1. Translating Strategy into Action Tri-Service Business Planning Process

2. Agenda Where We’ve Been Where We Are Where We’re Going

3. Business Planning Timeline Jul 04 SGs Directed Development of Tri-Service Tool Jul 04 SGs Directed Development of Tri-Service Tool Oct 04-Jan 05 Developed Tool; Published Service Guidance Oct 04-Jan 05 Developed Tool; Published Service Guidance Jan-Apr 05 Unveiled Tool at TRICARE Conf; Trained Tool Jan-Apr 05 Unveiled Tool at TRICARE Conf; Trained Tool Aug-Sep 04 Integrated Best of Class into Tri- Service Tool Aug-Sep 04 Integrated Best of Class into Tri- Service Tool Mar-Jun 05 MTFs & MSMs Developed FY06-08 Plans Mar-Jun 05 MTFs & MSMs Developed FY06-08 Plans 8 Jul 05 Convened Tri-Service MSM Board 8 Jul 05 Convened Tri-Service MSM Board 16 Jul 05 MTF and MSM Plans Due to OSD(HA) 16 Jul 05 MTF and MSM Plans Due to OSD(HA) 1 Aug 05 TRO Plans Due to OSD(HA) 1 Aug 05 TRO Plans Due to OSD(HA) Mid Sep 05 HA & Services Lessons Learned Conference Mid Sep 05 HA & Services Lessons Learned Conference Aug 05 Start FY07-09 Business Planning Cycle Aug 05 Start FY07-09 Business Planning Cycle

4. Tri-Service Approach Maintained Service uniqueness Adopted standard business planning process Integration of existing Service business planning tools using “best of class” –Army Production Model –Navy Process Improvement/Initiatives –Air Force IT Solution

5. Business Planning Process Case Study – Labor costs represents approximately 65% of a Medical Treatment Facility’s (MTF’s) costs. Labor Costs Impact Medical Cost per Enrollee Equivalent Life Cost Per Relative Weighted Product Cost Per Relative Value Unit (RVUs) RVUs Per Primary Care Full-Time Equivalent (FTE) Improvement in Labor Reporting will also facilitate improvement in MTF Efficiencies

6. Tri-Service Approach: Ensure Strategic Alignment

7. Tri-Service Tool Drives Strategic Alignment

8. Business Planning Model Performance Improvement Unique Users Total Gov’t Paid Inpatient Outpatient Price Per RWP Price Per RVU Cost Per RWP Cost Per RVU MCSC Enrollment Enrollment Market Share Inpatient Outpatient Total Cost Inpatient Outpatient Unique Users Market Share Inpatient Outpatient Space Available

9. SECTION 7 Assess Financial Impact SECTION 5 Coordinate Healthcare Delivery Plan SECTION 8 Submit Plan/ OSD(HA) Template SECTION 9 SECTION 1 Analyze Market SECTION 6 Develop Action Plans SECTION 3 Evaluate Performance SECTION 2 Understand Demand MTF Business Plans Planning Process SECTION 4 Determine Capacity Monitor Plan Performance

10. MHS BSC Instrument Panel 10 27 30 31 18 21 16 25 26 19 20 5 22 3 4 11 Back up Slide 32 33 Notes ADR- Annual Defense Review (SECDEF Instrument Panel) metrics are color coded to ADR Goal standards Baseline is prior year for all measures except Plan Execution, Claims Processing and Learning and Growth which are prior month Positive Direction Essentially Unchanged Negative Direction 34 Meeting ADR Goal Improvement but not meeting ADR Goal Not meeting ADR Goal, not improving No ADR Goal 9 37 35 36 FY05 Jul Update

11. MHS BSC Learning and Growth MEPRS Completeness: % Facilities Reporting MEPRS On Time Source: EASIV Based on data extracted 19 Jul 2005, for May submission facilities have until 15 Jul to be on time.

12. MHS BSC Financial Medical Cost per Prime Enrollee Note: Enrollees are not age/sex adjusted. Adjusted figures are displayed as Medical Cost per Prime Equivalent Life PMPM % ChangeMEPRS DQSIDR DQSADR DQ The Goal is to stay below a 11% increase. 11% is the projected increase for Private Sector Health Care premium increases PMPM Eq Lv

13. MHS BSC Financial Medical Cost per Prime Equivalent Life Note: Enrollees are adjusted for age/gender Eq Lv % ChangeMEPRS DQSIDR DQSADR DQ The Goal is to stay below a 11% increase. 11% is the projected increase for Private Sector Health Care premium increases Per Enrollee

14. MHS BSC Efficiency Cost per RWP (Proj) MEPRS DQSIDR DQ To compensate for missing Inpatient records, total RWPs were projected to completion using WWR dispositions counts Goal is 4.9% increase to match PPS increase, i.e. projected increase in TMAC

15. MHS BSC Efficiency Cost per APG MEPRS DQSADR DQ Goal is 1.5% increase to match PPS increase, i.e. projected increase in TMAC

16. MHS BSC Efficiency RVUs per Primary Care Provider per Day MEPRS DQSADR DQ This metric is one of the ADR metrics. In the ADR, performance is defined using Red/Yellow/Green. Visit/Prov RVU/FTE Detail Due to missing MEPRS data the following MTFs were excluded for FY05: Army: 0047- Eisenhower AMC – Ft. Gordon; 0049- Winn ACH- Ft. Stewart; 0109- Brooke Amc-Ft. Sam Houston; 0123- Dewitt Ach-Ft. Belvoir. Air Force: 0006- 3rd Med Grp-Elmendorf; 0033- 10th Med Group-USAF Academy; 0050-347th Med Grp-Moody; 0051- 78th Med Grp-Robins; 0066-89th Med Grp-Andrews; 0079-99th Med Grp- O‘Callaghan Hosp; 0093- 319th Med Grp-Grand Forks; 0120- 1st Med Grp-Langley; 0203-354th Med Grp-Eielson; and 305th Med Grp- McGuire. Because of the missing data, current performance is likely overstated.

17. Labor in the TRI-Service Business Planning Tool Facility capacity is defined through available provider FTEs –Product Lines –Deployment –Provider Availability Capacity is compared to expected demand

18. LIVE DEMONSTRATION

26. Actions Plans in the NCA

27. Example at Andrews AFB Summary POC Evidence Statement Solution Impact

28. Comparisons

29. Benefits of the Process Harvest Best Business PracticesHarvest Best Business Practices Identifying Data WeaknessesIdentifying Data Weaknesses P-D-C-AP-D-C-A Identifying Training NeedsIdentifying Training Needs Linking the Business Plans to the POM/MPGLinking the Business Plans to the POM/MPG Identifying System NeedsIdentifying System Needs Internal ComparisonsInternal Comparisons Leads to Monitoring at an Actionable LevelLeads to Monitoring at an Actionable Level

30. Service Checks Facilities Analysis FACILITIES Business Plan does not indicate whether space is sufficient to accommodate a 20-FTE provider increase for the following MTF: Irwin ACH - GPRMC (Ft. Riley) Business Plan does not indicate whether space is sufficient to accommodate a 10.3-FTE provider increase for the following MTF: Reynolds ACH - GPRMC (Ft. Sill)

31. Service Monitoring

32. Monitoring Performance to Plan