep 15

WG charter for Medical Readiness Systems [i.e., MEDPROS,

MRRS, ASIMS] Portfolio Rationalization 1 May 15

PHA Optimization Effort – DoDI out for internal coord 16 Mar 15

Imp

lem

en

t

PL

2

Healt

h

Su

rveilla

nce

Awaiting transfer of AFHSC to Public Health Division 30 Sep 14 12 Jul 15

Imp

lem

en

t

PL

3

Imm

un

izati

o

n H

ealt

hc

are Assessment of the six Immunization Regional Offices for

efficiency opportunities – awaiting manpower study assessment30 Jun 15

Imp

lem

en

t

PL

4

Vete

rin

ary

Serv

ices Awaiting manpower study assessment

30 Jun 15

77Complete On Schedule At Risk of Missing Suspense

“Medically Ready Force...Ready Medical Force”7777



FY 14-19 BCA Costs & Projected Savings

BCA Category FY14 FY15 FY16 FY17 FY18 FY19 Total Primary Drivers of Implementation Costs

Deployment Health: Eliminate ANAM assessments; streamline PHA, and deployment health assessments; and change in Optimize Health Status

Savings ($M) $0.00 $8.68 $51.07 $77.81 $81.11 $84.68 $303.35 - Cost savings questionable due to NDAA 2015 annual person to person mental health assessment

- MBOG endorsed Deployment Health savings re-baseline effort; EDC: 30 Sept 2015

Cost ($M) $8.19 $6.84 $2.35 $2.07 $2.23 $2.05 $23.73

Net Savings ($M) ($8.19) $1.84 $48.72 $75.74 $78.88 $82.63 $279.62

Health Surveillance: Eliminate redundant surveillance databases/activities and derive economies of scale from process improvements

Savings ($M) $0.11 $2.02 $6.74 $9.48 $9.68 $9.90 $37.94 - Health Surveillance (AFHSC) delayed in transfer to DHA

- Implementation costs for process improvements

- Identification/elimination of redundant systems

Cost ($M) $4.30 $4.80 $8.20 $13.40 $3.10 $3.00 $36.80

Net Savings ($M) ($4.19) ($2.78) ($1.46) ($3.92) $6.58 $6.90 $1.14

$(0.9)

$47.3 $71.8 $85.5 $89.5

$(12.4) $(13.3)$33.9

$105.8 $191.2

$280.8

$(100)

$-

$100

$200

$300


Do

llars

(in

Mill

ion

s)Risk- and Inflation-Adjusted Project Savings, FY14-19

Annual Net Savings

Cumulative Net Savings

78 “Medically Ready Force...Ready Medical Force”78



Product Lines: Current & Future

Initial public health product lines (per CONOPs) Status

- Deployment Health Integrated at IOC; re-baselining cost savings

- Immunization Healthcare Integrated at IOC

- Veterinary Services Integrated at IOC

- Health Surveillance Pending transfer to DHA (EDC: July 2015)

8 additional product lines (per CONOPs) to be analyzed for recommended PHD FOC structure

Status

- Occupational & Environmental Health (Includes Occupational Health, Hearing Health, Industrial Hygiene, Environmental Health)

Initiate Analysis (Hearing Health only) March 2015

- Clinical Preventive Medicine Analysis not initiated

- Health Promotion Analysis not initiated

- Public Health Laboratories Analysis in-progress

- Radiation Health Analysis not initiated

- Food/Water Safety & Sanitation Initiate Analysis March 2015

- Entomology Analysis not initiated

- Health Risk Communication & Public Health Emergency Response Analysis not initiated

“Medically Ready Force...Ready Medical Force”79


Enhanced Multi-Service Markets (eMSM)

80


Multi-Service Markets:2 or more Services, large beneficiary population,

45% direct care dollars, large GME & readiness platforms

The Eight Largest Markets (and Service/Department Leads)

= eMSM

= Single Service

National Capital Region (DHA)

Tidewater (Navy)

Ft. Bragg (Army)

San Antonio, Texas (rotate Air Force/Army)

Oahu, Hawaii (Army)

San Diego (Navy)

Puget Sound, Washington (Army)

Colorado Springs, Colorado (rotate Air Force/Army)

81


Multi-Service Markets include Colorado Springs, Hawaii, the National

Capital Region, Puget Sound, San Antonio, and Tidewater (with San

Diego and Ft Bragg Pope as large market participants)

2 or more Services; large beneficiary population; almost 50% of our

direct care spending; and largest readiness / training platforms

The Plans focused on becoming an Integrated Health Delivery System,

and identified opportunities to increase enrollment at military clinics,

increase provider productivity, and reduce Private-Sector costs

MHS leadership reviews eMSM performance quarterly to enhanced

accountability. If performance is below target, Service leads work with

eMSMs to develop remediation plans

Enhanced Multi-Service Markets (eMSM) Overview


pwcPre-Decisional Deliberative Matter -- For Official Use Only Within DoD

Executive SummaryNCR eMSM

FY15 FY16 FY17 FY18 FY19 FY20 FY16-20 Total

Net Estimated Savings ($M)

Savings $71.7M $109.0M $126.9M $137.9M $138.0M $138.0M $649.9M

Costs $18.6M $28.3M $32.9M $35.8M $35.8M $35.8M $168.6M

Net $53.1M $80.7M $94.0M $102.1M $102.2M 102.2M $481.3M

Productivity

Productivity Target Targeted Annual Productivity (PA wRVUs) 5-Yr Change

261K 1.57M 1.73M 1.93M 2.03M 2.08M 2.08M 343K

Total Enrollment

Total Enrollment Target Targeted Total Annual Enrollment 5-Yr Change

Prime: 277.0K 219.0K 255.8K 267.4K 277.0K 277.0K 277.0K 21.2K

Plus: 23.0K 22.0K 22.2K 22.6K 23.0K 23.0K 23.0K 0.8K

Total 300.0K 241.0K 278.0K 290.0K 300.0K 300.0K 300.0K 22.0K

Recapture

Recapture Target Annual Recapture ($M) FY16-20 Total

$71.7M $109M $126.9M $138M $138M $138M $649.9M

Initiative

Impact Net Savings

Potential

($M)

Implementation

Costs

($M)

Total

Productivity

Change

Total

Enrollment

Change

Total

Recapture

($M)Readiness Health

Health

Care Cost Access Quality Safety

High Reliability Culture of Quality

and Patient PartnershipCAPT Vedral-Baron

FBCH • • • • • • •Quality and safety improvements have direct impact on cost (e.g., cost avoidance

of repeat surgeries, complications, litigation, etc.) not reflected in this model

Referral Management, Template

Management, and Appointing (RM)Col Cantilina

779th MDG • • • • • • • $191.9 $13.2 58.6K $205.1

Operating Room (OR) OptimizationBG Clark

WRNMMC • • • • • • $219.2 $93.9 88.0K $313.1

Patient Centered Medical Home

(PCMH) 2.0CAPT Smith

NBHC Quantico • • • • • $70.2 $61.5 196.7K 21.9K $131.7

Secure MessagingLt Col Hanson

579th MDG • • •Secure messaging and other tools (e.g., Nurse Advice Line) support the PCMH

Initiative and impact cost through avoiding ED/UCC visits.

Total $481.3 $168.6 343.3K 21.9K $649.9

Capability Overview

# MTFs

# ORs # Total Beds

Skill Type 1 & 2

Providers

Total DHP

Direct Care

Funding*Physical Staffed Physical Staffed

19 38 35 442 388 1,335 $1.3B

* Estimated, includes MILPERS

FY15 Population

Eligible Population MTF-Enrolled / Empaneled MCSC-Enrolled Prime

All 455K Prime 219K 34K

Medicare Eligible 78K Plus 22K Johns Hopkins (FHP)

Total 241K 35K

Walter Reed National Military Medical Center

• DiLorenzo TRICARE Health Clinic

• Branch Medical Clinic Carderock

• National Intrepid Center of Excellence

Fort Belvoir Community Hospital

• Fairfax Health Center

• Dumfries Health Center

Naval Health Clinic Quantico

• Naval Branch Health Clinic Washington Navy Yard

• Branch Medical Clinic OCS Brown Field

• Naval Branch Health Clinic The Basic School

Kimbrough Ambulatory Care Center

• McNair Army Health Clinic

• Andrew Rader Army Health Clinic

Naval Health Clinic Annapolis

• Naval Branch Health Clinic

Bancroft Hall

779th Med Group Joint Base Andrews

579th Med Group Joint Base Anacostia-Bolling

Branch Medical Clinic Naval Research Lab Washington

Naval Branch Health Clinic Joint Base Andrews

83


NCR Business Plan Initiatives Summary

84

Initiative Key Focus Areas Key Successes

High ReliabilityCulture of Quality and Patient

Partnership

CAPT Vedral-Baron (FBCH)

• TeamSTEPPS• Patient Centered Caring Communication Initiative (PCCCI) Provider

Training• Expand the Partnership for Patients (PfP) to Outpatient Facilities• Establish market-wide HEDIS monitoring program• Inaugural Quality Summit, April 2015

• Reached the 90th percentile on Breast Cancer Screening as a market.• Over 45% of the eMSM has entered sustainment mode for TeamSTEPPS• Completed development of all evidenced-based bundles for Partnership for

Patients

Referral Management, Template Management, and

Appointing (RM)

COL Cantilina(779th)

• Governance by Product Line• Template Management & Booking• Consolidate/map ancillary procedure codes and standardize

review/prioritization process• Establish capability for booking patient follow-up visit at checkout

• 50% reduction in medical Services deferrals to the network for capacity from November 2013 to November 2014.

• Building on the Orthopedics successes with outbound proactive booking, the NCR eMSM is capitalizing on the standardization of the product line templates and processes by developing a specialized team of call center agents focused on all Orthopedic appointment needs – both outbound and inbound.

Operating Room (OR) Optimization

BG Clark(WRNMMC)

• Reorganize Surgical Management across the Market• Standardize templates and appointment types across eMSM• Credential surgeons at multiple MTFs• NCR market approach to meet critical regional deficiencies in Physical

Therapy

• 26% decrease in private sector Orthopedic Surgeon encounters and 36%decrease in costs for market enrollees from FY13 to FY14

• 7% increase in direct care Orthopedic Surgical cases over the same timeframe

Patient-Centered Medical Home (PCMH) 2.0

CAPT Smith(Quantico)

• Access to Primary Care• Market-wide PCMH maturity• Timely and relevant data• ED/UCC usage

• Expanding its primary care footprint at two locations, Fairfax and Dumfries, both near beneficiary population centers.

• Realigning of the Fort Belvoir Family Practice Residency Program to maximize access to primary care

Enrollment

LTC Wienberg(Rader/McNair)

• The Enrollment team is assessing where and how to enroll new eligible beneficiaries, and determine the type and quantity of eligible beneficiaries each MTF can take on while still providing quality care.

• The market will increase its enrollment capacity by 10,000 enrollees by the end of FY15

• FY13-14 NCR enrolled over 6,000 patients increasing total enrollment from 236,000 to 242,000.

Secure Messaging

Lt Col Hanson(579th)

• Patient Registration• Provider Registration and Active Utilization• Response time• Training• Policy change

• Nearly eliminated endocrinology leakage to the network since implementing Provider-to-Provider secure messaging at WRNMMC since March 2014.

• Patient adoption at 589th is increasing and correlated with a drop in urgent care usage.

The DHA Supports the Military Services

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The DHA reports to the ASD(HA) and provides support to the three Military Services.

Defense Health Agency: Global Support

TRO West TRO South

METC

Health IT

DHA - Aurora

TRO North

Defense Health Agency

TRICARE Pacific

TRICARE Europe:

87

MMSO Great Lakes

defense health agency update - amopsamops.org/.../uploads/2015/04/defense-health-agency... ·...

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