2010 UBO/UBU Conference

Health Budgets & Financial Policy

1

UBO Keynote Presentation

Speaker: Rachel Foster

Date: 25 March 2010Time: 0805 – 0845

2010 UBO/UBU Conference

Health Budgets & Financial Policy

Defense Health Program Overview

2010 UBO/UBU ConferenceTurning Knowledge Into Action

9.6 million beneficiaries– 3.5 million TRICARE Prime

enrollees (direct care system)– 1.5 million TRICARE Prime

enrollees (contractor networks) – Remainder

• TRICARE Standard/Extra• TRICARE for Life• TRICARE Plus• TRICARE Reserve Select

Military Treatment Facilities (MTFs)– 59 Hospitals & Medical Centers– 364 Health Clinics

Network providers – 347,673 individual providers

Military Health System: Who We Are

3

2010 UBO/UBU ConferenceTurning Knowledge Into Action Priorities & Challenges FY 2011

Accessible World Class Patient Care

Increased Active Duty population over authorized levels

Cumulative effect of war-related workload

Minimizing effect of Medical Deployments

Controlling Healthcare Costs

Increased intensity and number of visits per user

Increased users

Leveraging Investment in Facilities to establish the Direct Care System as System of Choice

DHP Challenges Traumatic Brain Injury and

Psychological Health

Wounded Warrior Care and Transition Support

World Class Healthcare Facilities

Medical MILCON

Facility Sustainment, Restoration and Modernization

BRAC Implementation

Electronic Health Record

Quadruple Aim – Establishing the Direct Care System as System of choice

DoD / Congressional Priorities

4

2010 UBO/UBU ConferenceTurning Knowledge Into Action

0

10

20

30

40

50

60

70

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Explicit Benefit Changes to 65+Explicit Benefit Changes to <65New Users <65Volume/Intensity/Cost Share Creep, etc.Price InflationFY2000 Unified Medical Program

Rising Costs for the MHS

+14.9 +7.6 +4.5 +2.6

+14.3

($B)

48%: New Benefits

29%: Per Visit Cost Growth

10%: New Users

13%: Utilization

• Source: Congressional Budget Office

To limit its impact on the DoD budget, the MHS must find innovative ways to slow the cost curve

5

MHS Healthcare CostsThe DoD budget for healthcare is projected to grow $44 billion between FY2000 and FY2013

Root Causes of Cost Growth

Recent drivers of cost inflation are largely outside of the control of the MHS and include benefits added by Congress, new users, and purchased healthcare inflation

2010 UBO/UBU ConferenceTurning Knowledge Into Action

Readiness Pre- and Post-deployment Family Health Behavioral Health Professional Competency/Currency

Population Health Healthy service members, families, and retirees Quality health care outcomes

A Positive Patient Experience Patient and Family centered Care, Access, Satisfaction

Cost Responsibly Managed

Readiness

Our Ultimate Goal: The Quadruple Aim

7

2010 UBO/UBU ConferenceTurning Knowledge Into Action

Text

Planning

Execution

Individual Medical Readiness Psychological Health Engaging Patients and Healthy

Behaviors Evidence-based Care Wounded Warrior Care 24/7 Access to Your Team Personal Relationship with Your

Doctor Value-based Incentives and

Reimbursements Functional EHR Using Research to Improve

Performance Fully Capable MHS Workforce

Planning Programming

Budgeting

Execution

Aligning Strategy and Budget

8

Strategic Imperatives Financial Processes

2010 UBO/UBU ConferenceTurning Knowledge Into Action

9

Financial Processes

PlanningProgramming

Budgeting

Execution

PlanningProgramming

Budgeting

Execution

PlanningProgramming

Budgeting

Execution

Plan/ProgramOld: “Cut up the Pie”

New: Execution baseline

plus requirements MHS Senior Leaders

decide

BudgetingOld: Lack of

transparency

New: Transparent, working

towards financial visibility

ExecutionOld: Bills divided among

Services

New: Review execution and

source emergent requirements with any available funds

2010 UBO/UBU ConferenceTurning Knowledge Into Action

10

New Financial Processes

Shared Fate

Shared Vision

“Shared Vision” “Shared Fate”

Financial processes support strategic direction

Better understanding and control over program baseline

Intended Results

2010 UBO/UBU Conference

Health Budgets & Financial Policy

Third Party Billing Way Ahead

2010 UBO/UBU ConferenceTurning Knowledge Into Action Problem Statement

The Services are not able to fulfill the Third Party Collection Program (TPCP) mandate to the best of their ability

10 USC 1095_____________________________________________________________________________________________________________________________________________________________________________________________

“…the United States shall have the right to collect from a third-party payer reasonable charges for health care services incurred by the United States on behalf of such person through a facility of the uniformed services…”

2010 UBO/UBU ConferenceTurning Knowledge Into Action Background

CFO disapproved DBT certification in June 2007 for an Enterprise-wide Charge Master Based Billing (CMBB) System

Proposed CMBB System didn’t meet full requirements (e.g. electronic Pharmacy billing was not included)

Costs for full functionality unknown, along with return on investment (ROI)

One Service did not require billing function– Raised question whether Enterprise system needed

At the time, known that each Service building separate ERPs– Unclear how CMBB would interface with ERPs

2010 UBO/UBU ConferenceTurning Knowledge Into Action Way Ahead

HA/TMA will provide data that Services need to bill Services decide how they are going to bill

– Contract out selected functions within the revenue cycle

– Purchase own billing product, connected to own ERP– Take ownership of TPOCS and maintain it (I

thought Rachel wanted this statement removed)

2010 UBO/UBU ConferenceTurning Knowledge Into Action Enterprise Activity

What constitutes an Enterprise Activity?– Need to share information across Enterprise– Information not available elsewhere

Required Enterprise Activity Example: AHLTA– Information shared across for continuity of care– Information shared up and down for reporting and surveillance

Optional Enterprise Activity Example: Billing and Collections– No need to share individual billing transactions among Services– No need to share individual billing transactions with TMA

2010 UBO/UBU ConferenceTurning Knowledge Into Action

16

Proposed Schedule of Events

June 2007CMBBCanceled

March 2009HA/TMA identifydata and method tomake it available forthe Services to bill May 2009

BPMB recommendwhat/if changes tobe made to TPOCS

July 2011CBER Phase 1

TBD (NLT Oct 2013)Sunset TPOCS

December 2009CONOPSReleased