In 2012, the Department of Defense (DoD) spent $52 billion on health care for service members, retirees, and their families. The department offers health care to nearly 10 million people through its TRICARE program, an integrated system of military health care providers and regional networks of civilian providers. Established in 1993, TRICARE now consists of three major plans: TRICARE Prime, TRICARE Standard, and TRICARE Extra. The cost of providing this care has increased rapidly as a share of the defense budget over the past decade, outpacing growth in the economy, growth in per capita health care spending in the United States, and growth in funding for DoD's base budget. This book focuses on the approaches that can be taken to reduce federal spending on military care, and continues to provide information on management practices available to help achieve efficiencies within the military health system.

The health care benefits provided to military service members, retirees, and their families are more generous than those generally provided through private or employment-based health insurance. Between 2000 and 2012, the cost of providing military health care increased by 130 percent (after adjusting for inflation). This report examines some options for constraining those costs. The largest savings would come from increasing cost sharing for military retirees.

The cost of providing that care has increased rapidly as a share of the defense budget over the past decade, outpacing growth in the economy, growth in per capita health care spending in the United States, and growth in funding for DoD's base budget (which finances the department's routine activities but has excluded funding for operations in Iraq and Afghanistan). Between 2000 and 2012, funding for military health care increased by 130 percent, over and above the effects of overall inflation in the economy. In 2000, funding for health care accounted for about 6 percent of DoD's base budget; by 2012, that share had reached nearly 10 percent. By 2028, health care would claim 11 percent of the cost of implementing DoD's plans, the Congressional Budget Office (CBO) estimates (see Summary Figure 1). The Budget Control Act of 2011 (as modified by subsequent legislation) capped funding for national defense between 2014 and 2021 at about 10 percent below CBO's projection of the cost of DoD's plans as of November 2013, using DoD's estimates of prices.1 The share of health care costs in future budgets will depend on how DoD adjusts its plans to comply with those caps. For example, if the growth in health care costs is unconstrained by new policies and cuts are made in funding for other defense activities (such as the development and procurement of weapon systems), then health care costs could account for an even larger percentage of the department's future spending.

Between 2000 and 2012, the cost of providing health care to service members, retirees, and their families increased by 130 percent (after adjusting for inflation). What approaches might curtail the growth in those costs?

The health care benefits provided to military service members, retirees, and their families are more generous than those generally provided through private or employment-based health insurance. Between 2000 and 2012, the cost of providing military health care increased by 130 percent (after adjusting for inflation). This report examines some options for constraining those costs. The largest savings would come from increasing cost sharing for military retirees.

" DOD's health care costs have risen significantly, from $19 billion in fiscal year 2001 to $48.7 billion in its fiscal year 2013 budget request, and are projected to increase to $92 billion by 2030. GAO reviewed DOD's efforts to slow its rising health care costs by changing selected clinical, business, and management practices. Specifically, GAO determined the extent to which DOD has (1) identified initiatives to reduce health care costs and applied results-oriented management practices in developing plans for implementing and monitoring them and (2) implemented its seven medical governance initiatives approved in 2006 and employed key management practices. For this review, GAO analyzed policies, memorandums, directives, and cost documentation, and interviewed officials from the Office of the Secretary of Defense, from the three services, and at each of the sites where the governance initiatives were under way. "

Drawing on the work of the Roundtable on Evidence-Based Medicine, the 2007 IOM Annual Meeting assessed some of the rapidly occurring changes in health care related to new diagnostic and treatment tools, emerging genetic insights, the developments in information technology, and healthcare costs, and discussed the need for a stronger focus on evidence to ensure that the promise of scientific discovery and technological innovation is efficiently captured to provide the right care for the right patient at the right time. As new discoveries continue to expand the universe of medical interventions, treatments, and methods of care, the need for a more systematic approach to evidence development and application becomes increasingly critical. Without better information about the effectiveness of different treatment options, the resulting uncertainty can lead to the delivery of services that may be unnecessary, unproven, or even harmful. Improving the evidence-base for medicine holds great potential to increase the quality and efficiency of medical care. The Annual Meeting, held on October 8, 2007, brought together many of the nation's leading authorities on various aspects of the issues - both challenges and opportunities - to present their perspectives and engage in discussion with the IOM membership.