Active service military need health care. How do they get it?
For the 9.5 million active military beneficiaries and their families, the Military Health Service (MHS) provides the health care they need. Some of the medical care is provided at military facilities and some care is purchased through non-military (i.e., civilian) providers. A paper by Eaglehouse et al. (2019) provides a brief overview of the MHS.
The DoD provides insurance coverage to beneficiaries through TRICARE. The primary TRICARE benefit plan options include Prime, Select (formerly called Extra and Standard), and TRICARE for Life. TRICARE for Life serves as a secondary payer to Medicare for people who are eligible for and enrolled in Medicare. Beneficiaries with TRICARE pay nothing out of pocket when they receive care at military treatment facilities. Beneficiaries may have copayments or point-of-service fees due at the time of service when they receive purchased care, depending on
their benefit plan, the provider’s network status, and whether out-of-pocket maximums have been reached. Payments for specialty treatment (for example, for cancer) in purchased care are handled in a way similar to that in which a health maintenance organization (in the case of Prime) or preferred provider organization (in the case of Select) in the private sector handles them. Although TRICARE plans are similar in structure to these private managed care models, MHS beneficiaries generally have lower out-of-pocket expenses than do people who participate in US public or private plans.
Military treatment facilities include 51 hospitals, 381 medical clinics, and 247 dental offices. Of these 13 hospitals and 52 medical clinics are located outside the U.S. Note that nearly 60% of TRICARE beneficiaries are retirees or their dependents. The TRICARE budget was $53.6 billion in 2019.
The Eaglehouse study also examines whether getting care from military compared to civilian facilities affects the cost of care. Conventional wisdom would hold that military facilities may be less expensive because government facilities may have lower cost, pay providers less, have lower quality, or have less overhead costs; civilian facilities may have lower cost if they are more efficient have to deal with less government bureaucracy.
In fact, it turns out that care provided at military facilities (direct care) is less expensive than care at civilian facilities (purchased care).
For colon cancer, patients who used direct care had the lowest median cost ($41,568), followed
by those who used purchased care ($125,647)…For breast cancer, patients who used
direct care had the lowest median treatment cost ($37,889), while those who used purchased care ($57,054)…had higher median cost…For prostate cancer, patients who used purchased care had the lowest median treatment cost ($13,104), followed by those who used direct care ($17,220)…After accounting for patient, tumor, and treatment characteristics, we found the independent contribution of care source to total variation in cost to be 8 percent, 12 percent, and 2 percent for colon, breast, and prostate cancer treatment, respectively.
A key question not answered in the study is how quality of care varies across the different facility types. Future research is needed to determine whether the additional spending was worth the cost.
- Eaglehouse YL, Aljehani M, Georg MW, Castellanos O, Lee JS, Seabury SA, Shriver CD, Zhu K. Contribution Of Care Source To Cancer Treatment Cost Variation In The US Military Health System. Health Affairs. 2019 Aug 1;38(8):1335-42.